£740m fraud case told of extravagant invitations to AIB staff
THE SHIPPING magnate at the centre of a £740 million (€925 million) fraud schmoozed AIB staff with luxury trips abroad to convince them to lend him money to fund a property empire, a court in London has heard.
Achilleas Kallakis (44) invited AIB employees on his yacht in Monte Carlo, to dinner in Cannes and on a weekend in Mauritius, it was said. In one extravagant trip, jurors were told he even chartered an aircraft to fly 200 guests to St Petersburg for a party.
Michael Cooke, a senior corporate banking manager at AIB’s London branch at the time, said everything had to be signed off in line with banking regulations, but he added: “In some ways we were encouraged [by the bank] to go.”
Victor Temple QC, prosecuting, asked: “How would you describe the level of hospitality extended to the bank by Mr Kallakis?”
“I would say it was appropriate for the size of the company and transactions we had with them and I had known him for a number of years,” Mr Cooke replied. “We had a friendly professional relationship.”
Asked what sort of hospitality he received, Mr Cooke said: “I visited him on his yacht in Monte Carlo, we were invited to dinner with him during a property conference in Cannes.
“I was invited to join him and his family, along with my wife, for a big do held in St Petersburg. We paid our own air fares and accommodation. There were about 200 people invited. Mr Kallakis was paying for it as he was hosting and guests were flown to the party in a chartered plane.
“I went to Mauritius when I was invited for a weekend as part of the final transaction along with other banking staff and the broker. And I did receive an invitation to the Monaco Grand Prix but I didn’t go.”
Mr Cooke said he believed Mr Kallakis was a “man of integrity” who had a “significant personal wealth”.
A letter written to the bank to prove his credentials claimed Mr Kallakis had taken over the family business from his father at the age of 24 and had ambitions to build a £1 billion property portfolio in his own right. It also said the shipping heir’s family dynasty dated back to the 1860s and that he sat on the board of many charities, including the Prince’s Trust.
Mr Cooke said he believed the letter. “I thought he was a very wealthy Greek shipping magnate who was head of a business empire. His bona fides were impeccable.”
Mr Kallakis became one of the bank’s biggest customers but things came crashing down when AIB discovered the tycoon and his number two, Alexander Williams (44), had allegedly conned them into lending cash with a series of fake guarantees.
The pair went on to buy 16 properties, including an office in Mayfair, but the fraud came to light when their business went bust causing AIB to lose millions when it was forced to sell off the portfolio.
Checks then revealed Hong Kong-based reputable estate agent Sun Hung Kai Properties, which Mr Kallakis allegedly claimed was guarantor for the purchases, had nothing to do with it.
Mr Kallakis and Mr Williams deny two counts of conspiracy to defraud, 13 counts of forgery, five counts of fraud by false representation, two counts of money laundering and one count of obtaining a money transfer by deception.
The trial at Southwark Crown Court continues.