A number of IFA firms were hit by the collapse of the business and an insurance broker business failed.

The successful prosecution of the former police officer and ex-solicitor follows a major investigation and prosecution by the Serious Fraud Office (SFO).

Mr Schools, who acquired a £5m hunting and fishing estate, a motor boat and a luxury car among many expensive items, conned thousands of investors by persuading them to invest millions in his investment vehicle Axiom Legal Financing Fund which was used to fund law firms’ mostly unsuccessful ‘no win, no fee’ claims.

He was convicted by a jury on five counts of fraudulent trading, fraud by abuse of position and money laundering.

In his sentencing remarks, Judge Martin Beddoe told Mr Schools: "You are an utterly dishonest man and that characteristic of dishonesty has regrettably run through you for a very, very long time."

The Judge said that Mr Schools' fraud had hit a number of IFA firms who were "adversely affected professionally and personally" and Taylor Moor, one of the principal brokers of Axiom, went into liquidation as a result.

The judge has confirmed that confiscation orders to try and retrieve some of the money can now go ahead. 

Mr Schools was responsible for the Cayman Island-based Axiom Legal Financing Fund which raised over £100m from about 500 investors - an average of £200,000 per investor. Victims were promised a secure return on their money to lure them in.

The number of clients whose legal cases were affected by the fraud is in the range of 35,000, the SFO said.

Much of the money raised (about £40m) was paid to only three law firms: ATM, Ashton Fox and Bracewell’s. All were either owned by Mr Schools or invested in by him.

The ‘loans’ provided to the law firms were creamed off by Mr Schools who used, for example, the money received by ATM Solicitors to pay himself over £1 million in salary, consultancy fees and other personal benefits. He also employed his family too.

The cases Axiom funded were not independently vetted, often failed at court and insurance policies failed to pay out when cases did not succeed. 

Mr Schools covered up the legal funding gaps by arranging for the repayments of old loans with new Axiom loans, a technique often used in pyramid-style scams. The con gave the false impression to directors, administrators and auditors that the law firms were repaying their loans and achieving returns on investment.

The SFO investigation found that Mr Schools had dishonestly acquired over £19.6 million from the Axiom loan monies, including more than £5.7 million from audit and management fees he dishonestly added to the law firm loans. 

The monies were then hidden in offshore bank accounts held in complex overseas trusts, and used to finance a lifestyle that included shares in a luxury ski hotel in France, a motor boat, luxury cars and a £5m fishing and shooting estate in the Lake District, bought through an offshore company.

The SFO found 35 companies and bank accounts around the world being used by the company to transfer cash, including 10 companies in England, 1 in Switzerland, 2 in the Cayman Islands, 2 in the Isle of Man, 2 in Panama and 4 in the Marshall Islands.

Lisa Osofsky, director, Serious Fraud Office, said: “Mr 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.”

• The jury acquitted a second defendant, former solicitor Richard Emmett, 49, of Grimsargh, Lancashire, on all charges and was unable to reach a verdict on a single count of fraudulent trading against ex-IFA David Kennedy, 69, of Hetton-le-Hole, Tyne and Wear.