Accused, who remains in custody, is expected to be sentenced today

Durrant Pate/Contributor

The investment manager of a collapsed £100 million (US$121 million) Cayman Islands-based legal financing fund, 61-year-old Timothy Schools, was yesterday convicted of fraud in London.

The jury returned with a conviction having found Schools guilty of fraudulent trading, fraud by abuse of position, and money laundering after deliberating for more than 28 hours.

However, the jury at London’s Southwark Crown Court failed to reach a verdict for a second defendant, former independent financial adviser David Kennedy.

The United Kingdom Serious Fraud Office (SFO) has 21 days to decide whether to call a retrial. A third co-defendant, former lawyer, Richard Emmett was acquitted.

SFO evidence presented in court

The SFO led evidence that Schools, a former lawyer, who founded Axiom Legal Financing Fund in 2009, siphoned off nearly £20 million of investor money to buy luxury properties and cars.

The Axiom Fund was an unregulated collective investment scheme that secured over £100 million from around 500 investors provided loans to law firms pursuing no-win-no fee lawsuits. The jury heard that a panel of quality law firms would use their funds to back legal cases with a high chance of success.

According to the SFO, tens of millions of pounds were paid to three law firms that Schools either owned or held an interest in. Jurors heard that Schools diverted more than £19.6 million pounds (US$23.76 million) into offshore bank accounts, buying shares in a ski hotel in France and a £5-million fishing and shooting estate in Britain.

Lawsuits funded by Axiom were often lost at court, and insurance policies failed to cover losses, Reuters reported.