A MAN who funded a lavish lifestyle after posing as a trader on the stock markets is facing jail for a £1m-plus fraud.

Malcolm Varrick duped scores of people nationwide into handing over big sums of money after telling them they could get generous returns on their investments.

But instead of investing the money on financial products, large amounts of it were spent on expensive gifts such as high performance sports cars and foreign trips.

Varrick, 28, of Front Street, Sacriston, County Durham, was caught out after one investor tried and failed to get his money back, then alerted the watchdog, the Financial Services Authority.

It placed a freezing order on Varrick's assets and referred the investigation in 2001 to the Serious Fraud Office because of the scale of the deception.

It then set up a joint inquiry with County Durham police, who arrested Varrick in the summer of last year.

Varrick, who traded under various names, including Oak House Trading Company Limited and Charterhouse Trading Company Limited, appeared at Teesside Crown Court yesterday where he pleaded guilty to ten charges of obtaining money by deception and ten counts of false accounting.

The value of the deception is estimated at £1.07m. The minimum amounts that were handed over to him were £5,000.

Detective Inspector Colin Gibson, head of County Durham Police's economic crime unit, said: "Mainly through word of mouth, he was able to convince a number of people throughout the country that if they were to deposit sums of money with him he could give them a very generous rate of interest."

Det Insp Gibson said inquiries were on-going to recover outstanding funds from Varrick's venture.

The case against Varrick was adjourned by for reports. He will be sentenced next month at Newcastle Crown Court.