This is the blog of British investigative journalist Jason Lewis.
It features articles from my time as Investigations Editor of the Sunday Telegraph and Whitehall and Security Editor of the Mail on Sunday.
I specialise in writing on intelligence and security matters, human and civil rights and the activities of the British State.
Monday, 16 January 2012
Michael Brown: From £1.6m villa to prison yard, downfall of the Lib Dem fraudster
A tip-off from The Sunday Telegraph led to the arrest of convicted £36m conman Michael Brown in the Dominican Republic.
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Behind bars: Michael Brown in Higuey police station after being arrested in Punta CanaPhoto: Chris Bott
By Jason Lewis and Paul Thompson in Higuey, Dominican Republic
7:30AM GMT 15 Jan 2012
The knock at the door did not unduly disturb the man relaxing on the terrace of the £1.6 million villa overlooking the Caribbean.
Even when his wife opened it to discover members of the Dominican Republic’s armed police outside, Darren Patrick Nally was unfazed.
He was sure his secret was safe: he was not Nally, a man who said he was an Irish singer and had already been detained in prison on charges of failing to pay his debts.
In fact he was Michael Brown, a 45-year-old British fraudster whose web of lies and deceit had made him millions – £2.4 million of which he had donated to the Liberal Democrats for their 2005 election campaign, becoming their biggest single donor.
As he was arrested for unpaid rent at a former apartment, Brown was nonchalant. At the police station he told the local assistant prosecutor, Elizabeth Rijo, that he would pay the debt and be back home in time for dinner.
But then she dropped a bombshell: she knew his secret. For a long time Brown was silent, then said simply: “Yes, I am Michael Brown.”
And with that his years on the run from British justice and his victims had come to an abrupt end.
This weekend, Brown is surveying the ruins of his life of crime from a prison cell in Higüey; there is much to survey. His activities have taken him from Britain to Spain, Switzerland and America, and finally to the Dominican Republic, where he arrived three and a half years ago on a false passport – in the name of a criminal and supplied by a convicted drug smuggler with links to organised crime – in a country that, conveniently, has no extradition treaty with Britain.
Brown was then on the run, having been sentenced in his absence to seven years in prison for stealing more than £36 million in bogus deals with wealthy investors in Britain, much of which has never been recovered. One victim, Martin Edwards, the former chairman of Manchester United, lost £8 million.
In the comfort of London’s Caledonian Club he would sweet-talk potential clients, who could see his obvious success: a flat in Mayfair, a home in Hampstead, a fleet of prestige cars and a £400,000 ocean-going yacht. His personal jet ferried him between London and Spain, and was made available to the Lib Dems.
In April 2006, a year after the £2.4 million donation to the political party – and having helped the Lib Dems to their most successful election since the war – Brown was arrested at his Majorca villa over fraud.
He had convinced his victims that he was the Gordonstoun and St Andrews-educated son of a lord. They believed he used US security services to vet potential investors for his scheme, which was run from an office in Switzerland.
In fact he was from Glasgow, had failed his maths O-Grade, run a string of failed businesses, and was wanted for cheque fraud in Florida. The Swiss “office” was a room above an Irish pub in Zurich.
Free on bail during his trial, he obtained the false passport – which got him through Gatwick Airport – and fled to the Dominican Republic.
It had seemed like a safe haven, but Brown made a critical error: he apparently could not stop ripping people off. He is understood to have racked up hundreds of thousands of pounds in debts on luxury villas and expensive cars, persuading local investors to hand over cash for a succession of fictitious business deals.
Facing final demands for payment from landlords or threats from disgruntled business partners, Brown would simply pack up in the middle of the night and disappear.
One bogus deal involved shares in a non-existent Russian oil refinery which he said involved Boris Berezovsky, the Russian billionaire businessman. Berezovsky knew nothing about it and the investors lost their cash.
A villa owner leased him her large property after she was told he was a wealthy and reclusive composer for rock stars. Brown is said to have gone without paying thousands of pounds in rent and departed so hastily that he left his clothes behind.
Last February he was held for four months in the infamous La Victoria prison on the outskirts of the capital Santa Domingo, over a business dispute sparked by a £1.5 million deal. Crucially, the authorities did not know his identity was fake and he was freed.
Then, last September, The Sunday Telegraph told the island’s Interpol chief, Colonel Cabrera Sarita, that Nally was in fact Brown. The colonel entered the details into the national police computer and assured us he would be apprehended.
It did not happen immediately.
Brown was living at the six-bedroom villa he had purchased a few months ago in the gated Arrecife development at the vast Puntacana Resort, where his neighbours included fashion designer Oscar de la Renta.
Situated on the La Cana golf course, it must have felt like a dream hideaway for a man who went on the run from Britain with just two golf bags. The villa also has its own snooker room, decorated with maps of the Caribbean, and an extensive covered terrace leading down to the swimming pool.
He should have been able to relax – and he did. But 10 days ago, his luck ran out. Brown had apparently failed to pay a local businessman £54,000 in rent on another apartment, and the man, who was well-connected politically, went to the police, leading to the knock on the door.
Miss Rijo, based at Punta Cana police station on the eastern tip of the island, was at the head of a squad of six armed officers who were met by Sharon Brown.
The prosecutor said Brown was relaxed – at first.
“He was not worried at all, and when I told him why we were there he said he would settle the matter quickly and pay the money that he owed,” she told The Sunday Telegraph.
“Once at the station he called his lawyer and again was not worried. He said the matter would be settled quickly. 'I can pay the money,’ he said. 'This will be settled soon and I can go home.’
“Then I told him I knew he was wanted by Interpol over a large theft in the UK.”
Brown’s whole mood changed and for some time he did not say anything.
“He realised I knew who he was,” said Miss Rijo. “Then he told me, 'Yes, I am Michael Brown.’”
Last week, Brown refused to answer questions as he was paraded in front of The Sunday Telegraph at the police station. A local judge has now remanded Brown in custody for a year and he has been transferred to the main prison in Higüey.
He is being held while the Dominican Republic’s national police investigate his crimes on the island – and until he is deported to Britain. Although there is no extradition treaty, he could be deported because he entered the country under a false identity, which is a breach of Dominican law.
Last week prosecutor Mercedes Rodriguez led a team of armed officers to search his house and seize his Porsche 4x4. His mother-in-law was at the property, but there was no sign of 28-year-old Carol Baez, Brown’sconcubina – his live-in girlfriend – who was named in previous court papers lodged against Brown.
In the house was a framed photograph of his dog Charlie, said to have been named after the former Liberal Democrat leader Charles Kennedy.
But of more interest to the Dominican authorities are a series of files that show Brown’s financial transactions, some in Miami.
“There was paperwork to show that he has several bank accounts in the United States,” said Miss Rodriguez.
“There were also a number of post office boxes that he has been using. The large sum of money that Mr Brown stole in the UK has led us to suspect that he has that money in some of those accounts. We do not know what he was doing with all the money but we will see where it has been going and if it has been coming in illegally.
“We will be contacting the authorities in the United States to ask for their co-operation. There have been money transfers from the United States to the Dominican Republic. This man has been involved in lots of businesses. He is not just living here for leisure.”
Brown has been remanded to the Modelo Penitenciaria de Anamuya, where he is being held in a cell with three other prisoners. Last week Brown was processed, allocated a number and a cell. He was allowed a shower before being issued with the prison uniform of a green T-shirt and blue shorts.
The year-old jail is home to 850 prisoners, two of them Britons on drug offences. Until he is flown back to Britain Brown will be woken at 6am and, after a shower, made to stand with the other prisoners for a head count. He will sit down to a breakfast of cereal and coffee before either working in the bakery and laundry room or helping prisoners learn English.
Lunch at 11am will be followed by more work or classes, an evening meal of rice and beans, before watching television in a communal room and lock-up.
There is little comfort, no internet access and limited visits – although on Sundays inmates are allowed conjugal visits from their partners.
Brown now has plenty of time to contemplate the end of his criminal career. A flight to Britain is looming as soon as the City of London police get in touch with their Dominican counterparts, and there is the worrying prospect of an FBI investigation into his American accounts.
Meanwhile, the Lib Dems are feeling increasingly uncomfortable at his return, and with it the reopening of the question of whether they have to return his donation to his victims, risking bankruptcy.
An Electoral Commission investigation is still under way and Labour MPs are calling for Nick Clegg’s party to be forced to pay up.
For Michael Brown, his days in the Caribbean are turning out to be a lot less comfortable than planned. And it would appear he’s not the only one likely to suffer.