A bent lawyer who called his firm 'ATM' because he drew so much money out of it has been jailed for 14 years after pocketing more than £20mn of investor's cash.
Timothy Schools, 61, ran a scheme financing loans to law firms for ‘no win no fee’ cases.
Southwark Crown Court heard more than 500 investors sank more than £100mn into the The Axiom Legal Financing Fund scheme, which claimed to insure lenders against unfinished cases or solicitors going bankrupt.
All the money vanished when the firm went bust. Schools received £19.5mn from the Cayman Islands-registered fund, using some of the money to buy 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.
You are an utterly dishonest man.Judge Martin BeddoeSchools owned Preston firm ATM Solicitors, given its name because he used it as ‘his personal cash machine’, Southwark Crown Court heard.
The solicitor, of Sedbergh, Cumbria, denied but was convicted of three counts of fraudulent trading, one count of fraud and one count of transferring criminal property.
Sentencing him, Judge Martin Beddoe told him: "There never has been in the 12 years since the collapse of Axiom an admission or demonstration of remorse.
"Any such expressions of regret have in my judgment been insincere and disingenuous. You are an utterly dishonest man.
"I have no doubt that you always saw this as a get-rich-quick scheme."
Judge Beddoe said Schools deceived investors "either by untruths or misdirection to be able to cream off as much as you could".
"You could dishonestly slice off chunks to spend so indulgently as you did. You personally pocketed £20mn for the most part you squirrelled offshore."
Prosecutor Paul Raudnitz QC said 35,000 clients were affected and "thousands of clients of many firms" lost millions.
He said: "The overall figure of investor money amounts to £107mn. Only 6.8mn was returned to the fund so a net loss was something in the region of £100,536,000.
"Litigating the matter has resulted in no meaningful return to the investors."
He added: "The very first investment had money siphoned off for School’s benefit. If that’s not a fraud from the outset then I don’t know what is."
Litigating the matter has resulted in no meaningful return to the investors.Prosecutor Paul Raudnitz QCAxiom’s marketing material claimed investors’ cash would be held in the Cayman Islands and forwarded to an ‘independent panel’ of law firms who would pay it back with 15 per cent interest.
Miranda Moore, QC, who prosecuted in the trial said many investors were persuaded to part with their life savings.
"It was very popular and over £100mn was invested by individuals. People were investing their savings, their pension pots."
But Schools only loaned money to a very limited number of firms.
"In reality, from 2008 until December 2011 there was no genuine independent panel of law firms getting these loans. It was just Schools’ firms," the prosecutor said.
"Funds like this don’t run without reports being sent back to independent directors and they were being sent, saying solicitors were winning cases, so the fund grew."
The company collapsed in August 2012 after it featured in an article in 'Offshore Alert', taking most of the investor’s cash with it.
"Although £25mn was retraced, the costs incurred in all the litigation and tracing meant that of all the money, only £1mn was recovered. So the investors effectively lost everything", the prosecutor said.
Schools was struck off as a solicitor back in 2014 for misconduct.
Before he became involved in Axiom, he ran a Lancaster-based personal injury firm called Life Repair Group, previously called The Compensation Group, when it collapsed in 2003.
The jury reached a verdict on Schools after 28 hours' deliberation.
Schools, of Sedbergh, Cumbria, denied three counts of fraudulent trading, one count of fraud and one count of transferring criminal property but was found guilty by a unanimous jury verdict.
He was sentenced to a total of 14 years in prison and disqualified from being a company director for 15 years. Schools appeared shell-shocked as the sentence was announced and he was led to the cells.
Lisa Osofsky, director, Serious Fraud Office, said: "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."
Eddie Beaver is based at Southwark Crown Court
