Lib Dems' biggest donor stole money

Party may have to return Michael Brown's millions after he is convicted of fraud

The Liberal Democrats may be forced to pay back a record donation of £2.4m after a jury decided the party's biggest donor was a con man.

Michael Brown, a flamboyant 42-year-old who has been missing since June, was convicted of stealing millions from a former football executive and is now one of Britain's most wanted men.

The Electoral Commission is to reopen its investigation into 5th Avenue Partners Ltd, the firm Brown founded. Anti-sleaze laws forbid the receipt of donations from companies who are not "carrying on business", so it is possible the party will be required to return the money, which could badly damage its budget to fight a general election. The Los Angeles-based lawyer Robert Mann, who gave Brown $5m (£3m), is now suing the Liberal Democrats for the return of £632,000 Brown gave to the party.

Nick Clegg, the party leader, said: "We took that money in good faith. 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 former Labour minister Denis MacShane said: "Michael Brown is the single biggest donor in the history of the Lib Dems and not only has he been found guilty of fraud but he has now been found guilty of theft. Surely the Lib Dems must now repay the money he donated to their campaign."

Brown, 42, tried in his absence after skipping bail, claimed he regularly visited Buckingham Palace for private meetings with Prince Andrew, pretended he was the son of a peer, posed as an international bond dealer, and promised investors returns of up to 50 per cent as reward for their faith in him.

A plethora of lies, including the assertion that he had his clients vetted by US embassy officials and Special Branch officers before accepting their money, led to him stealing $12.7m (£7.94m) from the former Manchester United chairman Martin Edwards.

Edwards was among an international array of victims who gave Brown a total of $57.7m (£36m), of which a record £2.4m was given to the Liberal Democrats. Former leader Charles Kennedy flew around Britain in Brown's private jet during the campaign for the 2005 General Election.

Brown was found guilty of theft, furnishing false information, and perverting justice. Along with a $4m (£2.6m) private jet and a £49,000 a year flat in Mayfair, London, Brown acquired a Range Rover, a Bentley, a Porsche, and a £400,000 yacht, Southwark Crown court heard.

The Glaswegian also spent £327,000 on an entertainment system for his villa in Majorca and £100,000 to upgrade the library at his gentleman's club in Belgravia, and £7,000 on fine stationery. The con man, last known to live in Templewood Avenue, Hampstead, north London, will not be sentenced until he is caught.