Edinburgh brothel boss ‘Madam Moneybags’ fails to pay £780k

Margaret Paterson still owes �780k. Pic: Ian Georgeson.
Margaret Paterson still owes �780k. Pic: Ian Georgeson.
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WEALTHY criminals targeted under ‘dirty money’ laws have failed to hand over £7 million of their ill-gotten gains.

Prosecutors have boasted that they are taking millions every year under the Proceeds of Crime Act and diverting the money into community projects.

However, many of the crooks, including fraudsters, drug dealers and money launderers, still owe cash years after confiscation orders were imposed on them by courts.

Scottish Courts and Tribunals Service (SCTS) figures released under freedom of information laws show that there is £6,982,149 outstanding in confiscation orders compared to £6,578,568 last year. Almost £3.5m is owed by just 10 people.

As of last month, Edinburgh brothel boss Margaret Paterson, 65, had the largest amount outstanding at £780,440.

Paterson, who was dubbed ‘Madam Moneybags’ after making a fortune from prostitution, was hit with a £1m confiscation order in May, 2015.

In 2013, she was sentenced to five years in prison after being convicted for brothel-keeping, money laundering and living on the earnings of prostitution.

Drug dealer Alexander Cameron, 67, from Kirknewton, was ordered to pay £525,000 in April, 2014, but he was murdered in January, 2015, before he made any payments. An administrator has been appointed in an attempt to recover the money from his estate.

VAT fraudster Michael Voudouri from Bridge of Allan has not paid a penny back of a £207,339 order handed down to him in May, 2015. He is serving an 11-and-a-half year sentence for laundering the proceeds of a huge VAT fraud and breaching bail by going on the run to Cyprus.

Scottish Conservatives justice spokesman Liam Kerr MSP said: “The concept of taking money back from criminals and putting it into the community is sound.

“But it seems this legislation is increasingly toothless, with millions outstanding.

“There have been a number of high-profile cases where criminals who have clearly made fortunes from illegality are simply not coughing up.

“Either the legislation needs toughened up, or the authorities need to do more to chase down these debts.”

The SCTS said £5.3m of the money outstanding was “in arrears” while £1.6m was “on track” to be paid through instalments.

A spokesman said: “By its nature a confiscation order is a financial penalty which may take some time to recover in full.

“If an offender defaults in the payment of a confiscation order he or she will be called back before the court. The court may appoint an administrator to pursue the recovery of assets.”