Lawyers Timothy Schools, 61, Richard Emmett, 48, together with David Kennedy, 69, ran a scheme financing loans to law firms in 'no win no fee' cases, jurors at Southwark Crown Court were told.
More than 500 investors sank cash into the The Axiom Legal Financing Fund scheme which claimed to insure lenders against unfinished cases or solicitors going bankrupt, it was said.
Marketing material for the fund boasted that their cash would be held in the Cayman Islands and forwarded to an 'independent panel' of legal firms who would pay it back with 15 per cent interest.
Cayman Islands law prevents us from knowing who all the investors are.Prosecutor Miranda Moore QC
Former advice firm director Connie Rodrigues, who helped set up Noble, one of Schools’ companies, told jurors she struggled to carry out due diligence on the investments being proposed.
"We would ask to look at any contract or details of that investment. We wouldn’t say if it was a good investment or a bad one.
"If a client said 'I’m not giving you anything', then we could have done something.
"If they were investing in a red-listed country for example, we would tell them we can’t [invest].’
Rodrigues said she tried to secure an investment worth £3mn from Provartis Fund, and named a financial manager, Rachel Hutson, stating in court that Hutson was ‘very keen’ on this.
This attempt to secure the investment was through a company called Bracewell Law, the court heard.
"I remember in particular it was very uncomfortable and it was late in the evening and I received many calls. This made me feel uncomfortable because I didn’t know what this investment was.
"There was some pressure from Rachel to just get it done, get it signed", she told the court.
Jurors have heard how marketing material for Axiom boasted that investors' cash would be held in the Cayman Islands and forwarded to an 'independent panel' of legal firms who would pay it back with 15 per cent interest.
Earlier, Miranda Moore, QC, prosecuting, told the court: "It convinced a lot of investors. It was very popular and over £100mn was invested by individuals. People [were] investing their savings, their pension pots.
"As it happens, Cayman Islands law prevents us from knowing who all the investors are, but you will be hearing from some of them about what they thought of the fund when they read the material and what they lost."