Updated

The fugitive mobster brother of University of Massachusetts President William Bulger was sighted in London a few months ago sporting a tan and a gray goatee, the FBI said Friday.

A British businessman who had met James "Whitey" Bulger years ago spotted him in September -- the most reliable tip on his whereabouts in three years, Boston FBI spokeswoman Gail Marcinkiewicz said.

The mobster, a longtime FBI informant, fled in 1995, just before his indictment on charges of racketeering, extortion and drug trafficking. Bulger has also been charged since with involvement in the murders of 21 people and is on the FBI's 10 Most Wanted list.

Since the sighting, the FBI's multiagency violent fugitive task force in Boston and inspectors from New Scotland Yard have scoured London hotels, Internet cafes and gyms in search of Bulger, and have spent hours watching department store surveillance videos, Marcinkiewicz said.

The FBI weighed possible drawbacks to releasing information about the sighting -- such as tipping Bulger to leave England -- but in the end decided it was best to go public, Marcinkiewicz said.

"If you continually saturate the public with his photo, it's going to make someone recognize him," she said.

The businessman who alerted authorities said he had met Bulger while working out at a London hotel gym in 1994, a year before Bulger went on the lam.

The businessman, who was not identified, told The Boston Globe in Friday's editions that he spotted Bulger again on a London street in September, called his name and said, "Hi, mate, how are you doing?"

"He sort of looked quite shocked," the man said. Then Bulger walked away quickly, saying "No, no, you've got the wrong guy."

He described Bulger as wearing horn-rimmed glasses, a neatly pressed denim shirt and light-colored chinos. He said Bulger was white-haired and tanned and had a gray goatee.

The businessman said he only learned that Bulger was a fugitive a week later.

The sighting was the most reliable since January 2000, when a hairdresser reported seeing Bulger and his girlfriend, Catherine Greig, 51, in Fountain Valley, Calif., the FBI said.

"It just brings us closer," Marcinkiewicz said. "If you have more recent information, it gives you a better place to start."

Since the sighting, authorities have discovered two safe deposit boxes in London and Dublin, Ireland, that Bulger used. Nearly $60,000 and Bulger's Irish passport were seized, law enforcement officials said.

Bulger may have tapped Irish Republican Army contacts to get false ID, said William Chase, the acting special agent in charge of the FBI's Boston office. He would not elaborate.

"Most of his criminal association with the IRA and others probably gave him avenues to pursue false identifications, which we're sure he's availed himself of," said Chase, noting that they've investigated the IRA angle in years past but found no concrete link.

William Bulger is listed as the contact person for a safe deposit box Whitey Bulger opened in London in 1992. Thomas R. Kiley, an attorney for William Bulger, refused to say if his client knew about the safe deposit box.

William Bulger, former longtime president of the Massachusetts state Senate, last month refused to tell a congressional committee whether he knows his whereabouts. At a committee hearing on FBI ties to mob informants, he invoked his Fifth Amendment right against self-incrimination.

His brother disappeared after former FBI Agent John J. Connolly Jr. told him he was about to be indicted. Connolly, who grew up in the same neighborhood as the Bulger brothers, was convicted last year.