Fallon: Six-month trial
An experienced solicitor has been jailed for his part in helping to run one of two bogus investment schemes – the second involving litigation funding – that conned over 150 victims out of £6m.
Mark Fallon, 60, of Rossendale, Lancashire, was found guilty of conspiracy to defraud and money laundering following a six-month trial at Southwark Crown Court and sentenced to four years and six months in prison.
David Clarkson, 70, of Blackburn, described by City of London Police as “the shadow director and mastermind behind the operation”, was jailed for seven years and six months in prison, having pleaded guilty to all charges, including conspiracy to defraud, money laundering and perverting the course of justice.
More than £2m of the stolen money has been returned to victims.
The police launched a money laundering investigation in August 2016 after receiving information that large and unusual payments had been made by a company named Sable International Ltd to a newly incorporated law firm.
Sable, which advertised as investing in distressed property, launched a £3.5m corporate bond scheme offering attractive fixed interest returns of 7%.
In 2019, Mr Fallon was fined £25,000 by the Solicitors Disciplinary Tribunal after admitting that he submitted an application for firm authorisation to the Solicitors Regulation Authority (SRA) in May 2016 concealed that he had received over £1m in funding from Sable to finance Mr Finch, an employment law firm.
He also admitted allowing the firm to become involved in a funding arrangement “which the bore the hallmarks of a dubious investment scheme”.
Before setting up Mr Finch, he had been a defendant personal injury lawyer at Irwin Mitchell and then chief operating officer at Lancashire firm Lance Mason. Until April this year, he was a director of unregulated business legal services firm SYB2 in Rossendale, which he founded in 2021.
Following initial enquiries, detectives discovered that Mr Clarkson and his accomplice Lillian Milner, with the fund-raising of Anthony Flaton, were the driving force behind Sable’s fraudulent activity and linked to an earlier scheme, Equitable Law Capital (ELC), registered in Lancashire.
ELC was an investment company that specialised in litigation funding, with investors promised high fixed interest returns. Mr Fallon was not involved in this.
City of London Police said: “Little did investors know the companies were generating zero returns on claims funding and instead their money was used to repay other investors and shared among the fraudsters to fund their lavish lifestyles.”
The court heard how the trio used internet advertising, telesales and misleading company brochures to market the schemes.
“They used high pressure sales techniques to coerce hundreds of victims into investing large amounts of money into the two companies. Initial investors were persistently pursued and encouraged to invest more or offered alternative schemes.
“To gain the trust of their victims, they promoted an insurance policy and mis-represented association with FCA-regulated companies to dupe investors into believing the schemes were legitimate and low-risk.”
Ms Milner’s partner, Graham, and Ms Clarkson’s son, Paul, were appointed directors of ELC despite having no experience. They were both involved in laundering the proceeds of the fraud.
When ELC began to fail, they set up the new company, Sable, to raise more money.
Mr Clarkson used a front company based in the Seychelles and Switzerland to launder the funds stolen from both schemes, while Mr Fallon and Ms Milner “used a newly incorporated and regulated law firm to launder funds from the Sable scheme”.
Illicit commissions were also paid to an offshore account in Mauritius for the benefit of Mr Flaton.
Both ELC and Sable entered administration and voluntary liquidation at the end of 2016. They owed over £4m between them.
The victims, a number of whom were elderly and/or vulnerable, lost life-changing sums of money. One described how she was “hounded” into parting with her money, while others claimed to have been befriended by those involved.
Detective Constable Jay Smith from City of London Police’s specialist operations team, said: “These fraudsters stole life savings from hundreds, abusing their trusted positions out of pure greed.
“Clarkson, in particular, showed no remorse – cloning a regulated insurer and impersonating the broker to trick victims and later forging medical documents to avoid trial. Faced with overwhelming evidence, he eventually pleaded guilty.”
An SRA spokesman said: “We have been awaiting the conclusion of the criminal trial. Now that it has finished, we will collate all relevant information before deciding on next steps.”
Also convicted and sentenced were:
- Lillian Milner, 57, of Rossendale, Lancashire, found guilty of conspiracy to defraud and money laundering and sentenced to five years and six months in prison.
- Anthony Flaton, 39, of Winchfield, Hampshire, found guilty of conspiracy to defraud and money laundering and sentenced to five years in prison.
- Graham Milner, 55, of Rossendale, Lancashire, found guilty of money laundering and sentenced to three years and six months in prison.
- Paul Clarkson, 46, of Clitheroe, Lancashire, found guilty of money laundering and sentenced to 20 months in prison, suspended for two years. He must also carry out 180 hours of unpaid work.
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