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Accused fraudster denies knowledge of forged paperwork

Achilleas Kallakis who faces 21 charges of conspiracy, told the court he had ‘no idea’ documents were forged

Accused fraudster Achilleas Kallakis, the nephew of a Greek shipping tycoon, has told a jury he had no idea that forged documents had been prepared for banks that had provided hundreds of millions of pounds in loans for a string of property acquisitions, many involving landmark London office blocks.

Speaking from the witness stand at Southwark crown court, Kallakis gave his side of the story for the first time since he and his business partner Alexander Williams were charged with 21 counts of conspiracy to defraud over a five-year period. Both have pleaded not guilty to all charges.

Allegedly fraudulent loans totalling £750m led ultimately to heavy losses for Kallakis’s lenders. Allied Irish Bank has said it lost £56m from its dealings with Kallakis and Williams, while Lloyds claims to have lost €5.8m.

The jury earlier heard from Victor Temple QC, prosecuting counsel for the Serious Fraud Office, how university friends Kallakis and Williams had been convicted in the mid 1990s in relation to a separate forgery conspiracy concerning the sale of bogus feudal titles to Americans.

Kallakis had been convicted under the name Stefanos Kollakis while Williams had been convicted under the surname Lewis. Asked about his decision to change his name, Kallakis said: “The reason was because I had done something wrong that was utterly illegal – I paid the price with a community service order. It was time for a fresh start and to move forwards in business.”

Kallakis claimed he had sold the bogus titles after receiving incorrect legal advice that genuine titles could lawfully be sub-divided and sold separately. He pleaded guilty to those charges and said he co-operated with prosecutors.

Kallakis said he was “very close” to his wealthy uncle Pantelis “Lou” Kollakis and had for many years in his early career worked for an offshoot of the shipping tycoon’s Kappa Maritime empire. He described his uncle as a “very, very wealthy man. [...His fortune] is certainly multibillion-pound”.

Kallakis recalled how his uncle and several other member of his extended family left the UK after the business activities of Lou Kollakis came under tax scrutiny. “All members of my family all moved back to Greece. There had been a deep and broad investigation into my uncle’s business by the Inland Revenue, which resulted in them departing hastily from the UK.”

Kallakis also explained how Lou Kollakis provided some £350,000 to help with the £1.35m purchase of his home in Brompton Square, Knightsbridge. The home is owned by a trust, which, before the Greek shipping tycoon’s intervention, had very little funds.

Kallakis’s children were the beneficiaries of the trust and he was allowed to receive a daily salary of £750 as its chief adviser, though final decisions lay with a lawyer in Switzerland. The Lugano-based lawyer has been named as an alleged co-conspirator by the prosecution but is not a defendant in the case.

The trust became the core of Kallakis’s business activities, investing heavily in large property deals as it secured a string of large loans from banks. The prosecution claims bogus paperwork provided by Kallakis purported to show companies he controlled had agreements that guaranteed rental incomes on properties even if no tenants could be found. The supposed guarantors have given evidence to the court insisting this was never the case.

Asked about his use of the name Pacific Group of Companies – a title that appeared on a brass plaque outside Kallakis’s Mayfair offices, but had no legal status – Kallakis said this was a convenient description of the collection of genuine companies and for himself. He described it as “a more appropriate way of doing my business”.

Earlier in the trial, Temple characterised Kallakis as the fraud frontman, saying he was “confident, assertive and, on occasion, arrogant”. Meanwhile, Williams, he claimed, was “self-effacing, quiet and unassuming … [and was] a versatile and prolific forger”.

The trial, which started more than three months ago, continues on Monday. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds