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Pair jailed for defrauding banks of over £740m

Two businessmen have been jailed after they defrauded banks of over £740m by using forged documents to secure loans to acquire a 16-property portfolio.

Achilleas Kallakis has been sentenced to seven years in prison and Alexander Williams has been sentenced to five years in prision, after the jury returned unanimous guilty verdicts on two counts of conspiracy to defraud at Southwark Crown Court yesterday.

Kallakis and Williams have also been disqualified from acting as company directors for six years. The case was brought by the Serious Fraud Office following an investigation carried out with the City of London Police.

Between 2003 and 2008 Kallakis and Williams conspired to defraud Allied Irish Banks to obtain loans to finance a mostly commercial property portfolio.

The loans exceeded the purchase price of the properties through guarantees by Hong Kong property company Sun Hung Kai Properties, but the company had no knowledge of the transactions. The loans advanced by AIB were £60m in excess of the cost of the properties.

In a similar fraud in 2007 and 2008,the Bank of Scotland agreed a loan of €29m to convert a former passenger ferry into a super-yacht for Kallakis’s personal use.

He provided the bank with a worthless guarantee from Oregon Finance Corporation, using false accounting documents and forged attribution certificates.

The ferry on which the loan was secured turned out to have no value. By the time suspicions were raised, BoS had advanced €5.7m of the total €29m agreed.

During the trial the jury were told Kallakis used the proceeds of his fraud to fund a super-rich lifestyle in which he maintained a fleet of chauffer driven Bentleys, a private plane, a private helicopter, a luxury yacht moored in Monaco harbour and a collection of high value art works.

SFO case manager Ronan Duff says: “This was an audacious, persistent fraud that enabled these defendants, Kallakis in particular, to lead the lifestyle of the super-rich. The SFO has been equally persistent in investigating this elaborate scam and in ensuring that justice has been delivered.”

Confiscation proceedings will take place at a later date.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Roman Duzinkewycz 17th January 2013 at 4:53 pm

    Well worth the price. Hope they’ve kept the money.

  2. These guys have lived beyond even the richest people in the worlds dreams, and they get 5 years? Are you seriously having a laugh?

    Re the BOS lending £5.7m without even seeing the security – Whoever performed the underwriting on that loan should be locked up too.

    Also how can guarantees be provided on negative equity loans? I could understand if the surveys had been “made up” to reflect equity that didnt exist, but the fact that there was a guarantee on this smells like they were aware of the fact that the LTV was over 100% in the first place, in which case the underwritter should be implicated as well.

    If the banks do not do the relevant checks they will be taken advantage of – Unfortunately we live in a world where money and greed attract criminals and fraud on every level. This is blatant negligence and stupidity from the lenders perspective.

    Makes you wonder why I cant get a legitimate 20% LTV REMO through on an affordability of less than 1x salary due to an oversight and missed £5 catalogue Direct Debit and they can secure MILLIONS on thin air.

    Lunatics running the asylum anyone? Sheesh

  3. 40 hours community service would be more fitting

    ban these lenders from lending for five years

    aib and bos had no system in place

    all about ticking boxes
    “oh you have a letter of guarantee from a company on headed paper saying they will guarantee 60M- so we can lend you 40M -is that Ok?”
    I have come across this attitude so many times but never in such an absurd way

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