A headteacher and her father have been found guilty of running an unregistered school.
Arshad Ali has been fined for his role as director of an unregistered school run by his daughter, Nadia Ali.
But the court adjourned sentencing of Ms Ali, 38, who was headteacher of the Ambassadors High School (pictured) in Streatham, south London, until Monday to await a report from probation.
The court heard that a school has to register with the Department for Education if it provides education to five or more children of compulsory school age full time.
Sitting at Westminster Magistrates' Court on Thursday, Judge Arbuthnot said she accepted that Mr Ali, 73, had a limited role as director of the Ambassadors High School company, and fined him and the company £100 each.
She added: "Mr Ali, obviously I accept that you are not involved in this apart from on the money side. Miss Ali, you will be back here on Monday."
The court heard that Ofsted inspectors swooped unannounced on the Ambassadors High School in June 2018. The inspectors handed Ms Ali a warning notice before visiting again in July 2018 and issuing a second warning notice.
Ofsted inspectors gave evidence that she told them there were five children registered full time at the school during the first inspection.
Prosecutors also said that on the afternoon of the second inspection, there had been five pupils there who were not listed on school register documents as due to be attending that afternoon.
An investigation into the pupils' exercise books showed that some were working on subjects they would not have studied because the lessons were timetabled for days they were not due to attend, the court heard.
When asked how reliable the school's attendance records were, Ofsted inspector John Lambern said: "It is inaccurate."
But Emma Foubister, defending, said Nadia Ali may have made a "slip of the tongue" when she told inspectors she had five children full time at the school.
She said that the fact there were five children in the school on one afternoon when they were not registered to be there was not enough evidence to convict.
She added: "We have heard evidence from Miss Ali that she knew what the limit was and that she would not have said that.
"It may well be a mistake on the part of the inspectors or it may well have been a mistake on the part of Miss Ali.
"She is sure she didn't say it because she was aware of the guidelines, but it could have been a slip of the tongue on the day."
However, Judge Arbuthnot found that Ms Ali's evidence was "unreliable" and that she had said "five" to inspectors.
While the judge accepted it could have been a slip of the tongue, she said that was not what Ms Ali had told the court in evidence.
Judge Arbuthnot said that not keeping records of pupils' attendance was a "mad way" to run a school.
She added: "There's no sign of anyone having a proper record of anything at all. It's a mad way to run a school, you can't run a school in this way."
She said: "Miss Ali's daily register, if it existed at all, was in scraps of paper which were not kept in the office but in a bag."
The judge adjourned the case until Monday.
Ofsted said the case was only the second prosecution of its kind but warned it could be just the "tip of the iceberg".
The watchdog said that in September 2018, Ambassadors High School had applied to register as an independent school, with Mr Ali named as proprietor.
Ofsted carried out a pre-registration inspection in February 2019, which identified "serious safeguarding issues" and judged that the school would not meet the Independent School Standards, it added.
However the school, which charged fees of up to £4,500 a year, remained open after failing its pre-registration inspection and continued to operate illegally, Ofsted said.
Chief inspector Amanda Spielman said: "I hope today's judgment sends a clear message to these schools that Ofsted will not waver in our efforts to bring them to justice.
"While I welcome today's verdict, I am concerned that this case is just the tip of the iceberg.
"As I have said several times over the last few years, Ofsted urgently needs stronger investigatory powers, allowing us to seize evidence and interview suspects. And we need the government to tighten the legal definition of a school. I urge them again to do so at the earliest possible opportunity."