A SCOTTISH businessman used a fortune stolen from Manchester United's former chairman to help donate a record £2.3 million to the Liberal Democrats and fund a "life of luxury", a court heard yesterday.
In just a few months, Michael Brown squandered nearly all the £7,937,000 allegedly swindled from Charles Martin Edwards and others who fell for his lies.
Apparently desperate to "create the illusion of a wealthy and influential man", the bogus b
ond dealer also blew a fortune on a Mayfair flat, where he later met the former football boss, London's Southwark Crown Court was told.
An office in the same area soon followed, as did a Range Rover with a personalised number plate, a £2.5 million private jet and a £327,000 entertainment system for his home in Majorca, Martin Edmund, QC, prosecuting, said.
"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.
"It is the old story: if you tell a big enough lie, people swallow it. After all, he had a front to maintain."
Mr Edmund told jurors it was the Crown's case that when Brown's "lies" began to "unravel", the Glasgow-born businessman used a sheaf of false documents in a bid to defuse suspicion.
He said Brown– who is being tried in his absence – sought to put "entirely inappropriate and criminal pressure" on investors "not to pursue complaints to police". He went on: "What it comes to is this: we suggest that when you look at the bank accounts, what they show is…money comes in from Mr Edwards and other investors; profits never come in because there is never any dealing.
"Money comes out, apparently to pay pretend profits on these pretend bond deals that never actually took place, and apparently to pay for Mr Brown's extravagant lifestyle, his business expenses and, apparently, donations. In particular, multimillion-pound donations to the Liberal Democrat Party, which enabled him to create the impression that he was an important and well-connected man."
Brown, 42, from London, denies committing nine offences between 9 February, 2005, and 17 April, 2006. They include three alleging theft of a total of £7,092,501 from Mr Edwards and three of transferring criminal property of the same overall amount. Another charge claims he furnished false investment information, and another accuses him of obtaining a money transfer of £6,250,000 by deception. He is also charged with perverting the course of justice.
Opening the four-week trial, Mr Edmund claimed Brown's front as someone with the "experience and the expertise to trade in high-value bonds on the international markets" first saw him pocket a £6,250,000 investment from a company called Univest.
The money was initially paid into a one of several HSBC accounts under Brown's control, but instead of being ploughed into bonds, ever larger sums were allegedly frittered away to help spin an illusory web of success.
Mr Edmund said: "If you are going to present yourself as a successful international bonds dealer, then accommodation in Mayfair would be a good start. It had a rent of £49,000 a year and indeed it was there he conducted business, particularly negotiations with Mr Edwards."
He told jurors Brown later splashed out on an office beside Hyde Park at £57,000 a year. The court heard Univest's money allegedly helped Brown paint the picture of success he needed to then woo Mr Edwards.
Apart from helping fund his lavish lifestyle, Brown also used some of his alleged victim's cash to pay "pretend" profits to other investors, to prevent them becoming suspicious.
Mr Edmund – who said £250,000 of Univest's cash ended up in Lib Dem coffers, along with money allegedly stolen from the former Manchester United chairman – claimed Brown's deceit also embroiled an unsuspecting HSBC bank official.
The trial continues.
