A struck-off solicitor who dishonestly funnelled nearly £20m of investors’ money from a legal financing fund into his own pocket to fund a luxury lifestyle has been jailed for 14 years.
Timothy Schools, 61, was found guilty on Tuesday of three counts of fraudulent trading, one count of fraud and one count of transferring criminal property in relation to the Cayman Islands-registered Axiom Legal Financing Fund.
The Axiom fund was purportedly set up to lend money to firms pursuing no-win no-fee claims but collapsed in October 2012, jurors were told, meaning investors ‘lost everything’ while Schools was ‘making money hand over fist’.
Prosecutor Paul Raudnitz QC, for the Serious Fraud Office, said today that the Axiom fund lost more than £100m and that ‘the number of clients whose cases were affected was in the range of 35,000’.
Schools’ barrister George Carter-Stephenson QC argued that ‘at the outset this was not a dishonest scheme’, adding that those who put money into the fund were ‘sophisticated investors’.
But Judge Martin Beddoe said that the Axiom scheme was fraudulent ‘more or less from the start’, telling Schools that he is an ‘utterly dishonest man and that characteristic … has regrettably run through you for a very long time’.
‘I have no doubt, I’m afraid, that you always saw this as a “get rich quick” scheme,’ the judge said, adding: ‘I reject the idea that you simply set up the scheme for the benefit of others.’
He sentenced Schools, of Penrith, Cumbria, to a total of 14 years’ imprisonment, of which he will serve half before being released on licence. Schools was also disqualified from being a company director for 15 years and will face confiscation proceedings in due course.
Schools received ‘the best part of £20m’ from the Cayman Islands-registered Axiom fund, using some of the ill-gotten gains to buy a £5m estate in Cumbria, a ski hotel in France, luxury cars and a box at Blackpool FC’s home ground – which he claimed was ‘a business expense’.
Jurors were told that in 2009 the Axiom fund made loans only to Schools’ Preston-based ATM Solicitors, so-called because he used it as ‘his personal cash machine’.
Schools 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.
SFO director Lisa Osofsky said in a statement: ‘Mr Schools deliberately abused his position of trust to enrich himself. Through a complex web of lies, he attempted to hide his fraudulent activity while spending other people’s hard earned money.’
Schools’ co-defendant and fellow 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.
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, with a hearing due to take place next month to consider any potential application for a retrial.
