A former solicitor who dishonestly funnelled nearly £20m of investors’ money from a legal financing fund into his own pocket was today convicted on all five counts against him.
Timothy Schools, 61, received ‘just over £19.5m’ from the Cayman Islands-registered Axiom Legal Financing Fund, which was valued at around £120m before it collapsed in October 2012, Southwark Crown Court heard.
Jurors were told that the Axiom fund – which was set up to lend money to firms pursuing no-win no-fee claims – made loans in 2009 only to Schools’ Preston-based ATM Solicitors, so-called because he used it as ‘his personal cash machine’.
Schools was said to have used some of the money to pay for an estate in Cumbria, a personal trainer and a £45,000 corporate box at Blackpool FC’s home ground – which he told jurors was a ‘business expense’.
Axiom investors ‘lost everything’ and the collapse of the fund meant that ‘thousands of claimant clients got nothing’ while Schools was ‘making money hand over fist’, prosecutors told the jury in closing arguments last month.
After more than 28 hours of deliberation, jurors today found Schools guilty on three counts of fraudulent trading, one count of fraud and one count of transferring criminal property. Schools, of Penrith, Cumbria, was remanded in custody ahead of his sentencing on Thursday afternoon.
Judge Martin Beddoe said Schools had been convicted of ‘the most egregious and persistent offending involving huge sums of money’ and was now facing ‘a lengthy period of imprisonment’.
George Carter-Stephenson QC asked for Schools to be granted bail until he was sentenced so that his client could ‘speak to his family, to have some time with them so that he can discuss the likelihood of what is going to happen.’
But Beddoe told Schools: ‘I cannot believe, based on the evidence that was presented and indeed the evidence you yourself gave, that what has happened to you today has come as any real surprise.’ He added: ‘I simply do not trust you to be here on time at 2 o’clock on Thursday.’
It can now be reported that Schools, admitted in 1999, was struck off the roll in 2014 after allegations in relation to ATM Solicitors, including that Schools failed to act in his clients’ best interests, were found proven by the Solicitors Disciplinary Tribunal.
Schools’ co-defendant and former solicitor Richard Emmett, 49, of Grimsargh, Lancashire, was acquitted of one count of fraudulent trading and one count of facilitating the use of criminal property.
His solicitor Paul Schofield, a partner at north-west firm Farleys, said: ‘Richard and his family have had to endure enormous stress for almost five years. He has always protested his innocence, he has vigorously defended these proceedings and has now, at last, been vindicated by the correct verdicts returned by the jury and is delighted with the result.’
Jurors were unable to reach a verdict in relation to a single count of fraudulent trading against former financial adviser David Kennedy, 69, of Hetton-le-Hole, Tyne and Wear, and were discharged this afternoon.
Paul Raudnitz QC, for the Serious Fraud Office, said the prosecution needed more time to decide whether to seek a retrial of Kennedy. It was given until 1 September.
