A MAN at the centre of an international fraud investigation by police was previously at the helm of a collapsed North-East internet business, The Northern Echo can reveal.

Chris Douglas was one of four people bailed yesterday by police investigating the York-based property club, Challenor Property Developments.

Challenor, of Regency House, Westminster Business Park, York, sold buy-to-let properties in the UK and abroad.

It closed suddenly last year, leaving its clients owed about £2m in total.

Mr Douglas, of Naburn Lane, Fulford, York, who had enjoyed a luxury lifestyle while he was a partner in Challenor, later declared himself bankrupt.

The 44-year-old was previously a director and founder of eforyou.com, which operated from the Imperial Business Centre, Grange Road, in Darlington.

The firm designed websites for businesses and allegedly promised investors £25,000 a year from only two hours work a week selling its products.

The dotcom business was liquidated in May 2001 and later wound up by the Department of Trade and Industry (DTI).

Hundreds of angry creditors were left out of pocket after the company’s collapse, having invested about £3m in the business.

Mr Douglas is also a former director of Century Mortgages, based in Northallerton, North Yorkshire, which was also wound up after a DTI investigation.

Customers of the mortgage company complained that they were misled over the products they had bought, while agents who signed up to sell the products said they were misled over how much they could earn.

Despite various investigations into his business activities, Mr Douglas has never been charged with a criminal offence.

Mr Douglas was arrested on Monday after police investigating Challenor Property carried out a series of dawn raids in York.

Officers arrested four people on suspicion of conspiracy to defraud and money laundering.

They included his wife, Karen, 51, and Richard Hodgson, 62, of Old Earswick, York.

Mr Hodgson was formerly the chairman of Century Mortgages.

Last night, Detective Sergeant Garry Ridler, of North Yorkshire Police, said he anticipated that further arrests would be made in the Challenor inquiry.

DS Ridler said police had already recovered a “vast quantity”

of property with inquiries being conducted as far away as Spain and the US.

He said: “This is a complex and in-depth fraud investigation that involves a number of individuals.

“We are appealing for staff who have worked for Challenor Property Developments to come forward and help us wirth our inquiry.”

■ Officers can be reached on 01904-669582, by email at chal lenorpropdevelopments@nor thyorkshire.pnn.police.uk or by writing to Police Station, Fulford Road, York, YO10 4BY.