A BIODIESEL company based in the North-East has been drawn into an investigation by the Serious Fraud Office.

Officials fear shares in Worldwide Bio Refineries, based in Newton Aycliffe, County Durham, may have been sold to unwary investors as part of a so-called "boiler room scam."

A boiler room scam is another name for bogus share dealers who dupe investors into buying stock at hugely inflated prices.

Deals involving the shares of Worldwide Bio Refineries are being examined by officials from the Serious Fraud Office (SFO) as part of an investigation called Operation Affair.

Investors contacted the SFO after buying shares in Worldwide Bio Refineries (WBR) from a broker called Anderson Consultants.

It was offering shares in the North-East company for 50p each and with interest in alternative bio fuels soaring, they looked to be a good bet.

But The Northern Echo understands that Anderson Consultants was a front for a boiler room scam operating out of Barcelona, in Spain. This meant its salesmen were beyond the reach of Britain's stringent financial regulatory framework.

The SFO is understood to have sent investigators to Spain as part of the inquiry.

Shares in WBO were also offered by a bogus broker called Allied Advisory, which had salesmen based in The Hague, Netherlands, and was not regulated by the FSA.

Last night, an SFO spokesman said: "We are investigating a suspected boiler room fraud and in the course of this investigation have searched premises at addresses in the UK and also in Iceland and Spain with the co-operation of the police in those countries. No persons have been charged at this stage."

Ian Stevens invested £10,000 in WBR via Allied Advisory in January last year.

When he became worried he tried to contact WBR's company director Ray Johnson at the firm's headquarters in Grindon Way, on the Heighington Lane Business Park, Newton Aycliffe.

He said Mr Johnson always sounded "positive" about WBR's future and even talked of a stock market floatation.

But Mr Stevens now believes he will never see his £10,000 again.

Last night he admitted: "I have written my money off."

WBR was set up in 2003, but according to Companies House, accounts due in February have yet to be produced. The firm has also removed its website from the internet.

The green fuels firm had ambitious plans. It pledged to grow turnover to a nine-figure sum and open five biodiesel plants by the end of this year.

The Northern Echo has repeatedly tried but failed to talk to Mr Johnson. Yesterday, two calls were put in to the company. Initially, the receptionist said said Mr Johnson was in hospital.

Later she said he was in business meetings and could not be disturbed.

However, a company spokeswoman was quoted recently as saying she was not aware of any investigation by the Serious Fraud Office.

Mr Johnson is also a director of Alternative Diesel Investment, which, like WBR, has its registered office in Grindon Way, and has also been the target of boiler room scammers,