Loizos Michaels receives eight years

18 December 2012

Loizos Michaels receives eight years

Loizos Michaels (45) has today been sentenced to eight years' imprisonment in the Auckland District Court. The sentence is the result of Crimes Act charges laid by the Serious Fraud Office (SFO) in 2009.

A complex, eight-week trial concluded last month when Mr Michaels was found guilty by Judge Field of all 30 charges of obtaining or causing loss by deception, which the SFO had pursued against him.

The period of offending in New Zealand occurred from March 2007 to August 2008. The total ‘investments' given to Mr Michaels and investigated by the SFO were in excess of $3 million.

Acting Chief Executive of the SFO, Mr Simon McArley said, "This brings to a close a long, complex and sometimes colourful case. These cases consume significant resources but it is important to do this to provide an effective response to serious financial crime."

ENDS

For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Background to investigation

Loizos Michaels is known to use numerous aliases, including Michael Loizos, Michael Lozis, Michael Loizis, Michael Loizou, Michael Loizs and Michael Callis. His correct identity according to his Australian Passport is Loizos Michaels. He is 45 years of age. He is believed to have been born in Cyprus, but grew up in Melbourne Australia.

Mr Michaels' elaborate and extreme deceptions included claims that he:
- had wealthy Greek Cypriot family contacts;
- had personal and business relationships with leading Asian and Pacific casino owners;
- was orchestrating a takeover bid for the Sky City casino group;
- was involved in an array of other property developments and overseas projects
- had knowledge of death threats against investors
- had the support of high profile members of the community
- had relationships with a broad range of individuals from Belgium bank managers to law firms to the Hells Angels and Yakuza criminal gang.

Crimes Act offences

Section 240 Obtaining by deception or causing loss by deception
(1) Every one is guilty of obtaining by deception or causing loss by deception who, by any deception and without claim of right,-
(a) obtains ownership or possession of, or control over, any property, or any privilege, service, pecuniary advantage, benefit, or valuable consideration, directly or indirectly; or
(b) in incurring any debt or liability, obtains credit; or
(c) induces or causes any other person to deliver over, execute, make, accept, endorse, destroy, or alter any document or thing capable of being used to derive a pecuniary advantage; or
(d) causes loss to any other person.

(2) In this section, deception means-
(a) a false representation, whether oral, documentary, or by conduct, where the person making the representation intends to deceive any other person and-
(i) knows that it is false in a material particular; or
(ii) is reckless as to whether it is false in a material particular; or
(b) an omission to disclose a material particular, with intent to deceive any person, in circumstances where there is a duty to disclose it; or
(c) a fraudulent device, trick, or stratagem used with intent to deceive any person.

Role of the SFO

The Serious Fraud Office (SFO) was established in 1990 under the Serious Fraud Office Act in response to the collapse of financial markets in New Zealand at that time.

The SFO operates three investigative teams:

• Evaluation & Intelligence;
• Financial Markets & Corporate Fraud; and
• Fraud & Corruption.

The SFO operates under two sets of investigative powers.

Part I of the SFO Act provides that it may act where the Director "has reason to suspect that an investigation into the affairs of any person may disclose serious or complex fraud."

Part II of the SFO Act provides the SFO with more extensive powers where: "...the Director has reasonable grounds to believe that an offence involving serious or complex fraud may have been committed..."

The SFO's Annual Report 2012 sets out its achievements for the past year, while the Statement of Intent 2012-2015 sets out the SFO's three year strategic goals and performance standards. Both are available online at: www.sfo.govt.nz