A conman who operated a worldwide loans fraud from his North-East home has been ordered to pay more than £1.5m compensation - or face a further eight years in jail.

Loanshark George Steen is already serving a six-year prison sentence for masterminding the fraud, in which he netted £2.8m - money he used to fund a luxury lifestyle in the Philippines.

The 56-year-old, who lived in a three-bedroom semi in Geneva Road, Darlington, and his agents, David Andrews, 40, and Dennis Alexander, 49, both of East Sussex, offered business people around the world bogus loans and charged thousands of pounds in administration costs.

Hundreds of applications were received for loans, ranging from £500,000 to £20m, for businesses including hospitals, hotels and golf courses. No one ever received a penny.

In 2003, Steen, who had also operated from an address in Victoria Road, Darlington, was jailed for six years, Andrews for five years and Alexander for two years.

Yesterday, after a three-day hearing at London's Southwick Crown Court, Steen was ordered to pay £1.17m in compensation within three months and an additional £526,000 within two years - or face an extra eight years in jail.

As Judge Andrew Goymer recorded the verdict, Steen - a former glamour photographer, acupuncturist and a professional singer, once appearing on the same bill as Frankie Vaughan - looked morose.

The court heard he made £2.8m from the fraud, and now had £1.7m in recoverable assets - including houses, offices, boats and cars around the world.

These will be sold to pay the compensation, to go to 61 victims in the US, Canada, Australia, New Zealand, Africa, France and Holland.

At the height of the fraud, Steen had stashes of cash at banks in Jersey, the Isle of Man, Hungary, Liechtenstein, Austria, the Philippines and Panama.

He also owned a house and office block in Darlington and two houses and a beach resort in the Philippines.

The investigation into the fraud involved Durham and Sussex Police and was co-ordinated by the Serious Fraud Office, in London.

A spokesman for Durham Police said: "The result of the latest court proceedings will hopefully provide some comfort to those who fell victim to this scam."

Steen fled to the Philippines during the trial, but was picked up by the islands' authorities and returned to London for sentencing.

Judge Goymer also sentenced the men in 2003. He called them "ruthless, cynical, greedy fraudsters" and said Steen was the main culprit who "did not express any regret".

The three men had advertised the loan service in the English language press overseas. Once their victims had been snared, they would fly to the UK to meet the gang in luxury hotels, where the deals were arranged.

Clients forked out thousands of pounds in administration fees to keep the gang happy, but were ultimately fleeced when told to pay a collateral bond - 40 per cent of the loan value.

When they complained that they did not have the cash, the crooks told them to read the small print and fled with the money.

In March, Alexander was ordered to repay £139,500 of his gains or go back to prison for two-and-a-half years. Andrews was ordered to repay £21,600, or face an additional 12-month jail term.

The trio had all denied one charge of conspiring to defraud between January 1 1996 and June 6 1999.

Another man, Colin Hardy, from Redcar, was also allegedly involved in the fraud but he died before trial.