Edinburgh Brothel: Couple say escort firm legal

Margaret Paterson and Robert Munro ran their multi-million pound operation from this flat in Grosvenor Street. Picture: JANE BARLOW
Margaret Paterson and Robert Munro ran their multi-million pound operation from this flat in Grosvenor Street. Picture: JANE BARLOW
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THE UNLIKELY madam convicted of running a multi-million pound sex-for-sale empire today insisted their agency was a perfectly legal business which “paid our taxes”.

Margaret Paterson and her ex-lover Robert Munro, both 61, are facing jail after being found guilty of operating a brothel and a nationwide escort sex business from a flat in the city’s West End.

• ‘Police officers came in as customers’

• Neighbours’ shock as brothel revealed

• Madam spent thousands of pounds in Harvey Nicks and Louis Vuitton

• High-flyer turned driver in hard times

• Hotel fixer found girls on request

• Crops discovered in flat were for ‘horse-riding’

But speaking to the Evening News, Paterson – dubbed “Madam Moneybags” because of her penchant for stashing away huge sums of cash in her cluttered flat – insisted police had been well aware she ran an escort agency.

And Munro claimed the prosecution had been sparked by a “vendetta” with a rival agency “jealous” at their success, adding that they had checked with “lawyers, accountants and the police” to ensure the business was legal, adding that no customers had been caught “with their trousers down”.

Detectives targeted the Grosvenor Street escort agency after receiving a tip-off that trafficked women were being forced into prostitution. 
Officers found no evidence of trafficking, but were shocked to discover the “magnitude” of the operation and its vast profits.

It is estimated Paterson made up to £1 million from the buiness.

Crashing down

The inquiry team found that the business ran prostitutes in Edinburgh and the Lothians, Glasgow and Aberdeen from the flat for nine years, with 65 vice girls on their “books” and details of over 1500 bookings.

Up to eight women a night worked from Grosvenor Street, being sent out to meet clients at their homes and hotel rooms, while men visited the basement flat on “in-calls” to choose an escort and pay for sex in one of its two bedrooms.

The lucrative business came crashing down when police raided the flat in September 2011, and Paterson and Munro were convicted after a month-long trial at the High Court in Edinburgh which could not be reported until the verdict. Co-accused Ian Goalen, a former bank manager who acted as a driver for the working girls, pleaded guilty to living off immoral earnings.

The court heard how Paterson, whose family run the Ritz Hotel in Grosvenor Street, had gone on a £461,604 spending spree in some of the city’s most exclusive shops, buying armfuls of luxury goods from Harvey Nichols, Louis Vuitton and Mulberry.

Cash in bags

Stunned detectives spent two days searching her home, also in Grosvenor Street, to sift through piles of clothes and handbags, many of them unworn and still in the original wrapping, while £204,660 was being kept in bags and a safe. They discovered a number of mobile phones which men used to ring and book sessions with the prostitutes, with more than 1000 texts from clients found stored on the devices.

Both now face jail sentences of up to seven years as they continue to protest their innocence.

Following the verdict, Paterson said the police had long known she ran an escort agency.

“The girls all worked voluntarily. No-one forced them to work,” Paterson said.

“We ran an escort agency, we did not run a brothel because we wanted a proper business. The police had surveillance on us for six weeks and never saw anybody come to the flat except for two Indian men delivering takeaways and a pizza delivery man. When the police did the raid, or whatever you call it, they did not find any customers. Our mistake was to put down visits to client’s houses as ‘in-calls’.”

Vendetta

She added: “They searched my flat for two days. I don’t deal drugs, I don’t traffick people. All the girls working for us have to be at least 20 years old. I can account for all the money they found. My uncle, before he died, left me a large sum of money and that was it.

“I called the police to a client’s house whenever the girls had a problem. I would tell them I ran escort agency.”

Munro said: “We did not know the girls would have sex. Nobody forced them to do it. This was a perfectly legal business. We paid our taxes to HRMC.

“We were described as having run a brothel, which is total rubbish. Clients may have come to the flat, but that was to pick a girl and go out again, whether they were taking them to 
dinner or whatever.

“Making introductions to clients is not against the law. It was for companionship and time. If the girls wanted to sit and chat with the clients then they could have done that.”

He added: “This has come about because of a vendetta from a rival agency. This agency has been out to get us from the very beginning. They were jealous because we ran a better business.”

Explicit photos

Paterson set up AaBella Escorts in October 2002 with Munro after buying a flat in the same street as a base of operations. They ran a string of websites, featuring explicit photographs of the women working for them.

The pair even got the women working as escorts to sign contracts that the business was not responsible if they had sex with customers.

Detective Superintendent David Gordon, from the Specialist Crime Division, led the inquiry after his team was tipped off that women at “risk of exploitation” were working for 
Paterson and Munro.

He said: “An investigation was carried out to establish the circumstances of the business to see if any women had been trafficked or forced into the sex industry. We did not expect to discover the extent of the operation, and the amount of cash we recovered.”

Det Supt Gordon said that no trafficked women were found working there, but evidence of a “large organised criminal business” was 
uncovered. He said: “It was planned and involved the use of a number of phones and drivers. They operated in Edinburgh, Glasgow and Aberdeen. Multiple mobile phones were used to control a network of sex workers.

Sex toys

“They claimed it was an escort business offering companionship and friendship only, but a number of females were involved in prostitution. The two motives across organised crime are profit and power. They made significant criminal profits from this venture and had significant 
control over the females.”

Det Supt Gordon said that Paterson was “well-known” in shops like Harvey Nichols as “someone who spent a lot of money”.

During the raid, officers recovered sex toys, condoms, pornographic films, handcuffs and riding crops from the flat used as a brothel. Officers discovered Marks & Spencer credit card slips in Paterson’s flat showing she spent more than £400,000 in Harvey Nichols, Louis Vuitton and Mulberry between 2003 and February last year.

Profits

The officers also learned deposits were constantly made into the agency account, believed to be from prostitutes in Glasgow and Aberdeen paying the agency’s cut of the profits.

Paterson and Munro, who declined to give evidence during the trial, had originally pleaded not guilty to a total of seven charges, but both were found guilty by a unanimous verdict.

Paterson looked intently at the jury before the first guilty charge was returned while Munro, arms folded, looked off into space. Sentence on Paterson and Munro – who have no previous convictions – was deferred until July 8 for reports and both were granted bail. Munro was ordered to surrender his passport while Paterson said that she did not have one. The pair will also be pursued for cash under the Proceeds of Crime Act.

1000 client messages

MORE than 1000 text messages from clients were recovered from phones used by Paterson and Munro.

One message read: “Hi. Just called for an escort but will have to cancel unfortunately as my parents have arrived home unexpectedly.”

Another said: “Hi, it’s John. I’m in a taxi coming through. Can I have an older woman who smokes?”

Another read: “Hi. Just looking at a picture of Scarlet and was wondering if she does husband and wife?”

Still live online

THE website and Twitter account for the AaBella agency remain live despite police shutting down the business 21 months ago.

Paterson and Munro took particular pride in keeping their sites at the top of Google search lists.

But the website also featured disclaimers they hoped would protect them from prosecution.

One read that the escorts were paid for “time and companionship only”. It added: “If anything else happens, it is a matter of coincidence between consenting adults.”