"Britain's most successful serial confidence trickster, Achilleas Kallakis, faces up to 10 years in jail after being found guilty of duping banks out of more than £750m.
Kallakis and his co-fraudster, Alex Williams, will appear at Southwark crown court on Thursday to receive their sentence for orchestrating Britain's biggest ever mortgage fraud. The former Croydon travel agent tricked a series of bankers into believing he was a super-rich Mayfair property baron and convinced them to lend him millions to fund lucrative deals.
The sentencing comes almost 18 years after the two men previously stood alongside one another – at the same court – pleading guilty to a forgery scheme involving the sale of bogus manorial titles to unsuspecting Americans. Reports of these earlier convictions were not picked up by banks because Kallakis and Williams had changed their names. (AtW's comment: new plan B - fuzzy name search of convicts for banks)
Far from being deterred by their initial brush with the courts, the two set about hatching an even more elaborate scheme – this time targeting bank loans. Stephan Kollakis and Martin Lewis were reinvented as Achilleas Kallakis (with an "a") and Alex Williams.
With the help of William's forgery skills, and an allegedly corrupt Swiss lawyer, Kallakis quickly had a handful of banks financing a string of trophy property acquisitions between 2003 and 2008.
Using his helicopter and private jet to shuttle between offices in Mayfair and a super-yacht in Monaco, Kallakis appeared to have all the trappings of a successful tycoon. He was well known too on the casino circuit, gambling large sums on backgammon and poker.
With loan financing often higher than the value of properties he targeted, Kallakis snapped up some of the most sought-after houses in Mayfair and Knightsbridge as well as landmark commercial properties such as Home Office buildings in Croydon and the Telegraph Media Group's headquarters in Victoria, acquired from the Barclay brothers.
But to keep up the sham, Kallakis and his inner circle had to work tirelessly, deploying actors, secretive offshore trusts, fictional backing from an overseas shipping empire and string of bogus references, to stay one step ahead of suspicion.
Cursory checks would have guided the curious to entries In Debrett's or Marquis Who's Who, where readers can still see Kallakis listed as an "ambassador for the Republic of San Marino", author of The Wonders of Italy (1996) and a member of the development board of the National Portrait Gallery – all bogus claims.
Kallakis and his helpers were able to conceal the truth for more than five years, wining and dining gullible bankers. The biggest victim of Kallakis had been AIB, which had advanced in excess of £700m and ultimately reported a £56m loss on the deals. A second count was tied to a loan from Bank of Scotland, now part of Lloyds Banking Group.
Other lenders who were taken in included Barclays, Bristol & West and GE Capital. HMRC was also duped. Tax officials conducted an inquiry into Kallakis's affairs in 2005, but was eventually satisfied that all the paperwork relating to his complex offshore empire appeared to be in order.
The conviction brings to an end a lengthy prosecution brought by the Serious Fraud Office, which saw an initial attempt to try Kallakis thwarted when his co-defendant, Williams, attempted suicide. The first trial was also marred by a suspected attempt to nobble the jury, which is still the subject of a police inquiry.
At the heart of the Kallakis confidence trick were purported financial guarantees from a large Hong Kong investor. The only catch, banks were told, was that the guarantees would fall apart if the investor – Sun Hung Kai Properties (SHKP) – was contacted directly. (AtW's comment:
- if he told me that I'd be on the phone with SHKP in 5 mins)This explanation was accepted by the bankers who were desperate to lend to Mayfair tycoons such as Kallakis. Years later, however, they were to learn the SHKP paperwork had been forged by Williams. Those who had sought to question the rationale for SHKP's guarantees were subjected to angry tirades of abuse.
Nevertheless, there were some within AIB who had their doubts and it was not until the bankers started making arrangements to fly to Hong Kong and seek a meeting directly with SHKP that Kallakis agreed he would broker some contact.
Jonathan Lee cut an impressive figure to the two men from AIB's property team in March 2007. A director in the treasury department from an Asian property giant – SHKP – he had agreed to stop off, on his way to Hong Kong from New York, for the brief meeting at Kallakis's Mayfair offices.
Lee impressed the two bankers although, in retrospect, they found it strange that he had no business cards. The SHKP man appeared to have a good knowledge of Kallakis's loans and asked informed questions. It was the comfort they craved. Any doubts about the financial guarantee's underpinning Kallakis's property empire had been well and truly put to bed.
As they later discovered, however, SHKP never employed a "Jonathan Lee". It did not even have a treasury department. It had never been involved in rental guarantees. And SHKP bosses AIB believed had signed the paperwork had never heard of Achilleas Kallakis.
When fraud investigators tried to track him down over a year later they found no trace. The only clues were two files on the private computer server of Williams, titled "List of Common Chinese Names" and "Background info for J Lee". When the net was finally closing in 2008, Williams ordered the server be destroyed – but the command was never carried out.
AIB felt they had little reason to doubt Kallakis. (AtW's comment:
) They had been overwhelmed with bogus references from sources ranging from Credit Suisse to the economist Lord Harris of High Cross, all purporting to confirm the credentials of Kallakis. But in evidence Harris's widow said she knew nothing of the family friendship Kallakis claimed.In his defence, Kallakis expressed incredulity at evidence of forgery and clung desperately to claims that his connections to establishment figures were genuine. His lawyers showed the jury a picture of the fraudster with Lady Thatcher that had appeared in a magazine produced by the American Chamber of Commerce in the UK.
Kallakis had an altogether more ordinary background. His father worked as a port captain and ran an unsuccessful Liverpool nightclub. Educated at University of Buckingham, where he met Williams, Kallakis went on to work in a travel agency while living with his parents in Ealing.
Williams was very much the back-office boy who said little and would occasionally eat a Pot Noodle at his desk, according to colleagues. Asked to explain his use of false passports in the 1990s – for which he was convicted – Williams explained they had been for a girlfriend who could not return to China.
The two went into business after college in various ventures, including looking at the purchase of a lobster farm. His outward demeanour at court was calm, but he claims to have received death threats against his family once the allegations of fraud emerged.
On one occasion he said he put his wife and daughter on a plane to the Philippines, fearing for their safety. The jury were not told that he had attempted to take his own life during the first trial.
The undoing of Kallakis's scam came in 2008 when AIB had sought to sell on some of its loans to other banks to spread the risk. One of those it approached, the German bank Helaba, conducted some checks into the property tycoon's background and hired a private investigator who quickly began to peel back the fraudulent facade. They took their findings to horrified counterparts at AIB just as they were invited by Kallakis to his lavish 40th birthday party in Mykonos"
Source: Confidence trickster who defrauded banks out of £750m faces jail | UK news | The Guardian
Only 10 years for £750 mln fraud?!?!?!
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