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Accused fraudster Achilleas Kallakis used forgeries to give illusion of wealth, court told

Nephew of shipping tycoon alleged to have secured 17 loans, largely for property purchases, by deception

Achilleas Kallakis, the nephew of a Greek shipping tycoon, used a slew of forged documents to give the illusion of vast wealth as part of an elaborate £750m fraud against Allied Irish Banks and Lloyds Banking Group, a court heard on Thursday.

Kallakis and his close friend and business partner Alexander Williams are charged with 21 counts of conspiracy to defraud relating to a series of alleged deceptions devised to secure loans used to buy 16 large properties, most of them office blocks in London, and a 17th loan to convert a former passenger ferry into a luxury superyacht. Appearing at Southwark crown court, the two men have pleaded not guilty to the charges, which are said to have taken place between 2003 and 2008.

The jury was told the men had changed their names since pleading guilty at the same court 16 years ago to a forgery conspiracy relating to a scam to sell bogus honorary titles to unsuspecting Americans. Kallakis had been convicted under the name Kollakis – with an “o” rather than an “a” – while Williams had been convicted under the name Lewis.

Rather than leave their past in forgery behind, the jury were told, Kallakis and Williams devised an even bolder plan involving property loans. Allegedly forged documents purported to show companies controlled by Kallakis had agreements with a Hong Kong property business that guaranteed rental incomes on properties even if no tenants could be found for the buildings.

According to Victor Temple QC, prosecuting counsel for the Serious Fraud Office, these guarantees were critical to securing loans. “It may be that the defendants hoped to repay the banks in full. But, at best … it was an extravagant, if not fanciful, hope,” said Temple. “The banks lent more money than they normally would have, as a result of lies and the use of forged documents as to the security for the loans. Indeed, had the banks known all the facts they would not have lent a penny piece.”

The jury was told they will hear from managers at Hong Kong-listed property group Sun Hung Kai who will say they had not entered into any such guarantees. AIB is said to have lost £56m from its dealings with Kallakis and Williams, while Lloyds claims to have lost €5.8m.

As well as allegedly making false claims about guarantees, the SFO claims Kallakis and Williams worked hard to give the false impression that Kallakis was the owner of Oregon Finance Corporation, a large offshore-incorporated business with shipping interests.

Kallakis was said to be the front man, according to Temple – “confident, assertive, and on occasion arrogant”. Meanwhile, his alleged co-conspirator Williams was “self-effacing, quiet and unassuming”. Williams, said Temple, was “a versatile and prolific forger”.

Despite being related to the wealthy shipping magnate Lou Kollakis, the jury was told that Kallakis did not come from an affluent background, nor had he enjoyed great business success himself. © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds