Schools: SFO said he was still in close contact with ex-wife
The Serious Fraud Office (SFO) has secured £1.1m from the sale of a Lake District house following the first unexplained wealth order (UWO), issued against the ex-wife of the struck-off solicitor behind the Axiom Legal Financing Fund fraud.
The house in Penrith, called ‘Hope Springs House’, which includes a two-bedroom lodge and views of Lakeland Fells, was purchased using money from Claire Schools’ former husband’s massive fraud.
The SFO announced in January that it had obtained the order against Ms Schools but Mr Justice Pepperall only gave his reasons for doing so in May.
The Cayman Islands-based fund – which lent money to law firms to pay for disbursements, mainly for personal injury cases which were said to have a high chance of success – 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.
The SFO investigation uncovered that investor money was used to fund thousands of high-risk cases, that were not independently vetted and often failed at court. Few investors ever received any return.
Mr Schools was struck off in 2014, although the charges did not relate to the Axiom fund, and was jailed in 2022 for 14 years over the fraud. More than 500 investors sank cash into the fund.
A confiscation hearing at the Crown Court earlier this year found that Mr Schools’ benefit from his general criminal conduct was over £146m but determined that the available amount that could be confiscated was just £1.1m. This was from money transferred to others, mainly family members.
Ms Schools married Tim Schools in 2011. A decree nisi was issued in June 2016, although the decree absolute was only pronounced in October 2020.
For the UWO, the SFO asserted that there was reason to believe the couple were still “in a romantic relationship, or at the very least that they remain close and in regular contact” – they lived together at Hope Springs House until his conviction, while there was evidence she regularly visited and talked daily to him in prison.
The ruling recorded that Ms Schools was listed on the prison’s records as his next of kin, his common law wife and his partner.
It is not alleged that she was herself involved in his criminal activity but the SFO’s investigations found that – aside from £230,000 in dividends from UK companies declared in 2009/10 and 2010/11 – she has declared “minimal income” since 2009/10.
Nonetheless, she purchased Hope Springs House for £430,000 in September 2018. The SFO said it was primarily funded from the proceeds of sale of a chalet in France which in turn had been bought by payments from companies instrumental in the fraud.
The house subsequently underwent extensive renovation to the point where it is worth £1.8m. A key aim of the UWO was to understand how Ms Schools afforded the £740,000 she spent on it.
The SFO’s investigation into Mr Schools’ assets is ongoing with the next hearing scheduled for 26 September at City of London Magistrates’ Court.
Nick Ephgrave, director of the Serious Fraud Office, said: “We will use all the tools at our disposal to recover proceeds of crime from those associates and family members who seek to benefit from the criminal activity of others.
“Unexplained wealth orders offer investigative opportunities to pursue assets on behalf of victims and taxpayers. This is our first successful use of this legislation and it certainly won’t be the last.”
Solicitor General Ellie Reeves added: “I welcome the SFO’s successful recovery of more than £1m from a convicted fraudster – one of the first law enforcement bodies to use such powers. This is money that will go straight back to the public purse and deny a prolific fraudster’s family benefiting from his criminal activities.”
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