A businessman was duped into spending £1m to buy the Ritz hotel in London by an unemployed man with no connection to the five-star property, the High Court heard yesterday.

Terry Collins, co-founder of a large property company, was offered the chance to “buy” the Ritz from the hotel’s reclusive owners the Barclay brothers, for the discounted amount of £250m – well below the estimated value of £600m.

Anthony Lee, an unemployed lorry driver, and business partner Patrick Dolan had managed to convince an intermediary that they represented the Barclays and had also employed a team of lawyers.

Collins, of London Allied Holdings, borrowed £1m from Dutch businessman and financier Marcel Boekhoorn to pay Lee a deposit in December 2006.

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

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.

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

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

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By Gemma Sharkey

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