Edinburgh prostitute boss faces £1.2m police claim

A BROTHEL boss dubbed “Madam Moneybags” is set to lose her haul of designer handbags as police bid to claw back £1.2 million in dirty cash.

Margaret Paterson regularly went on lavish spending sprees at city stores such as Harvey Nichols, Louis Vuitton and Mulberry, splurging thousands amassed during an industrial-scale prostitution racket she ran from a West End address.

Now – in addition to five years behind bars – the remorseless 61-year-old faces financial ruin after the Crown confirmed it will seek to recoup the colossal seven-figure sum under Proceeds of Crime rules.

The confiscation grab would be one of the biggest single hauls in Scottish legal history.

A legal source said: “In terms of assets they will almost certainly go after her handbags and other designer gear. It’ll be sold off at auction and the money handed to initiatives to aid the fight against crime.”

Incredibly, the greying brothel keeper arrived at the Sheriff Court yesterday sporting a tan £200 designer Charles Jourdan handbag.

The court was told Paterson spent nearly £6000 on two more handbags after she was arrested, also clearing £24,000 out of one of her accounts.

Dressed immaculately in a navy dress, she chatted to former lover Robert Munro before both were sent down for five years for running the sex empire, with clients even said to include police officers.

Ian Goalen, a former bank manager who worked as a driver for AaBella Escorts, escaped jail after earlier pleading guilty to living off immoral earnings. He was given a 150-hour Community Payback Order after ­testifying against the duo.

Paterson and Munro, both 61, barely flinched as Judge Michael O’Grady QC imposed sentences which will help to protect the countless vulnerable girls they had used.

He said the couple “worked hand in glove throughout”, taking advantage of women in financial dire straits, to turn huge profits. “It has been an operation remarkable on its scope, sophistication and organisation – not to mention its profitability,” he said. “It has also been remarkable for its cynicism. You constructed and maintained an elaborate, albeit paper thin, facade, portraying yourselves as an innocent escort agency, if that’s not a contradiction in terms.”

He added: “Indeed, in your background report Margaret Paterson, you appear to consider you have been virtually a social service. I doubt that even the two of you believe a word of this.”

Following last month’s trial, Paterson was convicted of laundering £700,000 and a further £544,000 with Munro.

Nearly £600,000 was spent on luxury goods and ­services, with the rest laundered through the company bank account or found as cash stashed at her nearby flat.

Police raided their premises in Grosvenor Street in September 2011 where they found sex toys, designer shoes and credit card records showing Paterson had spent £461,604 in some of the city’s most exclusive shops.

Officers who searched her home found £204,660 cash and a shared business bank account containing £544,601.

Now crown officials have begun confiscation proceedings against all three.

A Financial Reporting Order, designed to monitor the criminals’ financial affairs after conviction and prevent further economic crime, is being sought for Paterson and Munro because of their “substantial contacts” in the escort world.

Phoning to say they were ‘safe’ meant they’d been paid

Paterson, who was born in Penicuik and grew up on a farm, would handle calls for Edinburgh, while Munro fielded clients from Glasgow, Aberdeen and the rest of the Lothians.

The women would phone Munro or Paterson after arriving at a client’s home or hotel room to say they were “settled” or “safe”, which meant they had been paid. Paterson was always quick to get her percentage, with drivers even dropping off money at her nearby home if she was not at the “office”.

The agency accepted “in-calls” at Grosvenor Street where men called round to have sex with the prostitutes on the premises.