Revealed: secret new life of fugitive Lib Dem donor
Three years after going on the run, Michael Brown, the multi-millionaire fraudster and Liberal Democrat donor, has been tracked down to a Caribbean hideout.
Brown, who gave a record £2.4 million to the party, is living under an assumed name in the Dominican Republic, which has no extradition treaty with Britain.
Convicted in his absence and given a seven-year jail sentence for a multi-million pound theft, he has changed his appearance, eluding both an international manhunt and attempts to seize his fortune. Our exclusive photograph, taken from his golf membership card, shows that Brown has now grown a beard and allowed his blond-dyed hair to turn grey.
Living in luxury on the island and posing as an investor, he has set up a string of business ventures with unsuspecting local entrepreneurs, but has faced a criminal investigation over a disputed oil deal.
Brown has rented a series of grand properties, at one point living in a $1.4 million (£882,000) villa guarded by armed security guards, driving a $100,000 Audi Q5 car and playing golf on the island’s finest courses.
An investigation by The Sunday Telegraph has established that his escape from justice, which came after a Liberal Democrat peer unwittingly put up a £250,000 surety – money he has now lost – was intricately planned. He was aided by a convicted drug smuggler with links to organised crime, who has supplied him with a new passport.
Coming on the eve of the Liberal Democrats’ conference, the disclosures will embarrass Nick Clegg because his party has never repaid Brown’s donation, made in 2005, despite little doubt that the cash came from criminal means.
Claiming to be an international bond trader, Glasgow-born Brown, 45, who flew senior politicians around in his private jet, was running a massive pyramid fraud. Clients, including Martin Edwards, the former chairman of Manchester United, from whom he took £8 million, never saw a return on their investment.
In total, he persuaded wealthy clients to part with at least £36 million, although there are suggestions that the figure was more than £50 million, much of which has never been recovered. After being charged in 2008 on various counts of fraud and money-laundering, Brown was initially held in custody but lawyers persuaded the courts that he was not a flight risk. He was freed and his electronic tag removed.
As well as using a fake surname to open a new bank account, he altered the way he looked. He planned his escape with the help of Paul Nally, a convicted criminal who had served jail sentences for smuggling 18.7lb of cocaine through Heathrow and for his role in a £4 million ketamine distribution operation.
On June 30, 2008, at 6.15am, two minicabs picked up Brown and Nally from their homes in London and took them to Gatwick North terminal for a 10.30am flight to Puerto Plata in the Dominican Republic.
Brown booked the journey through a business account, leaving his and his accomplice’s name, address, mobile telephone number and flight details with the minicab firm, though he never paid the bill. Nally spent a week in the Dominican Republic – about the same amount of time it took before Brown was reported missing — before arriving back at Gatwick alone.
Since 2008, Brown has used the name Darren P Nally, embarking on a series of ventures that includes a real estate business which has opened a subsidiary in the Bahamas.
Last February, he was investigated over an oil deal after being accused of failing to honour a contract for 4,820 tons of oil. He was ordered to be held in custody for three months.
But he has always eluded the efforts of City of London police to bring him back to face justice in Britain. Last week, they were told by the Crown Prosecution Service that, with no extradition treaty in place between the two countries, he was effectively beyond the reach of the law.
Senior sources involved in the case have admitted that the chances of bringing him back to the United Kingdom are remote.
The Liberal Democrats have steadfastly resisted all attempts to force them to repay Brown’s donations. They insist they received the money in good faith from his British firm.
Brown’s flight from justice was personally embarrassing for Lord Strasburger, a Liberal Democrat donor, who put up the surety and allowed his home to be used as one of Brown’s court-appointed places of residence.
He told The Sunday Telegraph he had wanted Brown to have “a fair trial and an opportunity to defend himself, whether he was innocent or not”.
Brown was also facing a private prosecution for fraud by HSBC whom, Lord Strasburger says, “were spending heavily and employed a top QC to prosecute Mr Brown.
“Brown’s assets were frozen and legal aid was not an option which meant that he could not pay lawyers. I just wanted there to be a level playing field so that justice could be served.”
He added: “It was not a political issue as far as I was concerned, it was all about justice.
“It was my decision alone and I had no input whatever from anyone else.”
In 2009, an inquiry by the Electoral Commission cleared the Lib Dems of any wrongdoing over the £2.4 million donation from Brown on the grounds that his company was a permissible donor when it gave the money, and that the party had acted in good faith.
But last year Robert Mann, the US tax attorney whose $5 million (£3 million) investment with Brown provided a proportion of the donation to the Lib Dems, called on Nick Clegg to return the money.
“I hope that everyone involved in this travesty will ultimately do the honourable and right thing,” he said.
Mr Mann eventually had to drop his claim against the party after running out of funds to pay legal costs. During one of last year’s general election debates, Mr Clegg was challenged by David Cameron to return the money which the party had received from Brown.
The Lib Dem leader rejected the call on the basis that it was “years ago”. However, it is understood that the Electoral Commission may soon reopen the case.
Brown had charmed Charles Kennedy, then party leader, in early 2005 when he was still an unknown businessman and his money helped the Liberal Democrats to what was, at the time, their best election performance since the war. In fact, Brown was a practised con man who had managed to convince potential “clients” that he was a highly educated member of the landed gentry who would use US security services to vet potential investors.
In reality, he had run a string of failed businesses and was subject to an outstanding warrant for cheque fraud in Florida.
Shortly after he made the donation his mother, Patricia, said: “Let me just say he has certain character flaws and leave it at that. He is not someone I know very much about these days.”
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