A SEX parlour owner has been ordered to hand over almost £400,000 in earnings from brothels he operated in County Durham and North Yorkshire.

John Middleton, whose girls entertained up to 40 soldiers a night, claimed he only made £30,000 from his prostitution racket, which operated from the Pleasure Zone sex shop, in Darlington, and a caravan off the A1, near Bedale.

At a confiscation hearing at Teesside Crown Court yesterday, Judge Tony Briggs said the brothel boss's account of his earnings was grossly underestimated and he valued it at more at £237,832.

The court heard that Middleton was caught when undercover police officers visited his shop in Darlington and found a brothel being run upstairs.

The 61-year-old was jailed in April for a year for living off the earnings of prostitution, but the sentence was reduced on appeal to nine months.

As well as the sex shop and caravan, Middleton allowed prostitutes to go to hotels or clients' homes, and some girls operated from a house in Redmire Close, Darlington, and a home in Newark, Nottingham.

Judge Briggs said it was impossible to calculate exactly how much the brothel boss, who previously ran a double-glazing firm, had made from prostitution.

He said: "It is entirely impossible to make a precise estimate. It is clear that it was a pretty well-organised and busy activity."

The court heard Middleton was investigated by the Inland Revenue's special investigation branch for tax evasion from 1981 to the mid-90s, which resulted in him having to pay £36,000 in income tax.

He also committed mortgage fraud by taking out a mortgage for a house in Nottingham in the false name of Brookes.

The married father claimed he had set up the sex shop as a legitimate business and he only fell into prostitution by chance - but this was rejected by the court.

Judge Briggs said: "The claim that it was a massage parlour that drifted into prostitution is laughable. It is nonsense."

Mr Middleton has a number of properties, including the £340,000 home he shares with his wife at Barrenthwaite Hall, Cumbria. He also owns the Bedale Hunt pub, in Bedale, timeshares in Spain, Florida and Portugal, and homes in Darlington and Grantham.

Most had not been bought with illicit earnings, the court concluded.

Judge Briggs told Middleton he had to pay £346,638, plus £24,820 prosecution costs and, if he failed to comply, he could be jailed for three years.

After the case, his wife, Lesley, said: "What was said about the brothel is rubbish. It did start out as a legitimate business.

"What John said was completely true. The earnings were £30,000, the rest was legitimate."