Kallakis faces jail for defrauding AIB of £740m
Achilleas Kallakis, the man who conned AIB by borrowing £740 million (€ 930 million) to finance 16 property purchases, is set to face a “substantial” jail term when he is sentenced today.
Mr Kallakis and his co-defendant Alexander Williams, both 44, were unanimously convicted of two counts of conspiracy to defraud yesterday following a four-month retrial at Southwark Crown court in London. One count related to Allied Irish Banks and the other to Bank of Scotland.
The pair borrowed £740 million from AIB to buy 16 prestigious buildings around Britain, and another €26 million from the Bank of Scotland to convert a clapped-out ferry into a superyacht.
Jurors agreed with the prosecution’s claims that the men had forged a host of fake documents and lied about Mr Kallakis’s wealth in order to con AIB, which was bailed out by the Government in September 2008, as their fraud was uncovered.
Mr Kallakis and Mr Williams were convicted of faking deeds of guarantee purportedly from Hong Kong-based estate agent Sun Hung Kai Properties (SHKP).
Guarantees and other documents were falsely signed in the name of SHKP bosses Walter Kwok and Mike Wong, with Williams blaming the forgery on a broker called Richard Lee who claimed to have been working on behalf of SHKP.
The fake documents handed to AIB which also guaranteed rental income, increased the value of the properties by £77million. A further £114 million due to be paid in reverse premiums – an incentive falsely promised to SHKP as part of their involvement in the deal – was “available to and used by” Mr Kallakis and Mr Williams.
According to the Serious Fraud Office, Mr Kallakis and Mr Williams were able to maintain the deception over five years “through skilful forgeries and manipulation of the bank”.
The fraud came to light during 2008, and AIB offloaded Mr Kallakis’s property portfolio to Green Property for £667 million.
After Mr Kallakis and Mr Williams were convicted, George Carter-Stephenson QC for Kallakis accused AIB of “contributory negligence” and having a sloppy attitude to paperwork.
He said this had been “brought about by what may appear to be the rather cavalier attitude of banks towards the lending of vast sums of money.”