A UK judge sentenced Achilleas “The Don” Kallakis, international poker player and Greek entrepreneur, to a prison term of seven years after finding that he was guilty of cheating his lenders to purchase planes, luxury cars, trophy property, and a yacht.
Calling it “fraud on a major scale,” Judge Andrew Goymer stated at a hearing in London that 44-year-old Kallakis and his 44-year-old accomplice Alexander M. Williams were found guilty of cheating banks into lending them $1.2 billion or £740 million to purchase a lot of property, including a commercial complex located on St. James’ Square, London.
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 a 7-year prison term, Williams got a 5-year term.
The two men had their headquarters at Mayfair in Central London, which they called the Pacific Group of Companies. They now stand guilty of cheating Allied Irish Banks Plc (ALBK) into lending them huge loans from 2003 – 2008. According to the UK Serious Fraud Office, the duo borrowed loans worth $38.8 million or Euro29 million from the Bank of Scotland unit of Lloyds Banking Group Plc and used it to transform a passenger boat into a yacht for the personal use of Kallakis.
The two men furnished a forged guarantee from a company based in Hong Kong to get banks to lend them loans that far exceeded the cost of the properties. Allied Irish and the firm in Hong Kong reported that they suspected fraud on the part of the two men, and an investigation was duly held in Jan 2009. The men were later arrested and booked on counts of forgery, money laundering, fraud, conspiracy, and using deception to transfer funds.
Reportedly, the banks had been warned by their lawyers about the risks involved in the loan deal. Awarding the sentence to the two men, 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 should disregard that warning in its rush to complete the deal at all costs.
Lloyds spokesman Ian Kitts said in an email,
The fraud against Bank of Scotland was originally identified by the bank, following its own investigation.
The two men have been disqualified from their post of company directors for 6 years as part of the sentence.
