Investors from around the world say they will never put money into Liverpool again after their experience of dealing with a city “landlord from hell”.

They have been bombarding council chief executive Ged Fitzgerald with complaints about Nigel Russell, who runs a number of student properties around Liverpool.

City leaders sold the Grade II listed St Andrew’s Church in Rodney Street for £1 to one of Mr Russell’s companies in 2010.

Mr Russell had been jailed in the USA for passport fraud, tax evasion and illegal possession of firearms in the mid 2000s, and after a spell working in Dubai, returned to Liverpool to set up his property empire.

Investors say that if the council had carried out a test to see whether Mr Russell was a “fit and proper person” to hold licences to operate houses of multiple occupancy (HMOs), then they and fellow investors from as far away as Canada, Brunei, Saudi Arabia and the Philippines may not have had to endure what they called years of hell.

Their woes began when returns on their investments in individual student “pods” in buildings such as the Rodney Street church and several other properties dried up or failed to materialise.

They had to endure months without any payments, and some had put their life savings into buying units from Mr Russell.

One of his firms, Penlake, was struck off by the Liverpool Student Homes network after complaints from students about poor treatment, meaning the body would not recommend or refer anyone to move into any of his developments.

After that, it emerged St Andrews Church was being used effectively as a hotel for weekend football fans, and Mr Russell’s wife Tracey told anxious investors – to their horror – that there had been talks with the Probation Service about turning it into a hostel for prison leavers.

This was denied by the Probation Service.

One of Mr Russell’s firms – Middle England Developments – collapsed with debts of around £3m, putting up to 300 Merseyside firms owed money at risk of going to the wall.

But Mr Russell has been able to regain the leases on some of his properties through his new firm, JLK Ltd, via insolvency practitioners.

Now, city leaders look set to agree to transfer the main lease to St Andrews Church to JLK, leading investors to fear their investments could be put at further risk.

But the council says its hands are effectively tied.

Those who invested in one of the developments – Alexander Terrace in Hatton Garden – have had to see the units they own empty since April because the council put a prohibition notice on it because of serious problems with the water system.

But whenever Mr Russell has been challenged by the ECHO over complaints about the conduct of his firms, he has denied responsibility and blamed other management firms appointed by the investors who he said had “taken them for a ride”.

The investors, however, deny Mr Russell’s claims.

Mr Russell told the ECHO: “We spend a fortune in Liverpool and restored numerous historic buildings that would be still in a dilapidated state today and St Andrews had stood in that condition for over 20 years and no one wanted to touch it.

“All the investors got what they paid for and made great returns until the student market took a downturn in 2012 due to increased student fees and the restriction in visas being issued to foreign students.

“The amount of foreign students was reported in the national press to have fallen by 45%.”

Mr Russell said that since he started building with the “student pod concept” in Liverpool, thousands more pods have since been built “by everyone and his mother jumping on the bandwagon.”

A number of investors have now grouped together to launch a legal challenge to the council’s likely transfer of the leasehold of St Andrews to Mr Russell’s new firm, JLK, fearing Mr Russell regaining an influence over the property will be damaging to their chances of getting returns in the future.

One investor has contacted his home country’s High Commission calling on them to investigate and a high-profile Canadian businessman has been pressing the Canadian government to be wary of investing in the city.

A spokesman for the group told the ECHO: “The experience has served as a salutary lesson.

“Many of the overseas investors are now reluctant to consider any further investment in the UK in general and Liverpool in particular.

“They are busy sharing their experiences with other potential investors in their own countries to steer them away from any involvement with anything connected in any way to Liverpool.”

However, council chief executive Ged Fitzgerald has defended the council’s position, writing to investors that as long as outstanding works are completed at Rodney Street, “there are no reasonable legal grounds that would enable the council to resist the transfer”.

One investor, who asked not to be named, said: “The last couple of years have been a complete nightmare.

“Nigel Russell can only be described as the ‘landlord from hell’ who seems determined to cause misery for us and, more importantly, our student tenants – many of whom are living away from home for the first time.

“We have also had to deal with a council which seems determined to avoid taking any action against Mr Russell and his companies.

“There are over 400 people from all over the world who invested in Mr Russell’s Liverpool developments and I think it’s fair to say that very few of them would consider investing in Liverpool again.

“This is not about the city of Liverpool itself which is a fantastic place but, for many of us, it will always be associated with the antics of Mr Russell and the frustrations we have had in dealing with a council who refuse to stand up to Mr Russell and hold him accountable for his actions.”

Who is Nigel Russell?

Nigel Russell had worked in the USA in the early 1990s at the height of the Florida time share boom.

But while in America, he found himself in trouble with the law and ended up being jailed in a Federal prison – inmate number 99909-071 – for passport fraud and tax evasion and illegal possession of a firearm.

After being deported from the USA he worked in Dubai for a time at Middle East Developments, a firm controlled by Tarik Bin Laden, the wealthy half-brother of dead terror chief Osama Bin Laden.

Mr Russell returned to the UK in the late 2000s, and bought established student property firm Penlake from a Woolton-based husband and wife team.

He was sold St Andrews Church in Rodney Street by Liverpool council for just £1 on the promise of developing it out into student properties, and soon bought up several other buildings around the city, acquiring the former Hatton Garden headquarters of Merseytravel to turn into the Richmond Hotel, in which he boasts a painting of himself dressed up in the Royal regalia of King George V.

When he announced his purchase of St Andrews Church, the ECHO questioned him about his prison past.

He said: “I made a mistake when I tried to buy a passport – I have served my time in a federal prison for that.”