SEVEN men have been convicted of an £8m shares fraud which left thousands of victims out of pocket.

Investors were persuaded to buy cut-price shares in a Newton Aycliffe-based company Worldwide Bio Refineries (WBR), which was valued at up to £110m.

In reality, WBR was practically worthless and a front for a so-called “boiler room” scam that used high pressure sales techniques to persuade people to invest in a company they were told was about to float on the Stock Exchange.

Company director and founder Redmond “Ray” Johnson, 66, from Washington, Wearside, and chief executive Dennis Potter, 72, who lived in Singapore, were arrested by Durham Police in July 2009 following an investigation by the Serious Fraud Office (SFO), called Operation Affair, which has convicted a number of other individuals.

Johnson pleaded guilty at Ipswich Crown Court to conspiring to defraud investors and also offered to give evidence for the prosecution.

Potter had denied the same charge, but yesterday was found guilty by a jury following a trial which lasted more than three months. Both men now face jail.

John Murphy, 35, and Greg Pearson, 38, both of Marbella, Spain, Daniel Murphy, 37, and Lee Homan, 37, both of Hertfordshire, and Peter Bibby, 44, of south London, who all managed share sales, were also convicted of the conspiracy.

All of those involved will be sentenced on September 23.

WBR, which had offices on Heighington Lane Business Park, was set up in 2003, and was said to be investing in up to five bio-diesel plants – the process by which vegetable oil is turned to diesel fuel.

But its UK operation produced no output and only limited imports came from a sister plant in Singapore.

The share-selling was undertaken by salesmen working from Marbella and Barcelona, although many of them used false names and claimed to be calling from offices in Frankfurt, Stockholm or Amsterdam.

The SFO said the business prospects of the company were inflated by WBR’s directors and salesmen.

WBR eventually went into adminstration in 2007 following a petition by creditors. It is now officially in liquidation.

Of the £8.2m attracted from investors, about £4m ended up in off-shore accounts in Cyprus, Jersey and Spain, the SFO said. It began its investigation after complaints from people who bought shares.

WBR was later included on a warning list published by the Financial Services Authority.

SFO director Richard Alderman said: “Boiler room fraudsters prey on vulnerable people, they also deprive genuine businesses of the capital they need to grow. Quite bluntly, they ruin lives. I am delighted that the SFO is playing its part in bringing down operations like these and bringing fraudsters to book.”

• Did you lose money on WBR? Contact The Northern Echo on 01325-505074.