Schools: Fund collapsed after four years
The struck-off solicitor jailed for 14 years for the Axiom Legal Financing Fund fraud has been ordered to pay back £1.1m or face a further five years in jail.
The Proceeds of Crime Act hearing at Southwark Crown Court heard that the value of the fraud led by Timothy Schools, 65, was around £146m, when inflation was added to the £105m that was lost.
There are separate civil recovery proceedings ongoing.
The Cayman Islands-based fund – which lent money to law firms to pay for disbursements, mainly for personal injury cases – closed in October 2012 after four years in the wake of allegations of fraud, and went into receivership in February 2013 owing investors around £120m.
Mr Schools was struck off in 2014, although the charges did not relate to the Axiom fund – which has no connection with the most recent alleged fraud at Axiom Ince.
More than 500 investors sank cash into the fund. Mr Schools received nearly £20m from it, using some of the money to pay for an estate in Cumbria.
He also had a £45,000 corporate box at Blackpool FC’s home ground, claiming it was a business expense for the purpose of corporate hospitality.
He owned Preston firm ATM Solicitors, given its name because he used it as “his personal cash machine”, his 2022 trial heard. He claimed it was a “cashpoint” for clients to conduct their litigation and receive compensation.
Axiom’s marketing material claimed investors’ cash would be held in the Cayman Islands and forwarded to an ‘independent panel’ of law firms that would pay it back with 15% interest.
However, Mr Schools only loaned money to a very limited number of firms and the money mainly just went to firms Mr Schools was involved with.
Describing him as an “utterly dishonest man”, Judge Martin Beddoe sentenced him to eight years in prison for fraudulent trading and a further six for fraud itself, making a total of 14, following a five-month trial.
He was convicted of two further offences of fraudulent trading, leading to additional sentences of seven and eight years, to run concurrently with the first two.
His appeal against sentence was rejected in 2023, while last year David Kennedy, an investment manager at the heart of the fraud, was jailed for eight years for fraudulent trading.
Paul Raudnitz KC, prosecuting, told the court last week that the £1.1m would be available to compensate Axiom investors.
The Serious Fraud Office said its investigation into Mr Schools’ assets was continuing.
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