LONDON, Jan 16 (Reuters) - Two businessmen have been found guilty in London of defrauding banks of hundreds of millions of pounds to fund a lavish lifestyle and build a commercial property empire, in their second conviction for deception and forgery in 18 years.
London-based Achilleas Kallakis and Alexander Williams, both aged 44, persuaded Allied Irish Banks to lend them 740 million pounds ($1.2 billion) by using forged documents and fake property guarantees between 2003 and 2008, the Serious Fraud Office (SFO) said on Wednesday.
The loans enabled Kallakis to build a 16-property portfolio.
The fraud, which included an agreement from HBOS, now part of Lloyds, included a multi-million euro loan Kallakis said was to convert a passenger ferry into a super-yacht. Around six million euros of that loan was advanced.
A third person, Swiss lawyer Michael Becker, was director of companies involved in the loan agreements and was closely involved in the fraud, the SFO said in a statement. He was not charged as he lives abroad and is outside the SFO’s jurisdiction.
The jury, which returned unanimous verdicts on two counts of conspiracy to defraud, were told Kallakis maintained a fleet of chauffeur driven Bentleys, a private jet, a private helicopter, a luxury yacht moored in Monaco and high value art.
Kallakis and Williams, an expert forger, have been remanded in custody awaiting sentencing on Thursday.
The two men, who changed their names after being convicted in 1995 of selling bogus honorary titles mainly to Americans, operated out of an office in London’s plush Mayfair district as the Pacific Group of Companies.
They pretended a respected Hong Kong company, Sun Hung Kai Properties (SHKP), was guaranteeing long-term, top rents for commercial properties. This inflated the price of the properties to 60 million pounds above their cost, the SFO said.
They also provided false guarantees from a company called Oregon Finance Corp, which Kallakis said was a billion-dollar ship-owner belonging to his family trust. Oregon Finance, however, had millions of pounds of liabilities and no assets.
During 2007 and 2008, Kallakis agreed a 29 million euro HBOS loan for the boat conversion. He provided the bank with documents that included a death certificate of his mother in which her surname was altered to hide Kallakis’s name change.
But by August 2008, AIB discovered that Kallakis had a previous fraud conviction in the name of Stefanos Kollakis. They contacted Hong Kong’s SHKP, which confirmed they had not offered Kallakis any rent guarantees.
A police investigation began in January 2009 and the men were charged in February 2010.