The most common and most likely answer to this crossword clue is the 8 plus 5 letter word CRIMINAL CLASS
I've seen this crossword clue in The Daily Telegraph
C
R
I
M
I
N
A
L
C
L
A
S
S
Buddy explains!
The straight part
We know that "Fagin’s pupils were members of it" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case fagin’s pupils were members of it = criminal class.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.