Lib Dems' biggest donor a wanted man after stealing millions » Central Government » 24dash.com

The Liberal Democrats' biggest donor became one of Britain's most wanted men today after being convicted of stealing millions from a former football boss.

Michael Brown, 42, who was tried in his absence after skipping bail, posed as an international bond dealer, pretended his father was a Lord, claimed connections with royalty, and promised investors staggering returns of up to 50%.

His numerous lies, including claims he had clients "vetted" by US embassy officials and Special Branch before accepting their money, helped him pocket nearly £8 million from ex-Manchester United chairman Martin Edwards.

The former football chief, one of an international array of victims who lost fortunes, little realised he was entrusting his money to someone who had not even passed his maths O-level.

Altogether he and the others gave the Glasgow-born businessman 57.7 million US dollars (£36 million), of which a record £2.4 million was donated to the Lib Dems' 2005 General Election war chest.

While the Electoral Commission decided it was "reasonable" for the party to regard his seeming generosity as "permissible", Brown's conviction for theft and other offences will almost certainly heap further embarrassment on them.

There may even be renewed calls to give it all back.

An American lawyer has already launched a High Court bid for the return of hundreds of thousands of pounds he claims the crook handed to the Lib Dems.

London's Southwark Crown Court heard the picture of political largesse presented to party grandees was simply part of a carefully crafted "illusion of wealth and influence" designed to give him the social acceptability he craved.

Following the donation he flew in a private plane with then leader Charles Kennedy and dined with other senior Lib Dem figures.

The crooked businessman - who will not be sentenced until he is caught - channelled the gift through a company called 5th Avenue Partners.

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He used the millions left over to fund an "extravagant lifestyle," pay business expenses and keep other investors happy with "pretend" returns.

Martin Edmunds, QC, prosecuting, told the court Brown first rented a £49,000-a-year Mayfair apartment where he "conducted negotiations" with Mr Edwards.

His breathtaking multi-million pound "spending spree" included an impressive office in the same area, and a garage of upmarket cars, including a Range Rover with the number plate 5 AVE, a Bentley and a Porsche.

Brown, who was last known to live in Templewood Avenue, Hampstead, north-west London, also splashed out £2.5 million on a private jet, £400,000 on an ocean-going yacht and £327,000 on an entertainment system for his home in Majorca.

Another £100,000 disappeared on improving the library at the Caledonian, the exclusive Belgravia club he had joined.

"Then there are the holidays, luxury travel and the like. What you will see is money going out on a grand scale, providing the costs of the business, accommodation and staff, providing a luxury lifestyle, and all of it funded by investors' money," said the barrister.

He "simply used their money as his own".

"After all he had a front to maintain. It is the old story, if you tell a big enough lie, people swallow it."

His "front" knew no limits. During a confrontation with a suspicious bank official he trotted out his "I'm a successful bond trader" mantra, claimed he met the Duke of York at Buckingham Palace and spoke of connections with the US embassy.

Then, when his "lies" finally began unravelling, he resorted to "entirely inappropriate and criminal pressure" to persuade investors "not to pursue complaints to police".

After his arrest he continued to protest his innocence.

His barrister, Julian Bevan, QC, also argued his client had done nothing wrong.

But the three man, nine woman jury - not allowed to hear about the defendant's previous convictions for dishonesty - decided Brown was lying.

They took nine and a half hours over three days to unanimously convict him on four counts - two thefts, one of furnishing false information and one of perverting the course of justice between February 9, 2005 and April 17, 2006.

Liberal Democrat leader Nick Clegg told BBC News 24: "We took that money in good faith, everyone recognises.

"It has been recognised that we did all the due diligence checks we could have done, totally unaware of the crimes of which Michael Brown has now been indicted.

"Beyond that, I can't comment."

A spokesman for the Lib Dems said the party would be making no comment on Mr Brown's conviction.

Brown was formally acquitted on the directions of Judge James Wadsworth QC of a further count of theft and another "transferring" allegation.

In addition, a charge of obtaining a money transfer by deception, which the jury could not reach a verdict on, was ordered to "lay on the file" along with two alternative counts of transferring criminal property.

The judge added that he would not sentence the defendant, who skipped bail in July, until he has been arrested.

He then invited Mr Edmunds to tell the jury about Brown's previous convictions and how he had twice skipped bail.

The barrister said the defendant was first arrested three years ago over allegations of perjury and making a false passport declaration following concerns by HSBC over the management of clients' cash.

The perjury involved pretending entitlement to millions of pounds in assets frozen by the bank, while the passport offence concerned replacing the one he had been ordered to hand over to police.

Shortly afterwards, he fled to his "luxury hilltop villa in Majorca with the luxury hi-fi equipment".

But he was found, extradited, and after admitting both charges was jailed for two years.

The barrister told jurors that following his release he was allowed bail in connection with the matters they had tried. He said "very strict conditions" were imposed, including a £250,000 surety from one of Brown's friends.

"But in July it was discovered the bird had flown and all the information we have managed to gain since then has been to the effect he is somewhere abroad. We are unable to identify where, but, of course, inquiries continue to recover him."

According to one recent newspaper report, Brown might have fled to the Caribbean after apparently replacing his goatee with a full beard, and changing his name to Campbell-Brown.

Asked if he had anything to contribute, defence counsel Mr Bevan revealed, to laughter: "The only comment that I have that might interest the jury is that I have never met Mr Brown, and that is the truth."

After the case a Lib Dem spokesman said: "The Electoral Commission has previously confirmed that it was reasonable for the party to regard the donations from 5th Avenue Partners as permissible on the basis of the available evidence.

"All our donations from 5th Avenue Partners were received in good faith and were properly spent on the general election campaign. Our auditors have seen our legal advice on this matter and confirmed that we do not need to make provision in relation to this matter."

Detective Sergeant Nigel Howard, case officer for the City of London Police investigation, said: "Brown tricked investors into handing over millions of pounds and has been trying to escape justice ever since.

"It is time he faced up to his crimes and handed himself in to the authorities.

"I would ask the public for information on his whereabouts and that they be aware he may have changed his appearance, for example his hairstyle."

The officer added: "If anyone can help, please call the City of London Police on 020-7601 2222, or ring Crimestoppers anonymously on 0800 555 111."

The latest case heard that the crook carefully sculpted a reputation of "experience and expertise", insisting he had a 10-year pedigree "trading in high-value bonds on the international markets".

It first attracted a 10 million dollar (£6.25 million) investment from two US lawyers representing a group of Californian clients calling themselves Univest.

Mr Edwards' 12.7 million dollars (£7.94 million) followed, along with 30 million dollars (£18.75 million) from Hong Kong-based business figures Kevin So and Lucy Lu.

Another investor, Los Angeles lawyer Robert Mann, handed over 5 million dollars (£3.125 million). He is now suing the Lib Dems for the return of £632,000 Brown gave to the party. The rest of his money was siphoned off for Brown's plane.

The bogus trader promised all his clients exceptionally healthy returns on their cash.

But not a single investment was made and, apart from Univest, which was repaid with other investors' money, no-one got their money back.

"Mr Brown never had any intention of trading in bonds," said Mr Edmunds.

"His representations to Mr Edwards were all just lies to get hold of his money."

Instead of being invested, it was used to help "create the illusion he was trading" and then provide the trappings of success.

The former football boss said Brown insisted he "only dealt in triple A- rated bonds which had practically no risk at all".

"I think I came away with the impression of 36% to 50% profits a year, which was quite high.

"He also said his father was a lord and referred to certain political connections as well."

When his edifice of deceit began to "unravel", Brown used a sheaf of false documents in a bid to avert suspicions.

An investors' representative was warned that, if they complained to police, "the drawbridge to any compensation would be well and truly shut forever".

Investigators quickly unravelled his modus operandi - ostentatious displays of wealth, a carefully nurtured but bogus investment reputation, and the squandering of tens of millions of pounds.

The Electoral Commission, the donations watchdog, later began an inquiry into Brown's £2.4 million Lib Dem donation.

It ruled that, "based on the information available to them at the time", the party had "reasonably" regarded the sum as "permissible" and "acted in good faith".

But it then warned: "Nevertheless, we have always said that, if any additional information that has a bearing on the permissibility of the donations comes to light, for example as a result of the ongoing police investigation or legal proceedings relating to the affairs of 5th Avenue, we would consider the matter further."

The Electoral Commission later said it was resuming its probe into Brown's donations to the Liberal Democrats.

"We are now able to resume our investigation which had been suspended at the request of the prosecuting authorities," a spokesman said.

"Our investigation concerns the permissibility of donations accepted by the Liberal Democrats in 2005.

"We have asked the Police and Crown Prosecution Service for access to relevant evidence from the trial to inform our investigation."