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Pair found guilty of £740m loans fraud

by Emma Dunkley on Jan 16, 2013 at 14:04

Pair found guilty of £740m loans fraud

Two people have been found guilty of defrauding banks millions of pounds to finance property deals and a yacht conversion.

Achilleas Kallakis and Alexander Williams will be sentenced on Thursday after for an elaborate fraud that involved the pair borrowing £740 million for the transactions.

Kallakis and Williams operated out of a Mayfair office, calling their operation the Pacific Group of Companies.  Over a five-year period until 2008 they defrauded Allied Irish Banks by using forged documents to obtain loans, then ploughed these funds into deals for a commercial property portfolio.

The Serious Fraud Office (SFO) said the transactions were structured so the bank loans exceeded the purchase price of the properties, adding the pair did this by providing the bank with a guarantee from a Hong Kong company - Sun Hung Kai Properties (SHKP) -  for long term payment of rents at top market rates.

The duo said SHKP was involved because its subsidiaries would receive large cash payments called a reverse premium and a share of the profits when the properties were sold.

However, SHKP had not entered into any guarantees and had no knowledge of the transactions or the subsidiary companies that had entered into them, the SFO said. 

The SHKP documents provided by Kallakis and Williams to AIB were forgeries and the duo pocketed the reverse premiums instead.

In a similar process, the Bank of Scotland agreed a loan of €29 million, which Kallakis claimed was wanted for the conversion of a super-yacht.

Michael Becker, a lawyer and businessman, is also alleged to have conspired with the defendants. The SFO said he was ‘closely involved in the fraud’ and was director of companies presented to the banks in the loan agreements as ‘borrowing companies.’

However, he has not been charged due to his absence from this jurisdiction, as he is a Swiss national based in Switzerland.

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