THE businessman who bankrolled the Liberal Democrats’ election campaign is wanted in the United States where he could face up to five years in jail for fraud.

The Times can reveal that Michael Brown, who donated a record £2.4 million to Charles Kennedy’s party, was arrested three times and has been accused of bouncing 12 cheques worth more than $7,300.

The Scot skipped probation in Florida seven years ago while owing money to a court. He said yesterday that he was “truly shocked” to learn that he was regarded as an absconder.

The discovery places pressure on the Lib Dems to repay the donation, which amounted to two-thirds of its income in the first quarter of this year.

There is no precedent for a British political party keeping major funding from a donor who was a wanted man when the gift was made.

The Conservatives accepted £440,000 from Asil Nadir, but that was before he was accused of fraud and fled to Northern Cyprus. Labour took £11,000 from Charilaos Costa before he was investigated for fraud — and the party returned the cash to his creditors.

The Lib Dems have taken a strict line on funding. Norman Baker, the front-bench environment spokesman, has accused Tony Blair in the Commons of having to “rely on dubious businessmen for his money”.

Mr Brown has repeatedly misled The Times about his police record. He claimed that, in 1995, he was arrested in the US for signing three bounced cheques for about $40 each.

“I was penniless and eating noodles at supermarkets, where you can get packs of four for $1,” he said. “At Publix, a big supermarket chain, I wrote three cheques that bounced. I needed to eat and did it.”

But a visit to the beach town of Naples in Florida uncovered the truth about a tax exile whose gifts Mr Kennedy defended, saying that he had given “a colossal amount” to “UK-based and Scottish charities”.

Mr Brown has a record of run-ins with police over complaints of cheque fraud. Courthouse documents give his status as “absconder/fugitive”.

Mr Brown was first arrested in July 1995 after writing eight cheques for $580 for goods at the Publix and Sam’s Club supermarkets. A month later, the State of Florida dropped the case against him. In February 1997, he was arrested for bouncing a $673 cheque to the phone company Cellular One. The charge was also dropped.

Mr Brown was accused in February 1998 of withdrawing $3,550 from a Naples bank using a chequebook from an account closed six days earlier. A police file states that Mr Brown “gave a free and voluntary statement admitting to the offences, acknowledging that he knew the account was closed”.

The sums were so great that, this time, he was charged with “grand theft”, an offence that can bring five years in jail. His lawyer, Tamara Lynne Jones, struck a plea deal to keep him out of prison but she withdrew from the case when Mr Brown twice bounced a $2,500 payment cheque to her.

The charge was reduced to “writing worthless cheques”, which can also carry five years in jail. He was sentenced to one year’s probation with no judgment against him so that, if he complied with the rules, the slate would be wiped clean.

On August 24, 1998, Mr Brown signed a plea form. The document, seen by The Times, states that the prosecutor has agreed to a plea bargain, sentencing him to probation.

After the Scotsman failed to submit a written report on his activities, a probation officer called at his home in January 1999 to find it empty. He had moved to Spain, failing to pay the court $2,580 restitution for the victim, $253 costs, $30 for a drug test and $25 a month probation fees. This was another breach of his probation.

Judge Thomas Reese, of Naples Circuit Court, issued an arrest warrant. If Mr Brown returns he can be tried for violating probation. He also faces retrial for cheque-bouncing, to which he pleaded “no contest” in the deal avoiding prison. If convicted, he could be imprisoned for a further five years.

Mr Brown said yesterday: “I was truly shocked and at the same time very grateful to The Times for bringing this to my attention . . . I did not disappear to Spain. I am not aware of any probation hearings.

“I have been back to the US several times and I am sure that if . . . the Florida Criminal system [were looking for me], I would have either been arrested upon entry or deported.”

His spokesman added that he had visited the US six or seven times in recent years, including trips to Florida.

The true source of Mr Brown’s wealth remains a mystery. He claims his £10 million fortune originated through property development in Florida. Records show that he progressed from a small flat overlooking a trailer park to a $2 million apartment in a gated community in just three years.

Although he kept writing bad cheques, he had larger sums to hand to pay his bail. When he was seized for bouncing $3,550, his wife, Sharon Campbell, came up with $5,000 to secure his release.

None of his known companies in Naples ever filed reports or accounts, so there is no record of trading, profits or taxes. He now portrays himself as a trader in currency, futures and financial markets.

THE ARRESTS

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