Conviction of a £100 Million Litigation Finance Fund Fraud Case

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Timothy Schools, a 61 years old former solicitor and Axiom Legal Financing Fund founder, was found guilty of all five counts against him at Southwark Crown Court for using cash from the Cayman Islands-based Axiom legal funding company to live a luxurious lifestyle.

He is reported to have the ownership of a shooting estate in the Lake District, a ski hotel, and a motor boat, which is a manifestation of his excessive and extravagant lifestyle. 

The facts of the case, reported by different news outlets, indicate that Schools set up Axiom Legal Financing company in the year 2009 to provide loans to law firms pursuing no-win-no-fee cases, and using this strategy, he built about £100 million (or 121 million dollars) from 500 investors. 

($1 = 0.8249 pounds)

When the irregularities in the business became eminent, the fund was suspended, and Schools were struck off in the year 2014. Law enforcement agencies and other relevant stakeholders had proved allegations framed against Schools, and he was convicted in August in the fraud case.

According to an SFO update, the investors who provided funding were told that their loans would be used to provide funding to a portfolio of cases that have greater probabilities of success across several firms. Later on, it was found that 40 million pounds were paid to just three firms, which were either owned by School or he held an undisclosed interest in them. 

These loans were then siphoned off to Schools, who paid himself more than 1 million pounds in salary in addition to other benefits accrued from the money. The former litigation funding solicitor earned around 19.6 million pounds from the scam, including more than 5.7 million pounds from audit and management fees he had dishonestly added to the law firm’s loan. He used this money to acquire a shooting estate in Cumbria for 5 million pounds through an offshore company and also take ownership of a luxury French ski resort.

In this case, Schools was charged and convicted on the grounds of fraudulent trading, fraud by abuse of position, and money laundering. Along with him, two other individuals, 69 years old David Kennedy from Tyne and Wear and 49 years old Richard Emmett from Lancashire, a financial advisor and solicitor, respectively, were also subjected to charges of fraud and money laundering. The jury acquitted Emmett of all charges but failed to reach any verdict for Kennedy.

Talking about the success of SFO in this case, director Lisa Osofsky is reported to have 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.” This case is the second successful prosecution concluded by SFO in two weeks. 

Formerly, the agency had also secured a conviction against David Ames, who deceived more than 8000 investors in a 226 million pounds scam. He was also held guilty on charges of fraud by abuse of position. He reportedly took funding from investors to invest in Caribbean properties which were never built, and he used the money to enrich himself. 

The successful conclusion of the fraud cases by SFO has triggered a wave in the market about possible scams and the need for comprehensive research and caution by investors before investing in any possible company. 

Litigation funding is emerging as one of the most successful marketplaces, but at the same time, some individuals may use unlawful means to enrich themselves at the expense of their hard-earned money. Therefore, it is imperative for investors to ensure transparency and legitimacy before making any decision regarding their investment.

At Baker Street Funding, we give you the inside scoop on pre-settlement funding by covering a variety of ... financing and legal topics to help you made the best financial decision for you and for your case. Our experts break down complex ideas in a way that's easy to understand so you can stay informed on current trends as well as tips and fact checked information by the CEO and founder, Daniel Digiaimo. Furthermore, Despite its name, consumer legal funding is not a loan. If you don't win your case, no payment needs to be made back. To avoid confusion and simplify matters on, we'll use the word "loan" throughout this article.

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