guardian.co.uk,
Rajeev Syal, Friday 6 January 2012
 |
| Michael Brown is the Lib Dem’s biggest ever donor. He has been arrested in the Dominican Republic after disappearing while on bail. Photograph: Paul Grover/Rex Features |
The Liberal Democrats' biggest donor, who has been on the run for three years after being
convicted of a multimillion pound theft, has been arrested by police in the
Dominican Republic, the Guardian can disclose.
Michael
Brown, who bankrolled the party with £2.4m of stolen money, was detained near
the resort of Punta Cana on the easternmost tip of the Caribbean island this
week. Interpol has been informed.
Named by
City of London police as one of Britain's most wanted fraudsters,
Brown, 45,
disappeared while on bail for a £40m fraud and was sentenced in his absence to
seven years in prison.
His arrest
signals the end to an international hunt that has involved five law enforcement
agencies across three continents, and could lead to his return to Britain to
serve his sentence.
It will
mean further embarrassment for Nick Clegg, the deputy prime minister. The Lib
Dems have refused to compensate Brown's victims, whose money went into the
party's coffers to finance the 2005 election campaign.
The
development could lead to renewed legal efforts by his victims to seek
compensation from the Lib Dems and Brown through the British courts.
A City of
London police spokesman confirmed Brown's arrest. "We are pleased to hear
that Michael Brown has been detained by authorities in the Dominican Republic,
and are currently establishing contact with them to find out further details
about his arrest.
"Clearly,
at some stage we will look for his return to the UK, so he can serve the
sentence for the fraud offences for which he has been convicted in this
country," he said.
Earlier, a
diplomatic source said British authorities were informed of Brown's arrest on
Thursday. "There has been considerable co-operation between the two
countries. There is a belief that Brown should be returned to Britain but there
are still hurdles to overcome," the source said.
There is no
extradition treaty between Britain and the Dominican Republic. However, a
Dominican government official indicated Brown could be deported without an
extradition process. Brown is believed to have entered the island under a false
identity, which is a breach of Dominican law, he said.
"If
someone comes to the Dominican Republic on false documents he is breaking our
laws and we do not want him here. That person can be deported," he said.
Brown,
originally from Glasgow, appeared from nowhere when he approached the Lib Dems
in November 2004 with an offer of money for Charles Kennedy's impending
election campaign. The brash, ponytailed Brown lived in Majorca and claimed to
be an offshore trader. He said his clients were vetted by US embassy officials.
Despite not being a party member, not being registered to vote, and living
abroad, he was welcomed with open arms by the party's grandees.
Within
months, Brown was flying Kennedy across Britain in a private jet and was being
invited to dinners in Mayfair. Former Lib Dem insiders say he dazzled them with
stories of Gordonstoun public school, St Andrew's University and his
connections with royalty.
The truth
was that he had failed his maths O-level at his local school and completed a
City and Guilds in catering at Glasgow College of Food Technology. He had no US
government links – although he was wanted in Florida for cheque fraud.
The party
received the donation through his company, 5th Avenue Partners. It remains the
biggest ever received by the party from an individual. In the general election,
the party increased its share of the vote by nearly 4% after his cash was spent
on posters and advertising.
Brown was
arrested in late 2005 after four former clients said he had duped them out of
more than £40m in a high-yield fraud. His victims included Martin Edwards, the
former Manchester United chairman, who had invested £8m with 5th Avenue
Partners.
The court
would later be told that 5th Avenue Partners was wholly fraudulent and that
Brown had given money to the Lib Dems to give himself an air of respectability
whilst duping his victims.
In June
2008, while awaiting trial for theft, false accounting and perverting the
course of justice, Brown fled and a warrant was issued for his arrest. In the
weeks before he disappeared, from his Hampstead bail address in north London,
he changed his name on the electoral roll to Campbell-Brown and allowed his
hair to turn grey.
City of
London detectives have worked with Interpol, the FBI, and police in Spain,
Switzerland and the Dominican Republic to trace his whereabouts.
Brown is
believed to have been arrested because he had been living in the Dominican
Republic on false documents, diplomatic sources said. The Guardian has obtained
copies of Brown's false identity papers and passports using the name Darren
Patrick Nally.
The
fugitive enjoyed a millionaire's lifestyle while on the run. He lived in gated
communities yards from some of the most pristine beaches in the Caribbean,
drove a series of 4x4 vehicles and was a regular at exclusive golf courses.
In Punta
Cana, he could often be seen walking his dog – named Charles, after the former
Lib Dem leader.
Since 2008
Brown has used the name Nally to embark on a series of ventures that included a
real estate business which has opened a subsidiary in the Bahamas.
Last
February, he was investigated in the Dominican Republic over an oil deal after
being accused of failing to honour a contract for 4,820 tonnes. He was ordered
to be held in custody for three months.
If Brown is
returned to Britain it will launch renewed high court claims for the Lib Dems
to return his stolen money.
Tony Brown,
managing partner at law firm Bivonas which represents US attorney Robert Mann
who lost more than $5m (£3m), said that Brown would be asked to give evidence
as part of his client's claim against the Lib Dems.
"We
hope on Michael Brown's return he will be able to assist our client Robert Mann
resurrect his claim in the High Court against the Liberal Democrats for the
return of his stolen money," he said.
Mann's
legal team was forced last year to drop a high court claim against the Lib Dems
for the return of around $600,000 after running out of funds.
A Lib Dem
spokesman declined to comment on any future high court action, but added that
the donation was accepted in good faith and was cleared by an Electoral
Commission inquiry. "There is no indication that the Electoral Commission
will revise its opinion in this matter but any arrest abroad should lead to his
[Brown's] extradition to the UK," he said.
A spokesman
for the Dominican Republic embassy in London declined to comment. Edwards
also declined to comment.
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