(CMR) Timothy Schools (61), the investment manager of a collapsed 100-million-pound (US$121 million) Cayman Islands-based legal financing fund was on Wednesday convicted of fraud. After deliberating for more than 28 hours, a London jury found Schools guilty of fraudulent trading, fraud by abuse of position, and money laundering.
According to Reuters, the UK Serious Fraud Office (SFO) said the former lawyer who founded Axiom Legal Financing Fund in 2009 to provide loans to law firms pursuing no-win-no fee lawsuits siphoned off nearly 20 million pounds of investor money to buy luxury properties and cars.
The Axiom fund was an unregulated collective investment scheme that secured over 100 million pounds from around 500 investors. They were told a panel of quality law firms would use their funds to back legal cases with a high chance of success. But tens of millions of pounds were paid to three law firms that Schools either owned or held an interest in, the SFO said.
Jurors heard that Schools diverted 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-pound fishing and shooting estate in Britain.
Lawsuits funded by Axiom were often lost at court, and insurance policies failed to cover losses, Reuters reported.
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 call a retrial. A third co-defendant, former lawyer Richard Emmett, was acquitted.
Schools is in custody and is expected to be sentenced on Thursday.