When businessman Terry Collins was offered the chance to buy the Ritz Hotel for a knockdown price of £250million it was an opportunity that sounded too good to be true.

 

 

 

And it was indeed too good to be true. The hotel, with an estimated market value of around £600million, was not on the market.

 

 

Yet two conmen managed to persuade Mr Collins, co-founder of a large and reputable property company, that the hotel's owners, the Barclay brothers, were prepared to sell it at a bargain price.

 

 

 

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Anthony Lee and Patrick Dolan convinced an intermediary that they represented the Barclays and even had a team of lawyers on board to give the plan respectability.

 

Negotiations went on for months and eventually Mr Collins, of London Allied Holdings, borrowed £1million from Dutch businessman and financier Marcel Boekhoorn to pay Lee a deposit in December 2006 for the release of 27 boxes of purchase documentation held by his solicitors.

 

But the papers did not exist and the Barclays were oblivious of the ruse.

Lee turned out to be an unemployed lorry driver and bankrupt with no connections whatsoever to the brothers.

Dolan, too, was unemployed.

 

The elaborate fraud emerged yesterday in a judgment handed down at the High Court in London as the two victims of the fraud battled over the £ 1million which was immediately spent by Lee and Dolan.

 

 

Lee, 47, bought a £55,000 Land Rover as a Christmas present for his girlfriend Jennifer Hodgson, then took her on a luxury cruise.

 

He sent £59,000 to his creditors and paid rent arrears on his Yorkshire bungalow.

 

 

Dolan, 66, bought a Mercedes for £43,000 and splashed out on a lavish day at Cheltenham races, where he bet and lost heavily.

 

He paid off the £30,000 mortgage on his house in Barnet, North London, and paid £293,410 to his wife.

 

 

In yesterday's judgment, Mr Justice Henderson said: "The Barclay brothers were known by Mr Collins to have the reputation of being extremely secretive in the conduct of their business affairs, and it did not strike him as implausible that they would wish to structure a transaction of this sort through an intermediary such as Mr Lee."

 

For five months Mr Collins was engaged in extensive and detailed negotiations with Lee and his solicitor.

To clinch the deal Lee convinced Mr Collins that another buyer was on the scene.

 

It was at that point that Mr Collins contacted Mr Boekhoorn, of a firm called Apvodedo, and outlined the opportunity. An agreement was reached.

 

The judge continued: "Readers of this judgment will perhaps have guessed by now that Mr Collins and London Allied Holdings (and indirectly Apvodedo and Mr Boekhoorn) were the victims of an elaborate fraud.

 

"Mr Lee and Mr Dolan were not currently involved in the property business, nor were they authorised in any way to act as intermediaries on behalf of the Barclay brothers.

 

"Mr Lee was an unemployed HGV driver and was an undischarged bankrupt throughout his dealings with LAH.

 

"Mr Dolan was a former contracts manager for a construction company-who had also been unemployed since 2000."

 

Mr Collins sued the pair as soon as he realised he would not receive the documents or a refund, and a High Court judge agreed an order allowing the tracing of funds.

 

 

Originally, Apvodedo helped LAH in its efforts to recover the money, but in October 2007 issued a claim for £1million against Mr Collins and LAH.

 

 

Mr Collins says he is not liable for the money because both he and Mr Boekhoorn believed the deal was genuine.

Mr Justice Henderson dismissed Mr Boekhoorn's application for an immediate ruling over the money and said the case needed to go to full trial.

 

North Yorkshire Police said an inquiry was continuing, although no arrests have been made.

 

Mr Collins said it was the legal element of the deal that had been so convincing.

 

"If the lawyers hadn't been there we would have laughed in their faces," he said.

 

"We are still very angry."