Bulgarian Dreams, a London-based estate agency that folded last year, is being investigated by the City of London Police Economic Crime Department, the Sunday Times reported.

"We have received a number of complaints about Bulgarian Dreams and have begun an investigation," a spokeswoman said. She confirmed that the company closed its Moorgate offices at the end of 2008, but could not comment further.

Founded and owned by Robert Jenkin, a Cambridge graduate, and his Bulgarian wife, Mariya Georgieva, the company sold flats and houses at more than 40 developments in Sofia, the capital, in ski resorts such as Bansko and Pamporovo, and on the Black Sea coast.

A message on the Bulgarian Dreams website says that the company has ceased trading "following the extraordinarily difficult economic conditions" and suggests those who bought property through it should contact the Bulgarian developers directly.

One of the three companies it names is Interlink BG, of which Georgieva was a "manager". Jenkin insists, however, that the position did not give his wife similar powers to those of the director of a British company, and says she took it merely so she could "have better access to information regarding the developments".

Indy Gill, 45, an accountant from Nottingham, and his wife, Kim, 44, who runs a nursery, are among those ruing the day they invested in Bulgaria, the article in the Sunday Times says. In 2005 he paid Bulgarian Dreams a £15,930 deposit on a £55,000 penthouse flat in the first phase of the Windows to Paradise complex in Balchik, on the Bulgarian Black Sea coast, which was due to be completed in December 2006.

Early in 2007, having heard nothing, Gill says he contacted Bulgarian Dreams and was told that, due to planning problems, the top floor of the building, with the penthouse, would not be built - and he would instead be given a flat in the development's third phase, due to be completed a year or so later.

Then, this year, he received a letter from Bulgarian Dreams informing him that it was no longer acting as agent for the development - and told him to deal directly with Interlink BG instead.

Despite sending the Bulgarian-based company repeated e-mails, Gill has heard nothing, and says he fears work has not even started on the third phase in which his flat is meant to be. "We've got absolutely nothing to show for our money," says Gill. "I've resigned myself to losing my £16,000, but my wife still wants to do something, so we are trying, though a Bulgarian lawyer, to recover our money."

In a statement to The Sunday Times, Jenkin insists his company is working with Bulgarian developers to resolve problems with projects in the country with which it has been involved. "If any delays or issues exist with a development, they are due to the current economic conditions affecting all of the property industry," he says.

Most of the investors who have lost out in schemes in Bulgaria, Estonia or elsewhere put their money into projects that seemed completely above board and were, in some cases, recommended by independent financial advisers. In retrospect, however, some buyers appear to have been simply too trusting - especially when developments were being sold by British-based agents.

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