LONDON (Reuters) – An investment manager at a Cayman Islands-based 100 million pound ($121 million) legal finance fund was convicted by a London jury on Wednesday of fraudulent trading, fraud by abuse of position and money laundering.
Timothy Schools, a 61-year-old former lawyer who founded Axiom Legal Financing Fund in 2009 to provide loans to law firms pursuing lawsuits without gain or expense, embezzled nearly £20million of money from investors to buying luxury properties and cars, the UK’s Serious Fraud Office (SFO) said in a statement.
His attorney, David Hanman of Cobleys Solicitors, said he would not comment until his sentencing on Thursday.
The jury at London’s Southwark Crown Court failed to reach a verdict for a second defendant, former independent financial adviser David Kennedy. The SFO has 21 days to decide whether to open a new trial. His attorney was not immediately available for comment.
A third co-defendant, former attorney Richard Emmett, was acquitted.
“It’s incredibly awful that your reputation is in question,” Emmett said in a statement. “I now wish to continue my life and my career, which this unfounded prosecution by the SFO has put on hold.”
The Axiom fund was an unregulated collective investment scheme that secured over £100m from around 500 investors, who were told a panel of quality law firms would use their funds to support legal cases with great chances of success.
But tens of millions of pounds were paid to three law firms that the schools owned or had a stake in, the SFO said.
He embezzled more than 19.6 million pounds ($23.76 million) into offshore bank accounts, buying shares in a ski hotel in France and a £5 million fishing and shooting estate in Grande Britain, he said in the statement.
Lawsuits funded by Axiom, meanwhile, have often been lost in court, and insurance policies have failed to cover the losses.
Schools covered failures by arranging repayment of old loans with new Axiom loans, the SFO said.
(Reporting by Kirstin Ridley; Editing by Emelia Sithole-Matarise)
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