UK Judge Andrew Goymer has sentenced Achilleas “The Don” Kallakis, an international tournament poker player and businessman of Greek origins, and his accomplice Alexander M. Williams to prison terms as they were proved guilty of having cheated renowned banks into lending them large sums of money to purchase a lot of personal property, including a yacht, planes, and luxury cars. The men have also been removed from their posts of managing directors of the Pacific Groups of Companies, which they operated from an office at Mayfair in London for six years as part of the sentence.
Delivering the verdict at a hearing held in London today, the judge said that it was a large-scale fraud. The two men had cheated two major banks into lending them loans as large as GBP740 million to purchase a lot of property. The judge said, “Both men took full advantage of the prevailing banking culture in which corners were cut and checks and applications were spurious.” While Kallakis got seven years in jail, Williams got a lighter sentence of five years.
Reportedly, the men cheated Allied Irish Banks Plc (ALBK) between the years 2003 and 2008. According to the UK Serious Fraud Office, the duo cheated Lloyds Banking Group Plc (LLOY), Bank of Scotland, into lending them Euro29 million, which they spent on acquiring a yacht for Kallakis.
SFO Case Manager Ronan Duff said in an email, “This was an audacious, persistent fraud that enabled these defendants to lead the lifestyle of the super rich.”
The men used a forged guarantee from a firm based in Hong Kong to acquire loans that were worth more than the properties they purchased. The firm reported the matter to the SFO, which conducted an investigation in Jan 2009. The men were then arrested and a case was filed against them, accusing them of fraud, forgery, money laundering, conspiring to cheat banks, and using deceptive methods to transfer funds.
Judge Goymer said, “The two banks have undoubtedly acted carelessly and imprudently by failing to make full inquiries before advancing the money. It almost beggars belief that senior management chose to disregard that warning in its rush to complete the deal at all costs.” Reportedly, the banks had been warned by their lawyers.
Calling it “a sophisticated fraud committed by determined individuals,” Lloyds spokesman Ian Kitts said in an email, “The fraud against Bank of Scotland was originally identified by the bank, following its own investigation.”