Axiom founder loses appeal over 14-year fraud sentence
Timothy Schools, the struck-off solicitor jailed for 14 years last summer for pocketing at least £20m from the Axiom Legal Financing Fund, has failed in a bid to reduce his sentence.
Lord Justice William Davis said the offences Mr Schools committed “involved almost every high culpability factor” within the fraud guidelines and the loss to the fund was “100 times” the £1m guideline figure for the most serious types of fraud.
Describing Mr Schools as an “utterly dishonest man”, Judge Martin Beddoe sentenced him to eight years in prison for fraudulent trading and a further six for fraud itself, making a total of 14, following a five-month trial at Southwark Crown Court.
He was convicted of two further offences of fraudulent trading, leading to additional sentences of seven and eight years, to run concurrently with the first two.
Counsel for Mr Schools, Nathaniel Rudolf KC, argued at the Court of Appeal that Judge Beddoe erred in imposing consecutive, rather than concurrent, sentences on the first two counts.
He submitted that the judge should not have imposed an overall sentence which “circumvented the statutory maximum” of 10 years for the individual offences.
William Davis LJ said the court rejected the argument that the first two offences committed by Mr Schools “arose out of the same incident or facts”.
The judge said the first count related to “fraudulent activity up to the beginning of 2012” as committed “via a particular corporate entity based in this jurisdiction”, The Synergy Solution Ltd, which acted as an investment manager for Axiom until the start of 2012.
Synergy was a UK company through which Mr Schools invested over £60m, operating the firm dishonestly “to enrich himself to the detriment of investors in the Axiom fund”.
William Davis LJ said the victims of Synergy’s fraudulent trading were predominantly based in England and Wales.
The second count of fraud “concerned fraudulent conduct commencing in the early part of 2012 and continuing until the collapse of the Axiom fund”, involving the use of a corporate entity incorporated in the Cayman Islands.
This was TIM Ltd, which Mr Schools used as investment manager from 2012 onwards.
William Davis LJ said: “The offence was charged as fraud because the corporate entity was a Cayman registered company. Thus it was not subject to the regime of the Companies Act 2006 and the offence of fraudulent trading.
“The nature of the offending was the same, though the solicitors involved now were firms in which the appellant had an undisclosed interest rather than a firm controlled directly by him. In addition, the target in terms of investors was in the Far East and Australasia rather than the United Kingdom.
“The total involved in count 2 was in excess of £46m, that sum being invested over a period of little more than six months.”
The lord justice said it was not necessary for the purposes of the appeal to consider counts 3 or 4, which related to fraudulent trading by law firms controlled by Mr Schools.
Although there “may have been overlap of victims” between the first two counts of fraudulent trading and fraud, “to a large degree” the victims were not the same, and it followed that the judge was entitled to impose consecutive sentences.
On the further question of whether the total sentence of 14 years was “just and proportionate”, the judge said the offences committed by Mr Schools “involved almost every high culpability factor” within the relevant sentencing guideline.
“The overall loss to the fund over the two frauds was 100 times the figure used in the guideline for the most serious type of fraud.
“Very serious financial harm was caused to many thousands of investors and those who advised them. The appellant’s personal gain from the offending as a whole was in the region of £20m.
“Nothing in those uncontested objective circumstances suggests that the judge’s assessment was wrong.”
Mrs Justice Cockerill and His Honour Judge Timothy Spencer contributed to the judgment.