Page last updated at 17:05 GMT, Friday, 28 November 2008

Top Lib Dem donor stole millions

Michael Brown (Paul Grover/ Rex Features)
A warrant has been issued for Michael Brown after he went missing in July

A bogus international bonds dealer who donated 2.4m to the Liberal Democrats has been found guilty of stealing more than 30m from clients.

Southwark Crown Court heard Michael Brown defrauded 36m, including 8m from former Manchester Utd chairman Martin Edwards.

He was tried in his absence after skipping bail and is still on the run.

Lib Dem leader Nick Clegg said the party had done all the necessary checks and was "totally unaware" of the fraud.

"We took that money in good faith, everyone recognises," he told the BBC.

Brown will not be sentenced until apprehended.

He had channelled the gift to the Liberal Democrats through a company called 5th Avenue Partners, Southwark Crown Court heard.

The Electoral Commission had ruled it was "reasonable" for the party to regard his donation as "permissible".

'Properly spent'

Meanwhile, an American lawyer has launched High Court action for the return of hundreds of thousands of pounds he claims Brown gave to the Lib Dems.

The jury was told Brown pretended his father was a Lord, claimed connections with royalty, and promised investors returns of up to 50%.

The trial heard he carefully crafted an "illusion of wealth and influence" designed to give him social acceptability which he craved.

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

'Spending spree'

Brown spent the millions remaining to fund an "extravagant lifestyle," pay business expenses and keep other investors happy with "pretend" returns, the court heard.

Martin Edmunds, QC, prosecuting, said Brown rented a 49,000-a-year Mayfair apartment where he "conducted negotiations" with Mr Edwards.

His 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 also spent 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.

Lies unravelled

It was said his "front" knew no limits and during a confrontation with a suspicious bank official he trotted out his "I'm a successful bond trader" mantra.

He claimed he met the Duke of York at Buckingham Palace and spoke of connections with the US embassy.

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

And he continued to protest his innocence after his arrest.

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

Brown was last known to live in Templewood Avenue, Hampstead, north-west London.

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

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