Markets: Eerie calm

Markets: Eerie calm

it is not clear when market sentiment can change; as in the past, it can be quite sudden.
At a turn and yet not

At a turn and yet not

RBI could be tempted to cut policy rate to support growth at its bi-monthly review.

UK judge slams banks defrauded by fake tycoon

Jan 17 2013, 22:21 IST
Comments 0
SummaryA British judge sentenced a fake property tycoon to seven years in jail on Thursday for defrauding two banks out of over 700 million pounds ($1.1 billion), but said the banks deserved some blame for poor risk controls.

A British judge sentenced a fake property tycoon to seven years in jail on Thursday for defrauding two banks out of over 700 million pounds ($1.1 billion), but said the banks deserved some blame for poor risk controls.

"The two banks, Allied Irish Banks and Bank of Scotland, have undoubtedly acted carelessly and imprudently by failing to make full enquiries before advancing the money," said judge Andrew Goymer as he sentenced Achilleas Kallakis, 44.

Kallakis was convicted by a jury at London's Southwark Crown Court on Wednesday of two counts of conspiracy to defraud, in one of Britain's biggest-ever property scams.

Co-defendant Alexander Williams, 44, was convicted of the same counts for his role in producing forged documents to back up Kallakis's applications for loans. Judge Goymer sentenced him to five years in jail.

"Both defendants took full advantage of the prevailing banking culture in which corners were cut and checks on applications were superficial and cursory," the judge said.

The case stems from a series of loans worth a total of 740 million pounds secured by the fraudsters from Allied Irish Banks Plc between 2003 and 2008.

Lax paperwork and weak background checks were hallmarks of Irish banking before the country's property bubble burst in 2008. Banks competed with each other to attract real-estate developers and often relied on personal guarantees to lend them individual loans running to hundreds of millions of euros.

The property binge precipitated Ireland's financial crisis and eventual EU-IMF bailout.

The conviction of Kallakis and Williams is a success for Britain's cash-strapped Serious Fraud Office (SFO), which was widely criticised last year for a botched investigation into the dealings of property barons Vincent and Robert Tchenguiz.

In another SFO victory on Thursday that had echoes of the Kallakis case, the director of a sub-prime loan company was sentenced in his absence to 7-1/2 years in jail for defrauding creditors including Barclays Plc to the tune of 100 million pounds.

The SFO said in a statement that Waheed Luqman, who fled Britain in 2011 after he was charged and is believed to be in Pakistan, was a director of Lexi Holdings, a property finance company that went into administration in 2006 with debts of over 100 million pounds.

He conspired with other members of his family to defraud creditors of the company, including Barclays which was its main lender, between 2000 and 2006, the SFO said.

"The Lexi accounts were doctored to create a false picture of

Single Page Format
Ads by Google
Reader´s Comments
| Post a Comment
Please Wait while comments are loading...