The former wife of a crooked lawyer who carried out a ‘breathtaking’ £146m fraud has had £1.1million seized from the sale of her luxury Lake District home using an Unexplained Wealth Order amid claims it was bought with criminal proceeds.
Cumbria-based solicitor Timothy Schools raked in millions of pounds from his victims, pocketing cash invested into his Cayman Islands-registered Axiom Legal Financing Fund.
But by the time he was caught the proceeds had vanished, with the prosecution ‘unable to identify any bank balance in his name in excess of about £50.’
Now the Serious Fraud Office (SFO) has secured £1.1million from his former wife Claire using an Unexplained Wealth Order (UWO) after investigators traced fraudulently obtained funds to the purchase of the five-bed Hope Springs House, in Matterdale, Penrith.
The sprawling home, which includes a two-bedroom lodge and spectacular views of Lakeland Fells, was purchased using money from School’s former husband’s multi-million-pound investment scheme fraud, which involved no win, no fee law firms.
Schools was jailed for 14 years in August 2022 after being convicted of three offences of fraudulent trading, one offence of fraud by abuse of position, and one offence of transferring criminal property at Southwark Crown Court.
A confiscation order of just £1,083,67.38 – representing ‘tainted gifts’ to others – with five years’ extra jail time in default was made in January this year, leaving almost all of the swindled millions unaccounted for.
The Serious Fraud Office obtained a UWO earlier this year in an effort to ‘investigate this serious shortfall and identify any other assets that might have been obtained through Mr Schools’ unlawful conduct’.
Claire Schools, the former wife of crooked lawyer Timothy Schools, who carried out a ‘breathtaking’ £146m fraud, has had £1.1million seized from her recently-sold luxury home
Investigators found Hope Springs House, in Matterdale, Penrith, was purchased and renovated with fraudulently-obtained cash
Schools used the illicit money to fund a luxury lifestyle including the purchase of a motor boat, luxury cars and a £5million fishing and shooting estate in the Lake District (above)
This included having been given permission to probe his ex-wife Claire, with a view to seizing the proceeds of the sale of her Lake District home.
The application was backed by a witness statement from a SFO financial investigator, Ian Price, who highlighted suspicions Mr and Ms Schools are ‘still in a romantic relationship, or at the very least that they remain close and in regular contact.’
The two had lived together until his conviction in 2022 and there was evidence that she ‘regularly visits and talks daily to her former husband in prison’.
She is also listed on prison records as his next of kin, his common law wife and his partner.
Ms Schools married the fraudster at a lavish champagne reception at a luxury ski hotel in the French Alps in March 2011 and the pair separated in 2016, before finally divorcing in 2020.
During his subsequent trial at Southwark Crown Court, a jury heard investors were told their loans would be given to high quality law firms to fund legal cases with good chances of success.
But most of the funds were paid to just three law firms, all of which Schools either owned or held undisclosed interest in.
He paid himself over £1m in salary, consultancy fees and other personal benefits, with monies also transferred offshore.
Schools, of Sedbergh, Cumbria, told his victims their loans would be given to high quality law firms to fund legal cases with good chances of success. But most of the funds were paid to just three law firms, all of which Schools either owned or held an undisclosed interest in
Timothy Schools, 65, was jailed for 14 years in August 2022 for pocketing cash invested into Cayman Islands-registered Axiom Legal Financing Fund
Schools pictured with his ex-wife Claire at their wedding in the French Alps in 2011
The cases Axiom funded were not independently vetted, often failed at court and case insurance policies failed to pay out when cases did not succeed, according to the SFO.
Schools covered up these failures by arranging for the repayments of old loans with new Axiom loans, giving the false impression to directors, administrators and auditors that law firms were successfully repaying their loans and achieving returns on investment.
The case marks the first time the SFO has successfully used a UWO, becoming only the second law enforcement authority to do so after the National Crime Agency.
Zamira Hajiyeva became the first person to have a UWO implemented against her in 2020 after her banker husband was jailed for fraud in their native Azerbaijan.
Mrs Hajiyeva was ordered to explain how she had become wealthy enough to blow £16million in Harrods, as well as purchase a £15million home in Knightsbridge, west London. and a golf course in Berkshire.
She subsequently lost both properties after her case reached the Court of Appeal.
The SFO’s investigation into Timothy Schools’ assets is ongoing with the next hearing scheduled for 26 September at City of London Magistrates’ Court.
Nick Ephgrave QPM, Director of the Serious Fraud Office, said: ‘We will use all the tools at our disposal to recover proceeds of crime from those associates and family members who seek to benefit from the criminal activity of others.
Schools was convicted on five counts of fraudulent trading, fraud by abuse of position and money laundering
Southwark Crown Court heard that Schools paid himself over £1m in salary, consultancy fees and other personal benefits, with monies also transferred offshore
‘Unexplained wealth orders offer investigative opportunities to pursue assets on behalf of victims and taxpayers.
‘This is our first successful use of this legislation and it certainly won’t be the last.’
Solicitor General Ellie Reeves said: ‘Fraud is a pernicious crime. It hurts individuals and businesses, and harms business confidence.
‘I welcome the SFO’s successful recovery of more than £1 million from a convicted fraudster – one of the first law enforcement bodies to use such powers. This is money that will go straight back to the public purse and deny a prolific fraudster’s family benefiting from his criminal activities.’
