Monday 26 June 2017

'Fake tycoon and pal lavished treats on AIB staff as part of €850m scam'

Court told of trips to World Cup final and Monaco Grand Prix

Achilleas Kallakis: charged with fraud and money laundering
Achilleas Kallakis: charged with fraud and money laundering
Also charged: Alexander Williams

Shane Hickey in London and Siobhan Creaton

SENIOR AIB staff enjoyed luxurious junkets laid on by a man now accused of defrauding the bank in an elaborate £740m (€850m) scam.

The lavish jaunts included a trip to the 2006 World Cup final, the Monaco Grand Prix, excursions on private yachts and holidays in Russia and Mauritius.

A court in London was yesterday told how Achilleas Kallakis, a supposed Greek shipping tycoon, and his business partner Alexander Williams persuaded AIB over five years to lend £740m (€850m) for 16 separate landmark property deals.

AIB suffered a loss of £56m (€64m) on the deals, the Serious Fraud Office said.

Mr Kallakis and Mr Williams deny 23 charges including conspiracy to defraud, fraud, forgery, money laundering and obtaining a money transfer by deception.

Stuart Muldowney, a member of AIB's property team in London, told Southwark Crown Court that he had been on a number of "hospitality engagements" with his team and Mr Kallakis.

In one instance, he and Michael Cooke, a former senior relationship manager at AIB, were brought to the 2006 World Cup final between Italy and France in Berlin.

In May the following year, Mr Muldowney and David McWilliam, the then head of corporate banking for AIB in the UK, went to the Monaco Grand Prix and stayed aboard Mr Kallakis's yacht.

Mr Muldowney and Mr Cooke also travelled to St Petersburg in Russia for Mr Kallakis's 40th birthday celebrations -- although he said he paid for his own flights on that occasion.

Approval

He said there was an additional three-night trip to Mauritius after one of the property deals as a way for Mr Kallakis to say "thank you" for the work.

Mr Muldowney said Mr Kallakis wanted bankers on the trips to talk of "business-related matters".

Mr Muldowney said he had received approval from his line manager in the bank to go on the trips and that they did not influence the loan applications which the team were preparing for AIB's credit committee.

Yesterday, the court heard that Mr Muldowney had received a £45,000 (€52,000) bonus for 2007 -- a sum equivalent to 69pc of his salary -- because the property team had hit their targets that year.

He said the aftermath of the incident was "not the most pleasant experience". He subsequently moved to the deposits area of the bank's operations.

Mr Muldowney admitted that the hospitality was at the "upper end" of the scale but it was not uncommon in banking, he told the court. He had heard of other bankers being brought on skiing trips and he had been taken to Premiership matches in the past.

When cross-examined by George Carter-Stephenson, acting for Mr Kallakis, Mr Muldowney said he could not recall if the hospitality was the "talk of the office".

Mr Kallakis and Mr Williams are accused of using forged documents -- including letters attesting to their wealth -- to con the bank into loans for properties in some of London's most salubrious addresses.

Falsely claiming that they had a listed Hong Kong real estate group, Sun Hung Kai Properties, as their guarantor, the pair convinced AIB to lend them more than the properties' purchase prices, it was claimed.

The pair bought 16 landmark properties across sites in the city of London and Mayfair between 2003 and 2008 with £740m (€850m) in loans from AIB.

The UK's Serious Fraud Office (SFO) said the two men took out the loans based on a series of lies and false documents.

AIB seized the properties after the issue came to light and sold them to an Irish property company, Green Property. The bank made a loss of £56m (€64m) on the loans.

The trial is due to continue today.

Irish Independent

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