A couple who ran a bogus college in Scotland uncovered in an investigation by The Herald have been arrested in connection with fraud allegations.

The action was taken against David Morrison, 30, and his girlfriend Jin Wang, 32, after a joint inquiry by Strathclyde Police and trading standards officers. The investigation was launched after claims that the Kelvin Business School had taken tens of thousands of pounds from overseas students for courses that did not exist.

Police were contacted by young people from as far afield as Colombia, Mexico, Venezuela, Iran, and Iraq, who arrived in Glasgow to attend English language courses having paid up to £6000 each after signing up online.

However, when they went to the school's business address at the Templeton Business Centre in the east end of the city they found a locked and empty office.

In a later e-mail to students, Mr Morrison said the reason they could not get access was because two keyholders had unexpectedly resigned while he was overseas.

Magali Angeles Camacho, from Mexico, one of the students who lost money, said: "I hope that soon I and my fellow students can recover our money which some of us had to obtain from our families who have sacrificed many things to help make our dreams of a professional career in the UK come true."

According to Companies House records, Mr Morrison is sole director of Kelvin Business School and the company secretary is listed as Miss Wang. Their most recent home address is given as a flat in the west end of Glasgow.

The school website, which has now been taken offline, stated it was "a leading teaching and research institution" offering MBA, MSc, HND and HNC qualifications. However, there was no evidence such qualifications had been taught at the school, whose motto was "Make it Real, Make it KBS".

The arrests will fuel concerns that Kelvin Business School was allowed to continue to recruit overseas students despite questions raised about its integrity two years ago.

The Association of Scotland's Colleges (ASC) warned senior Scottish Executive officials about the college during a review of the sector in 2005, but no action was taken.

Last night, Howard McKenzie, acting chief executive of the ASC, said: "It is incredibly important we protect the high standards of education offered by Scotland's colleges and we therefore support action taken by the authorities against any college that doesn't offer a legitimate learning experience."

The experience of students from the Kelvin Business School prompted a wider investigation by The Herald into the burgeoning private college market in Scotland.

The investigation revealed a network of private colleges across the UK with questionable credentials charging overseas students thousands of pounds to study courses which appeared not to exist.

Many used logos of recognised educational and industry bodies or claimed partnerships with legitimate universities without permission.

The fear is that some of these colleges are little more than visa shops which provide an easy route into the country or a means of staying here.

There are concerns unregulated private colleges allows unscrupulous organisations to charge thousands of pounds for courses which are not externally accredited and have no real value to employees.

A spokeswoman for Strathclyde Police said: "A man aged 30 and a woman aged 32 are the subject of a report to the procurator-fiscal."