The Serious Fraud Office has won a £928,479 confiscation order against former IFA and investment manager David Kennedy who was involved in a £100m fraud which saw hundreds of victims cheated.

The money will be returned to victims of the fraudster who used money from his activities to fund a lifestyle including a villa in Tenerife and several luxury vehicles.

Mr Kennedy, of Tyne and Wear, was the manager of the former Axiom Legal Financing Fund which used investors money to fund legal cases.

SFO investigators said that Mr Kennedy used his criminal proceeds to fund a luxury lifestyle which included the purchase of properties in Hull and a villa in Tenerife, savings in a Spanish bank account, a pension fund and several luxury vehicles.

After a hearing at Southwark Crown Court this week, the judge decided that the recovered money should go to back to the victims.

Mr Kennedy is currently serving an eight-year prison sentence for a fraud he ran with business partner and former solicitor Timothy Schools. The pair ran a no-win, no-fee legal scheme, Axiom Legal Financing Fund, that used investor money to fund thousands of high-risk legal cases that were not independently vetted and often failed at court. The SFO successfully prosecuted him for fraudulent trading in June 2024.

This result follows recovery of £1.1 million from Mr Schools’ ex-wife, following the sale of a property in September. Mr Kennedy has three months to pay the confiscation order or risk adding up to six and a half years to his sentence.

Paul Napper, head of proceeds of crime at the SFO, said: "David Kennedy funded a lavish lifestyle with other people’s life savings and many lost everything when his scheme collapsed. Today's order is a significant step forward in addressing the impact of Kennedy’s crime on victims.”

On 3 May 2024 at Southwark Crown Court, David Kennedy was convicted after a retrial. On 7 June 2024 he was sentenced to 8 years in prison and disqualified from acting as a company director for 15 years. His co-defendant, Timothy Schools was convicted in August 2022 on all five counts: three counts of fraudulent trading contrary to Section 993(1) of the Companies Act 2006, one count of fraud, contrary to Section 1 and 4 of the Fraud Act 2006, and one count of transferring criminal property, contrary to Section 327(1)(d) of the Proceeds of Crime Act 2002.

Mr Kennedy, and his business partner, managed a Cayman Island registered company called Axiom Legal Finance Fund for over two years. The Axiom Legal Financing Fund raised over £100m from about 500 investors - an average of £200,000 per investor. Victims were falsely promised a secure return on their money. 

As Financial Planning Today reported in 2022, in addition a number of IFA firms were hit by the collapse of the business and an insurance broker business failed.

The SFO found that Mr Kennedy diverted over £5.8m from Axiom to pay for items for his own benefit including a Swiss ski resort chalet, a Tenerife villa and renovations to his home in Hull. Mr Schools, from Penrith, Cumbria, used the money to fund a luxury lifestyle, Southwark Crown Court heard. Mr Schools, who has since been struck off, was also reported to have had a boat, luxury cars and a £5m fishing and shooting estate in the Lake District.

Funds to provide the luxury lifestyle were hidden in offshore bank accounts and complex trusts.