£740m AIB fraudster Achilleas Kallakis ‘vulnerable to being deceived’, claims son

AIB says it was the victim of fraud. Photo: Conor Ó Mearáin / Collins Photos

John Mulligan

AIB has described as “baseless” and “absurd” accusations that it made misrepresentations to sell assets amassed using £740m (€863m) that the bank was conned into advancing during the boom.

Michalis Kallakis, the son of Greek businessman and fraudster Achilleas Kallakis, who secured the loans under false pretences, has been pursuing the claim against AIB in London since 2018.

Achilleas Kallakis – well-known on the international poker circuit – was initially jailed in 2013 for seven years for the AIB loan fraud. He used the money to buy high-end London properties, and pay for yachts, art and luxury cars. His sentence was later increased to 11 years. His business partner, Alex Williams, was sentenced to eight years.

“Achilleas Kallakis, as a professional fraudster, is particularly vulnerable to being deceived himself,” lawyers for Michalis Kallakis said in a filing in the case. “As anyone who has seen Michael Caine and Steve Martin in Dirty Rotten Scoundrels will appreciate.”

But AIB has dismissed the allegations against it.

“It is beyond understanding” that the bank finds itself in the position of a defendant, the bank’s lawyers said in a defence filing.

They added: “The idea that the victim of the fraud could somehow find itself in the dock – criticised by the fraudster for the manner in which it sought to mitigate the losses to which it was exposed by reason of fraud is beyond fiction.”

Achilleas Kallakis and Alex Williams used fake documentation to secure the bank loans from AIB between 2003 and 2007. The money was loaned to a number of special purpose vehicles (SPVs) registered in the British Virgin Islands.

But in 2008, AIB discovered that the documentation used to procure the loans was fake. In November that year, it served notice of default and sold the properties the same day to 14 entities that were part of Dublin-based Green Property, the group founded by Stephen Vernon.

The Irish Independent reported in 2020 that Michalis Kallakis claimed he was a beneficiary of the Hermitage Syndicated Trust, which was the sole shareholder in each of the SPVs that his father used to buy the properties with AIB loans. The trustee of that trust was Michael Becker.

Michalis Kallakis has claimed that the bank caused loss by repossessing the properties, or seizing control of the SPVs, or by making false and/or negligent misrepresentations to gain control of the SPVs and the properties.

He also alleges that AIB sold the properties without legal authority, and that it breached a duty to obtain the best possible price for them.

Lawyers for Michalis Kallakis and AIB have declined to comment.

In March this year, the UK’s Serious Fraud Office succeeded in efforts to seize £92,000 originally donated by Achilleas Kallakis to a leading private London school in 2005 to help it built a theatre.

During court proceedings this month, he insisted that he was not a “career criminal” and that he was the victim of a miscarriage of justice when he was convicted in 2013 of the fraud against AIB.

Additional reporting, Bloomberg