Achilleas Kallakis who is under investigation by the Serious Fraud Office (SFO) over an alleged £56m property fraud has a previous conviction for selling fake British titles to wealthy Americans.
An investigation by Property Week has revealed that the entrepreneur and gambler Kallakis, whose Pacific Group amassed a £1bn UK property portfolio during the last five years, was previously known by the name Stefanos Kollakis.
In 1995 Kollakis,now known to be Achilleas Kallakis, and his business partner Martin Lewis, thought to be Kallakis' current business partner Alex Williams, pleaded guilty at Southwark Crown Court to a conspiracy to commit forgery which defrauded Americans out of more than $85,000.
Kollakis and Lewis set up a series of fake companies, including one called ‘The Institute of Heraldic Affairs’. It sold forged manorial [Lord of the manor] titles that promised such exclusive rights as a priority on the Queen's ‘social list’ and ‘the right to hold the right hand of the monarch’.
Both Kollakis and Lewis pleaded guilty and were fined and sentenced to 160 hours of community service.
This week Kallakis and Williams, who could not be reached by Property Week, were subject to a fresh fraud investigation after the SFO raided their homes and office as it investigates an £56m property fraud against Allied Irish Bank (AIB).
The alleged fraud concerns overriding leases provided by Kallakis that inflated the length and rents of existing tenants’ leases in order to secure larger finance facilities from AIB. Guarantees from a ‘blue chip property company’, unbeknownst to it, were provided for payment of the leases.
Following an internal bank review of the loans AIB realized that `over-riding’ leases had artificially inflated values and did not exist. It called in the SFO to investigate further. After this AIB took control of and transferred the properties to Green Property with AIB’s debt intact, as revealed in Property Week (19.12.08). This transfer to Green Property subsequently led to the bank taking a write-down of £56m.
Green Property is in no way involved with the alleged fraud and has had no dealings with the Pacific Group.
Properties Kallakis bought with AIB funding during the period include the 234,000 sq ft headquarters of the Telegraph newspaper group, bought for £218m, 7-8 St James’s Square for £120m, Apollo and Lunar House in Croydon for £95m, Market Towers in Vauxhall for £75m and the India Buildings bought for £45m.
Kallakis is the main suspect but the SFO said that he operated ‘with the assistance of others.’
The SFO said it believes other financial institutions have been deceived by Kallakis. AIB is considering legal action against ‘a number of parties in respect of its deficit.’