A senior Labour MSP helped her crooked son cash in on a lucrative Holyrood flat he bought months after defrauding his employers of £3.7million.

Deputy presiding officer Trish Godman purchased her son Gary Mulgrew's Edinburgh apartment for £250,000 in late 2006, after he had been extradited to Texas.

But Mulgrew, who was last week jailed for his part in an international fraud, had initially bought the property in full, without the need for a mortgage, shortly after embezzling millions of pounds in the Enron-linked scandal.

The revelation comes after Mulgrew and two other bankers, dubbed the NatWest Three, were each sentenced in a Houston courtroom on Friday to 37 months.

The trio of bankers had defrauded their former employers, NatWest, by persuading the firm to sell an Enron-related venture at a knock-down price of $1m.

They then left Natwest, bought a stake in the enterprise that had been sold, and offloaded it for $20million.

Mulgrew, 46, and his fellow fraudsters received around £3.7million between them, in mid 2000, cash they used to invest in businesses and property.

The Sunday Herald can reveal that one of Mulgrew's post-fraud investments was a flat at Holyrood Road in Edinburgh, yards from the Scottish Parliament.

Documents from Registers of Scotland show the Scot bought the property in mid 2001, months after receiving the proceeds from the dodgy deal. He paid £245,000 in full for the apartment, without requiring a mortgage.

The only standard security Mulgrew took out on the flat was two years later, in September 2003, which was after he had been charged by US prosecutors.

In November 2006, at a time when Mulgrew had been extradited to Texas on fraud charges, Trish Godman and her husband, former Labour MP Norman Godman, bought the property for £250,000.

Days later, in documents submitted at Houston's federal court, US prosecutors accused Mulgrew of trying to hide his wealth by transferring cash to his siblings, such as giving his brother $60,000 to buy a house in Australia.

The Godmans' purchase of their son's property came at a critical point for Mulgrew, as months before the sale he had to pay bail of $200,000 and was facing huge legal costs.

Earlier reports indicated that Mulgrew sold his £250,000 of shares in Celtic Football Club to get bail. He and his fellow fraudsters later pleaded guilty in 2007 to one count of wire fraud, a plea bargain the judge accepted on Friday.

Godman's role in helping her son financially is controversial due to the senior role she occupies at Holyrood.

As well as being the Labour MSP for West Renfrewshire, Godman is one of the Parliament's deputy presiding officers. She chairs debates and acts as an ambassador for Holyrood.

It has been claimed in earlier newspaper reports that Mulgrew had agreements to rent out his Holyrood apartment to his mother for £1000 but the Sunday Herald has no evidence to back up that claim.

Between 1999 and 2005, Godman was revealed to have been the biggest MSP claimant of hotel costs, claiming £23,000 despite living in Glasgow. She has not made any claims for hotels since purchasing the flat.

There is no suggestion that Godman did anything illegal but the affair is embarrassing for Scottish Labour as the party has made seizing the assets of criminals a top law and order priority.

In 2002, the Labour-led Scottish Executive passed the Proceeds of Crime Act, which drew up new powers of confiscation, civil recovery and taxation.

Godman did not return calls yesterday.

SNP MSP Alex Neil said: "Labour has got to clean up its act - it's one story after another. This is not just damaging Labour, but politics in general."