Achilleas Kallakis charged with defrauding two European banks

March 5th, 2010

High stakes poker player and Greek tycoon, Achilleas Kallakis, was charged with defrauding two European banks on Monday, March 1, 2010 in London. He had to post £140,000 bail and must report to the Chelsea police station once a week until his court appearance on May 4, 2010. The charges brought against Kallakis carry a possible 10 year prison sentence.

Kallakis was one of the most prominent real estate deal-makers on London’s property scene. He invested more than £850m buying some of London’s most valuable properties including the Department of Health building in Vauxhall and the Home Office’s Immigration and nationality Directorate in Croydon. In 2007, he was said to be developing a 20,000 square foot flat in a St. James Square property that would sell for £105 million, making it the most expensive penthouse apartment in the world. At that point in time, he was ranked the 11th richest Greek in the world worth about £250 million.

As with most businessmen, Kallakis used bank loans to fund his property investments. Problem is, he and his colleague, Alexander Williams, are accused of obtaining such loans fraudulently. The alleged fraud is based on Kallakis’ claims that tenant leases were more expensive and longer than they really were. Allied Irish Bank (AIB) was one of the banks affected by the alleged scam. AIB fronted Kallakis a series of loans over a five-year period for the purchase of UK real estate. In 2008, they became aware of some “issues with the loans”. Upon an AIB investigation, the bank found the tenants of “their” properties to be linked directly to Kallakis. As a result, they immediately seized the properties and sold them at a £56 million loss. Kallakis is also accused of defrauding the Bank of Scotland causing that bank to lose £5 million on a 2008 loan given to Kallakis to refurbish a former ferry into a luxury yacht.

The Serious Fraud Office along with the City of London police began their own investigation of the AIB allegations which lead to a raid of three Kallakis’ properties. Kallakis and Williams are currently charged with two counts of conspiracy to defraud, 13 counts of forgery, five counts of fraud by false representation, two counts of money laundering and one count of obtaining a money transfer by deception. Based on the investigation, the SFO said it “believes that further financial institutions have also been deceived by the suspects”.

High stakes and high risks seem to be among Kallakis’ favorite things. An avid poker player, though far from popular, known as “the Don”, Kallakis made regular trips to Vegas, enrolled with several big-time poker websites and has even been featured on some televised poker games. He has won $359,090 in live poker tournaments which places him third on Greece’s all time money list.

If the allegations hold true and Kallakis is convicted, the once well-respected Greek tycoon will have played his last high-stakes, high-risk game.