A Scots brothel boss jailed for five years for running a lucrative escort business has died after a cancer battle.

Margaret Paterson - dubbed Madam Moneybags - passed away aged 66 at the St. Columba’s Hospice in Edinburgh on Friday.

Paterson became notorious after sordid details of her sex-for-cash empire and massive shopping sprees hit the headlines following a 2013 trial.

Margaret Paterson, who liked designer goods, arrives at a court case with a Louis Vuitton handbag

The pensioner enjoyed a lavish lifestyle bankrolled by her sleazy business, splashing out nearly £500,000 on designer goods.

Paterson - whose lust for exclusive handbags earned her the nickname - also ran brothel in the city’s posh Grosvenor Street.

We revealed last year how she’d been awarded public cash through legal aid to fund a court appeal - despite still owing £780,000 in crime profits.

Margaret Paterson has passed away aged 66

But in November she lost a bid to quash her conviction after a judge at the Court of Session in Edinburgh threw it out.

It’s understood Paterson had been in ill-health for some time.

Paterson lived the high life on profits from her brothel and escort business.

The vice girls considered well-spoken Paterson as the boss with her former lover, Robert Munro, her second-in-command.

She was known to give her hookers advice on domination for clients who wanted to be submissive.

Police discovered Paterson and Munro were in charge of prostitutes in Edinburgh, the Lothians, Glasgow and Aberdeen. Sixty-five vice girls worked from the New Town basement flat for nine years.

They were sent out to meet clients at their homes and hotel rooms, while men visited the address for “in-calls” to choose an escort and pay for sex.

A huge pile of cash was found at Margaret Paterson's premises

The racket came crashing down after a police raid in September 2011.

Stunned detectives spent two days searching Paterson’s home, also in Grosvenor Street, to sift through piles of clothes and handbags, many unused and in original wrapping.

Cash totalling £204,660 was found kept in bags and a safe.

Jewellery including a £4320 Versace watch and two rings worth £1400 each were discovered, still in their boxes.

Paterson was jailed in July 2013, with Munro also handed a five-year term.

Paterson was slapped with a court order in 2015 to stump up £1 million under proceeds of crime laws.

A court heard Paterson’s assets included a property portfolio in Edinburgh and bank accounts.

Paterson wanted the Scottish Criminal Case Review Commission to back her appeal case.

The SCCRC - a body who examine cases for possible miscarriages of justice - previously refused to refer hers for appeal judges to consider.

She sought a judicial review of that decision in the hope of clearing her name, but that effort was rejected.

Last year Paterson faced being made bankrupt. The Crown Office confirmed it was applying for an administrator to be appointed to sell off her assets and claw back an outstanding £780,440 from her criminal gains.