Former Croydon travel agent Achilleas Kallakis, who posed as a super-rich Mayfair property tycoon, has been convicted of defrauding banks out of more than £750m in an audacious confidence trick involving actors, secretive offshore trusts, a fictional shipping empire and string of bogus references.
The conviction marks a welcome end to an embarrassing saga for Bank of Scotland, now part of Lloyds Banking Group, and Allied Irish Bank which advanced millions in loans without spotting Kallakis was a charlatan.
Together with an old university friend and forgery expert Alex Williams, Kallakis was found guilty on Wednesday morning of two counts of conspiracy to defraud by a jury at Southwark crown court.
The Guardian revealed three years ago that the two men had been convicted in 1995 – at the same court – of selling bogus British feudal titles to hapless Americans and Australians. These earlier convictions had been reported at the time, but both men changed their names the following year. Kallakis had been convicted as Stephan Michalis Kollakis – with an 'o' – and Williams as Martin Lewis.
Central to the banks' decision to advance hundreds of millions of pounds to Kallakis was the fraudster's claim to have secured financial guarantees from a far eastern investor on commercial property acquisitions, effectively removing the risk of tenants not renewing their leases. Kallakis told the banks these guarantees would fall apart if the investor – Sun Hung Kai Properties (SHKP) – was contacted directly.
This explanation was accepted by the bankers who were desperate to lend to Mayfair tycoons such as Kallakis who appeared to be doing very well out of prime property deals in London. Years later, however, they were to learn the SHKP paperwork had been forged by Williams.
Among the buildings Kallakis bought were the headquarters of the Daily Telegraph in Buckingham Palace Road, bought for £225m; and Lunar House, the Home Office's asylum processing centre in Croydon, bought from Vincent and Robert Tchenguiz for £100m. In addition he bought the 23-storey Market Towers in Vauxhall, from Simon and David Reuben, for a reported £75m.
Kallakis said he wanted to turn property worth £120m, between Piccadilly and Pall Mall in St James's Square, into the world's most expensive penthouse.
He had all the trappings of a super-rich property baron – a yacht, a private jet, a fleet of luxury cars, a Knightsbridge home and lavish Mayfair offices. He also became a minor celebrity on the super-rich poker circuit, where fortunes were won and lost in an evening. Around the tables of Las Vegas, he called himself "The Don".
Heaping bogus claim upon claim, Kallakis at one point announced himself to be "ambassador of the Republic of San Marino to the Sultanate of Brunei".
A paid-for listing on the website Who's Who in America suggests he was a patron of the English National Ballet, member of the development board for the National Portrait Gallery and recipient of the Churchill Award for Excellence from the "Churchill Enterprise Foundation" – all exaggerations or fabrications.
Banks were provided with bogus references from the economist Lord Harris of High Cross, the former director of the Thatcherite thinktank the Institute of Economic Affairs. His widow gave evidence at the trial, insisting she knew nothing of the purported family friendship Kallakis claimed.
In his defence, Kallakis clung to claims that his connections to establishment figures were genuine. His lawyers showed the jury a picture of the fraudster with Lady Thatcher which had appeared in a magazine produced by the American Chamber of Commerce in the UK.
One of the few genuine connections Kallakis was able to build upon was that of his family link to wealthy Greek shipping tycoon Pantelis "Lou" Kollakis, his uncle. But when Lou Kollakis eventually attended a meeting with concerned AIB bankers in 2008 he told them he had no idea about the fictional business his nephew had persuaded the bank was real.
The colossal fraud is particularly embarrassing for AIB bankers who dealt with Kallakis, several of whom were forced to admit in evidence that they had accepted lavish hospitality from Kallakis in between bankrolling deals for him between 2003 and 2008. They had been to the 2006 World Cup final; stayed on Kallakis's yacht for the Monaco Grand Prix; and been flown to Mauritius for three nights as a "thank you".
Kallakis and Williams will be sentenced on Thursday morning.
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