The Liberal Democrats’ biggest financer is a bogus bond dealer who used money stolen from the former chief executive of Manchester United Football Club to help make huge political donations, Michael Brown deceived Martin Edwards into handing him $12.7million on the understanding that the money would be used for international bond trading operation in 2005

In the same year Mr Brown gave £2.4 million of the money to the Liberal Democrats. A further €1 million was spent by Mr Brown on himself for his personal and business expenditure, Martin Edmunds, QC, for the prosecution, told the jury that Mr Brown had made the political donation which “enabled him to create the impression he was an important and well-connected man”.

Millions more of plundered cash was used to fund an “extravagant lifestyle”, to meet business expenses and to keep other investors happy with “pretend” returns, it was claimed. Mr Edwards , 63, was chief executive of Manchester United from 1980 until he sold his stake in the club for a reported £90 million in 2002. He remains honorary life president.

Mr Brown, 42, allegedly deceived his victim by assuring him that his money would be used for bond trading, that it would be kept in an HSBC bank account under his name and that there was no risk to his funds. The court heard that Mr Brown obtained $10 million from Mr Edwards in February 2005, followed by further sums totalling $2.7 million. In return he was allegedly promised that he would receive substantial profits from bond trading.

In fact, it is alleged, Mr Brown transferred the money into an account of his own company, 5th Avenue Partners. Mr Edmunds told the court: “He simply never intended that the funds would be used for the purpose of trading bonds or to stay that account. Mr Brown used the money as his own.”

A third of the initial investment was used by Mr Brown to make payments to other people who had invested with him under the pretence that they were the profits of bond trading, the court was told.