A company director whose luxurious lifestyle was funded by an £80 million property fraud has been jailed for five years.

John Potts used investors’ savings to buy himself an art collection, jewellery, designer suits and even the classic Jaguar used by John Thaw in the television drama Inspector Morse, Newcastle Crown Court was told.

Potts, 60, from Sunderland, and fellow directors of his buy-to-let company, Practical Property Portfolio, stole from 1,750 investors, who were promised 15 per cent annual rental returns. Those willing to invest £25,000 were told that the flats and houses, often in run-down areas, would be refurbished, maintained and filled with tenants. Investors were fooled by glossy brochures, impressive show homes and slick sales pitches.

Many of the 4,000 properties bought by the company in the North East, Yorkshire and Lancashire were left derelict and unoccupied. Graffiti near a street of houses owned by the company read: “The Gazza strip”. Some investors lost their life savings, with one man, a chartered accountant, losing £500,000. Potts spent £125,000 on Savile Row suits and £53,000 on Morse’s red 1959 Mark II Jaguar.

Potts and his colleagues, Peter Gosling, 57, Eric Armstrong, 55, Peter Graham, 62, and Natalie Laverick, 28, were brought to justice by Northumbria Police’s biggest fraud investigation, which was conducted jointly with the Serious Fraud Office.

The five directors were accused of using investors’ money as their “personal piggy-bank”. They ensured the loyalty of the company’s 100 staff by paying large salaries and bonuses.

Nicholas Dean, QC, for the prosecution, said that Potts, who is estimated to have gained up to £8 million from the fraud, had boasted that he was “the richest man in the North East” and ruled the company by “a combination of bullying and generosity”.

Gosling was jailed for three years, and Graham and Armstrong for two years. Laverick, who had offered to give evidence against the others, was given a 21-month sentence, suspended for two years.

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