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Mayfair property fraudsters stole millions from banks

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  • 16/01/2013
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Mayfair property fraudsters stole millions from banks
Two London businessmen have been found guilty of defrauding millions of pounds from Allied Irish and Bank of Scotland among other UK banks today at Southwark Crown Court.

Achilleas Michaelis Kallakis and Alexander Martin Williams have been convicted for deception and forgery and remanded in custody for sentencing tomorrow on the 17 January.

The £740m mainly commercial property transaction frauds, for which a confiscation order is being prepared, also included a yacht conversion representing a loan agreement of €26m.

A third person, Michael Becker,a lawyer and Swiss businessman is also alleged to have been involved and was director of companies presented to the banks in the loan agreements as “borrowing companies”.

However, he has not been charged due to his absence from this legal jurisdiction.

During the trial the jury were told that Kallakis used the proceeds of his fraud to fund the lifestyle of the super-rich in which he maintained a fleet of chauffeur driven Bentleys, a private plane, a private helicopter, a luxury yacht moored in Monaco harbour and a collection of high value art works.

The defendants, operating out of a Mayfair office as the Pacific Group of Companies, managed to build up a 16-property portfolio between 2003 to 2008.

The fraudsters continuously exaggerated the purchase price of the deals by offering the bank guarantees of long-term rental agreements at top market rates from a company in Hong Kong called Sun Hung Kai Properties.

The Serious Fraud Office said SHKP are a large, well established Hong Kong property company with a high credit rating and the guarantees therefore had the effect of increasing the value of the properties substantially.

But in reality, SHKP had not entered into any guarantees and had no knowledge of the transactions or the purported subsidiary companies that had entered into them. The SHKP documents provided by Kallakis and Williams to AIB were forgeries and the reverse premiums were channelled into the pockets of the fraudsters.

The loans advanced by AIB represented £60m more than the value of the properties, but the game was up in 2008 when AIB learnt Kallakis had a previous fraud conviction in the name of Stefanos Michalis Kollakis and had subsequently changed his name.

During 2007 and 2008, Bank of Scotland agreed a loan of €29m to convert a passenger ferry into a super yacht for Kallakis’ personal use.

The duo provided several forged and worthless guarantees to the bank, including a death certificate of Kallakis’s mother in which her surname had been altered to hide Kallakis’s name change. The ferry turned out to be valueless and contaminated with asbestos and no longer water tight. By the time suspicions were raised, the bank had advanced only a proportion of the loan at €5.7m.

The suspected fraud was reported to the SFO in January 2009 and due to a variety of delays, including a retrial, the jury returned unanimous verdicts on two counts of conspiracy to defraud today. One count related to Allied Irish Banks and the other to Bank of Scotland.

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