DETECTIVES are investigating a suspected £2.8million fraud involving a Wearside company, the Echo can reveal.
Northumbria Police are probing 51 different claims of irregular financial dealings involving Washington Mortgage Centre, formerly based in the Galleries shopping centre.
Earlier this year, we told how police had launched an investigation into the centre after a number of customers reported they were unable to access money invested through the centre.
The probe is understood to have grown considerably over the past few months and is believed to involve millions of pounds.
Businessman David Reid, 49, who is also a member of the Durham North West Labour Party, has been arrested by investigating officers. He has been suspended by the Labour Party.
Officers have also searched Mr Reid’s home in Burnhope, County Durham.
Investors who claim they are victims of the suspected fraud have contacted the Echo, claiming they have lost hundreds of thousands of pounds through the company.
A number of these investors say they are now supporting each other as the case progresses and working to get their money back.
One man, who asked not to be identified, told the Echo: “We lost money when we went to remortgage a property.
“We were told the money had been put into an off-shore account.
“Then all of a sudden, we could not get in touch with anyone at the company for love nor money,. That was when we called the police.”
Other suspected victims claim they lost inheritance money and cash they had put away for their children.
The complex financial investigation has been going ongoing since January, but officers are understood to be investigating alleged financial irregularities stretching back a number of years.
One investor said: “I think the complaints started last summer and slowly built up over the next few months. It was then the investigations began.”
Mr Reid is due to answer bail next month.