Interpol is hunting a former Auckland man and his British wife suspected of masterminding a European property scam alleged to involve almost $2 million.

The Scotsman newspaper in Edinburgh reported that 20 people claimed to have paid substantial sums to Nigel Andrews for deposits for apartments in Turkey, which have not yet been built.

Mr Andrews, a 51-year-old New Zealander, and his wife Margaret were reported to have vanished from their offices in Marbella in June, where they had set up a company called Royal Resorts Turkey.

The Spanish police have been called in to investigate allegations that investors have lost 1 million euros ($1.7m) in a failed resort development in Turkey.

Spain's national police force has confirmed that Interpol was involved in the hunt for the couple and that they have made an arrest in Calpe, Alicante - reported to be Mr Andrews' brother, Lionel.

The brothers left Scotland for Spain in 2003 after the Vaults nightclub in Aberdeen's Carnegie Brae, which they had set up with another business partner, closed down just five months after opening, owing about £700,000 ($1.43m) to creditors.

The Bank of Scotland later lodged a petition calling for the brothers to be made bankrupt.

Mr and Mrs Andrews left Marbella on June 5, after it emerged their apartments project would not go ahead because of a building ban, the Scotsman reported.

An English-language news website in Spain, The Olive Press, reported that police in Alicante and Marbella confirmed they had arrested a New Zealand national, Lionel Andrews, in connection to the Royal Resorts Turkey sales.

It reported that Nigel Andrews and his wife had recently been living at an exclusive marina in Almeria and that Mr Andrews had recently renamed Royal Resorts Turkey as Property Investing Overseas.