Fraud accused claims mafia links

03:22, Nov 05 2012
Loizos Michaels
LOIZOS MICHAELS: On trial for fraud.

Alleged conman Loizos Michaels told investors in Australia he was connected with Japanese and Cypriot mafia gangs and had organised the discreet assassination of a business rival, the Auckland District Court has heard.

The court today began hearing from witnesses flown in from Australia who had dealing with Michaels from 2004. The Crown are using these witness to give evidence about Michaels' propensity to offend.

Michaels has pleaded not guilty to 31 counts of fraud involving more than $3 million of losses by New Zealand investors in 2007 and 2008.

Witness Adam Hanson said he met Michaels in the middle of 2004 and he knew him as "Michael Louisos". Michaels become involved in his business, Saltwater Films, in an effort to resolve a dispute with business partner Peter Barnaby, he said.

Hanson said Michaels told him to make a phone call to Barnaby's local pub and inform them that their regular customer had passed away.

Questioned by prosecutor Rachael Reed, Hanson said Barnaby at that point was still alive. "It would have been a week or two later that he passed away from a heart attack," he said.

Under questioning from Reed, Hanson said Michaels had an alternate explanation for the sudden death. "He led us to believe that Peter Barnaby's heart attack wasn't a heart attack, it was from a lethal injection from people that he knew and led us to believe these were the sorts of things he could do," he said.

Hanson said Michaels claimed to have connections with the Japanese Yakuza and that his father was the head of the Cypriot mafia. He said Michaels convinced him and others to set up companies and raise funds in a push to develop a major film studio production house on Australia's Gold Coast.

The trial continues. Since it began, it has heard from ex-All Black Jonah Lomu, National Party President Peter Goodfellow and Michaels' estranged wife.