A BUSINESSMAN who masterminded a £300 million mortgage scam branded one of the biggest in the UK has been jailed for five-and-a-half years.

David Purdie, 57, appeared to be a successful family man, with a £1.5 million house on an exclusive address where Premier League footballers live, a box at Newcastle Falcons rugby club and expensive artworks bought on trips to New York.

But in reality he was leading a long-running fraud which caused losses of more than £111 million to three lenders, as well as ruining people he tricked into getting involved and making others homeless when the scam collapsed.

It led to a seven-year investigation by a small team of Northumbria Police detectives, who examined 2,000 mortgage applications, taking 700 statements, 170 suspect interviews and compiling 100,000 pages of evidence.

The scam involved getting bogus, inflated valuations for properties upon which mortgages were taken. Purdie was helped by crooked professionals within the industry.

The fraudster, who kept his name off official paperwork, sourced homes from people who were struggling to pay their mortgage, and would take on their property, allowing them to remain as tenants. He would also buy new-builds.

Though many thought his North East Property Buyers (NEPB) firm then owned the homes, in fact, they belonged to "nominees" who took out mortgages for him, including staff, their relatives and contacts.

When the scam collapsed, along with the financial crisis, tenants found their agreements were worthless and nominees were shocked to find they were responsible for the mortgage repayments, not NEPB.

Also involved was Newcastle Home Loans (NHL), a mortgage packaging company, which had a business relationship with some of the big lenders.

Teesside Crown Court heard how the financial ruin caused by Purdie and his conspirators led to marriage breakdowns, depression and suicidal thoughts.

Jane Bewsey QC, prosecuting, said: "The scale of this fraud was truly massive."

The lenders involved included Southern Pacific Mortgage Lenders, the Chelsea Building Society and Mortgage Express, a subsidiary of the Bradford and Bingley.

The prosecution did not allege that all the mortgages obtained by the firms were dishonest, "but a very substantial number of them were".

Purdie lived with wife Grace in a mansion in Runnymede Road, Darras Hall, Northumberland, and rubbed shoulders at charity functions with the North East's great and good.

He went on buying trips to New York, and investigators have recovered a chess set worth £20,000, two bronze figures worth more than £30,000 and a bas relief artwork of a semi-naked man and a woman worth 25,000 US dollars (£16,000).

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The £20,000 chess set

Ms Bewsey described Purdie's lifestyle as "lavish", with a 20-seat box for the Falcons and said he entertained "extensively and expensively".

Grace was a director of NEPB, along with former professional cricketer Michael Foster, who was described as Purdie's right-hand man.

The 43-year-old who played for Durham, Northamptonshire and Yorkshire and lived in The Meadows, Bournmoor, County Durham, was said to be involved "at the very highest level".

He was jailed for three years and nine months.

Linda Patterson, 57, of Maywood Close, Newcastle, was an underwriter who became a director of NHL and was sentenced to three years two months.

They all admitted conspiracy to defraud.

Chartered surveyor Steven Keay, 54, from Hopton Drive, Sunderland, was jailed for 23 months after he admitted furnishing false information.

NHL company secretary Peter Wardle, 68, of Witton le Wear, Bishop Aukland awaits sentencing for furnishing false information.

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Peter Wardle

Judge Howard Crowson accepted that the £111 million losses were not matched by the gains to the defendants - in effect that cash mostly disappeared.

He said: "Each of you made a good living, and you, David Purdie, achieved the extravagant lifestyle described in the prosecution opening."

He said it was not the fault of the small team of "diligent" detectives that the case, which opened in 2009, took so long to get to court. But the defendants received shorter sentences due to the delay.

Outside court, Detective Sergeant Jacqui Croskery, pictured below, who has led the investigation for the last two years, said she hoped the case served as a warning to others.

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She said: "These people have lived a lavish lifestyle on the money they have acquired from defrauding others.

"They have little left to show of their illegitimate gains, which were used to fund a lifestyle beyond their means.

"The success of these businesses relied upon the acceptance of hundreds of fraudulent mortgage applications to banks and building societies which ultimately resulted in actual losses to those institutions of in excess of £110 million.

"The fraud also caused misery and distress to many other people caught up in it.

"In real terms, people have lost their homes, marriages have broken up, and more than one has had suicidal thoughts.

"This has been a difficult and complex investigation which involved around 2,000 individual mortgage applications.

"We have taken over 700 statements and conducted 170 suspect interviews. There was over 100,000 pages of evidence.

"I am proud of the team for what we have achieved.

"We hope this serves as a warning to others who think we aren't watching.

"We are. These people have nothing left, not even their freedom, proving that crime simply does not pay."

Northumbria Police will now use Proceeds of Crime legislation to recover whatever assets they have left.