Poker ‘Don’ Sentenced to 7 Years in $1.2 Billion Fraud CaseJeremy Hodges
Greek businessman Achilleas Kallakis, known as “The Don” on the international poker circuit, was sentenced to seven years in jail by a U.K. judge after being found guilty of defrauding lenders to pay for trophy property, planes, a yacht in Monaco and luxury cars.
The crime amounted to “fraud on a major scale,” Judge Andrew Goymer said at a hearing in London today. Kallakis, 44, and his co-conspirator Alexander M. Williams, also 44, were convicted yesterday of defrauding banks to borrow 740 million pounds ($1.2 billion) and acquire 16 properties including an office building on London’s St. James’s Square.
“Both men took full advantage of the prevailing banking culture in which corners were cut and checks and applications were spurious,” Goymer said. Williams was sentenced to five years in jail.
The two men, operating out of an office in central London’s Mayfair neighborhood as the Pacific Group of Companies, conspired from 2003 through 2008 to defraud lender Allied Irish Banks Plc, the U.K. Serious Fraud Office said. They borrowed 29 million euros ($38.8 million) more from Lloyds Banking Group Plc’s Bank of Scotland unit to convert a passenger ferry into a yacht for Kallakis’s use.
The lenders were given a forged guarantee from a Hong Kong company to get bank loans that exceeded the purchase prices of the properties. The suspected fraud was reported to the prosecutors at the SFO by the Hong Kong firm and by Allied Irish. An investigation began in January 2009 and the men were later charged with forgery, fraud by false representation, money laundering, conspiracy to defraud and obtaining a money transfer by deception.
“The two banks have undoubtedly acted carelessly and imprudently by failing to make full inquiries before advancing the money,” despite receiving a warning from lawyers on the risks of lending money to the men, Goymer said handing down his sentence today. “It almost beggars belief that senior management chose to disregard that warning in its rush to complete the deal at all costs.”
Ian Kitts, a London spokesman for Lloyds, said the case involved “a sophisticated fraud committed by determined individuals.”
“The fraud against Bank of Scotland was originally identified by the bank, following its own investigation,” he said in an e-mailed statement.
Niamh Hennessy, a Dublin-based spokeswoman for AIB, declined to comment. Lawyers for the men were not available for comment.
Kallakis and Williams, who was jailed for five years, were both disqualified from acting as company directors for a total of six years as part of their punishment, while a hearing on asset confiscation will be scheduled for later in the year.
“This was an audacious, persistent fraud that enabled these defendants to lead the lifestyle of the super-rich,” Ronan Duff, an SFO case manager, said in an e-mailed statement.