An accountant has been arrested on suspicion of fraud following a sting by an undercover reporter from a daily newspaper.

Jon Austin, investigations reporter for the Basildon-based Echo, posed as a potential client after being contacted by a woman claiming she had invested £300,000 with the 75-year-old accountant.

The man subsequently refused to return the money to her, saying mental problems meant he had no idea what he did with it, according to the woman.

But just weeks after allegedly telling the 66-year-old woman about these mental health problems, he agreed to give financial advice to Jon, posing as a single man who had inherited £100,000.

The semi-retired accountant even suggested to Jon he invest up to £30,000 through his limited company and take out a will through a separate business which was also still trading in the face of his alleged illness.

As a result of Jon’s investigations, the Echo reported that the accountant had previously lost up to 80 local investors a total of £2.5m in 1993, when a previous investment company collapsed, and that he had also blamed this on mental illness.

The woman had reported the accountant to police, who had not questioned him, before she approached the Echo.

Jon’s discoveries led to a two-day special investigation in the newspaper run over eight pages, with a separate web video made using footage of the accountant caught on secret camera.

Police arrested him at his Southend home around three weeks after the Echo ran the stories when paperwork was also seized.

He was bailed until 9 September pending further inquiries.