Absent Liberal democrat donor convicted of fraud

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 per cent.

His numerous lies, including claims he had clients "vetted" by US embassy officials and Special Branch before accepting their money, helped him pocket nearly £8m 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 (£36m), of which a record £2.4m 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.



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

Counsel 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 £2.5m 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."



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 (£6.25m) investment from two US lawyers representing a group of Californian clients calling themselves Univest.

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

Another investor, Los Angeles lawyer Robert Mann, handed over 5 million dollars (£3.125m). 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 per cent to 50 per cent 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 £2.4m 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."

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



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."

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA celebration of British elections
News
i100
Arts and Entertainment
Billie Piper as Brona in Penny Dreadful
tvReview: It’s business as usual in Victorian London. Let’s hope that changes as we get further into the new series spoiler alert
Life and Style
A nurse tends to a recovering patient on a general ward at The Queen Elizabeth Hospital in Birmingham
health
News
science
Arts and Entertainment
No Offence
tvReview: No Offence has characters who are larger than life and yet somehow completely true to life at the same time spoiler alert
News
Chuck Norris pictured in 1996
people
Arts and Entertainment
Sarah Lucas, I SCREAM DADDIO, Installation View, British Pavilion 2015
artWhy Sarah Lucas is the perfect choice to represent British art at the Venice Biennale
News
A voter placing a ballot paper in the box at a polling station
i100
News
people
Arts and Entertainment
The Queen (Kristin Scott Thomas) in The Audience
theatreReview: Stephen Daldry's direction is crisp in perfectly-timed revival
Sport
football
  • Get to the point
2015 General Election
May2015

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

SThree: Trainee Recruitment Consultant - Dublin

£13676.46 - £16411.61 per annum + OTE: SThree: SThree Trainee Recruitment Cons...

Ashdown Group: Marketing or Business Graduate Opportunity - Norwich - £22,000

£18000 - £22000 per annum + training: Ashdown Group: Business and Marketing Gr...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + Commission: SThree: Are you great at building rela...

Ashdown Group: Database Analyst - Birmingham - £22,000 plus benefits

£20000 - £22000 per annum + excellent benefits: Ashdown Group: Application Sup...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power