AIB 'duped' into loans of £800m for properties
ALLIED IRISH BANK was duped into lending nearly £800 million to two British alleged fraudsters to buy 16 commercial properties in Britain at the height of the property boom on the back of forged documentation, a London court was told yesterday.
Achilleas Kallakis and his co- defendant Alexander Williams face 23 charges of fraud in the retrial, which began in Southwark Crown Court in London yesterday and could last for several months.
Opening the prosecution, Victor Temple QC said the pair had used forged letters purporting to be from a Hong Kong-based property firm and Swiss bank, Credit Suisse to con AIB, and, before it, Bristol & West building society.
Sixteen times AIB gave loans worth more than the buildings to be bought on the back of a forged letter from Hong Kong firm SHKP – which was not checked out directly – that it would cover all gaps in rental income, leaving a £77 million surplus that was enjoyed by the conspirators, Mr Temple said.
The Irish bank had been “keen to develop commercial property interests” when London-based bank executives were introduced in 2003 to Mr Kallakis, who claimed to be a wealthy scion of a Greek shipping family.
Despite his claims of family wealth, Mr Kallakis’s background was “modest”, Mr Temple said. His real family name was Kollakis, not Kallakis. “His father worked as a port captain and at one point ran an unsuccessful nightclub in Liverpool.”
Mr Kallakis and Mr Williams used the same tactics to convince AIB as they had earlier with Bristol and West, including a forged letter purporting to be from Credit Suisse, which asserted that Mr Kallakiss’ company, Oregon Finance was extremely wealthy.
The letter, written on notepaper forged by a north London printer, claimed that Oregon had $410 million cash on hand, outstanding loans of $118 million and was worth nearly $800 million. When it was put into liquidation by AIB, it was worthless.
Unusually, the jury heard of past convictions. In February 1993, Mr Williams, then known as Martin Lewis, pleaded guilty to three offences of obtaining a passport by deception – by using the identity of a dead person – and a separate charge of attempting to to obtain a passport by deception.
In April 1995, both Mr Kallakis, who was then known by his proper family name, and Mr Williams pleaded guilty to charges of conspiracy to commit forgery when they were caught selling “bogus titles to unsuspecting Americans”.
Later, Mr Temple claimed that Mr Kallakis had forged a copy of the death certificate of his mother, Erinoula Kollakis, to cover the fact that he had changed his surname, lest it offer warning to potential business partners.
Mr Kallakis was “confident, assertive and occasionally arrogant”, Mr Temple said. “Had he chosen to do so [he] could have earned an honest living. Regretfully, he did not so choose. His apparent success, now set at naught, was the product of deceit and dishonesty.”
Mr Williams, on the other hand, was “self-effacing quiet and unassuming in public” and to outsiders “very much the paid employee”, Mr Temple added. “The reality was a little more complex. Underneath the modest exterior (he) was a knowing contributor.”
The two men, along with Swiss lawyer Michael Becker, who is not before the court, had all been involved, he said, in a joint enterprise to defraud AIB and Bank of Scotland, which was persuaded to lend money to buy a passenger ferry to be turned into a luxury yacht.
In early 2007, AIB became concerned about the value of guarantees offered by Oregon Finance, but Mr Kallakis produced fraudulent documentation claiming that the company owned nearly $2 billion worth of shipping.