A WOMAN who masterminded a lucrative prostitution business has been jailed for five years.

Businesswoman Margaret Paterson, 61, and her business partner Robert Munro, 61, were given identical prison sentences for operating a lucrative Edinburgh based vice business.

The High Court in Edinburgh heard how the pair pocketed hundreds of thousands of pounds from a criminal enterprise which operated across the United Kingdom.

The pair's sidekick Ian Goalen – who drove the prostitutes who worked for Paterson and Munro to appointments with clients – was ordered to perform 150 hours of community service.

The former bank manager, 59, was handed a non-custodial sentence because he provided police with evidence which was used to snare the pair.

During a 10-year period, Paterson and Munro provided prostitutes for people all over Scotland and the north of England.

The former night manager of one of Edinburgh's leading hotels used to phone the pair's agency to book prostitutes for his guests.

However, their lucrative scam came to an end when police raided their premises in Edinburgh's Grosvenor Street.

Officers found sex toys, designer shoes and evidence which showed Paterson had gone on a £461,604 spending spree in some of Edinburgh's most exclusive shops.

Detectives found credit card records which detailed how she bought luxury items from Harvey Nichols, Louis Vuitton and Mulberry.

Policemen who searched Paterson's home also found £204,660 in cash. They also discovered mobile phones which punters used to ring in order to book sessions with the prostitutes.

Passing sentence yesterday on Paterson and Munro, temporary judge Michael O'Grady, QC, condemned the pair who believed they were providing customers with a legitimate business service.

The court also heard that when Paterson was awaiting trial, she also spent a total of £4250 on handbags. She also emptied a personal bank account of £24,500.

Saying the pair exploited the women who worked for them, Judge O'Grady added: "It has been an operation remarkable in its scope, sophistication and organisation – not to mention its profitablity."

The trio were also convicted of proceeds of crime and immoral earnings charges after trial at the High Court in Edinburgh last month.

Paterson, of 10B Grosvenor Street, Edinburgh, Munro, of 18 Grosvenor Street, Edinburgh, and Goalen, of North Berwick, East Lothian, had originally pled not guilty to a total of seven charges.

The court heard Paterson set up AaBella Escorts in October 2002 and it quickly became a money-spinning venture for her and business partner Munro. They also set up a brothel which operated from 2A Grosvenor Street in Edinburgh.

The trial heard the girls who worked for the agency charged clients £150 for an hour-long sex session. Each of them said they were poor and were struggling with their finances.

The court also heard from Roderick MacLeod, 45, who worked as a night manager for the George Hotel in Edinburgh between 2004 and 2009. He told Mr Kearney said "somebody" provided him with a telephone number for AaBella Escorts.

Mr MacLeod said that whenever a guest wanted an escort, he would telephone AaBella and they would send girls to the hotel. He said he used the agency once during his time working at the hotel.

Paterson's QC, Edward Targowski, asked Judge O'Grady not to jail his client saying she suffered from chronic depression and had fought "serious" cancer.

Munro's defence solicitor advocate, Vincent Belmonte, said his client was a former musician, engineer and restaurant owner who had served in the Territorial Army.

Mr Belmonte added: "He has served his country through his time in the army reserves."

However, the judge said he had no other option but to send the pair into custody.

Paterson was convicted of laundering £700,000 of cash from her prostitution business. She and Munro were convicted on a separate charge of laundering £594,741.

Speaking after sentencing, prosecutor Lindsey Miller, the head of the Crown Office's Serious Organised Crime Division, welcomed the conviction.