Fraud accused 'lied' about assassins

LOIZOS MICHAELS: On trial for fraud.
LOIZOS MICHAELS: On trial for fraud.

The former chief executive of the Christchurch Casino says complaints about coffee led to an accused fraudster convincing him a contract had been taken out on his head.

Stephen Lyttelton is giving evidence in the High Court at Auckland in the trial of Loizos Michaels, who faces 31 charges of fraud in relation to $3 million in losses. He has pleaded not guilty.

Lyttelton was acting chief executive of Christchurch Casino in early 2007 when Loizos came to his attention after he complained about the quality of the coffee to casino chairman Barry Thomas.

Loizos was a VIP member of the casino, but was different from other high rollers as he played slot machines and gambled all hours of the day, Lyttelton said.  

"He played during the day as well as night. You find the VIP players tend to play at night time because they have other activities during the day."

In opening arguments earlier this week, prosecutor Christine Gordon told the court that Loizos had lost $130,000 at the casino to earn VIP status, and had spun a "web of deceit" to convince Lyttelton and others to invest in fictitious enterprises.

Lyttelton said he immediately formed a rapport with Michaels after the coffee complaint. 

"We got on very well actually, I liked him a lot. He had a great sense of humour and was very knowledgeable about the business."

Michaels told him he was a corporate raider for the Macau-based Ho family, who own international casino empire Melco, and SkyCity's New Zealand assets were being targeted for a takeover.

Lyttelton told the court that at the time he met Michaels he was earning $400,000 per year in salary and bonuses from the Christchurch Casino, but he had been looking for work after the casino board turned down his application to become chief executive on a permanent basis.

In April 2007, Michaels offered Lyttlelton a role with Melco, starting with helping to take over SkyCity but later managing casinos in Macau, he said. 

He was initially promised $US1 million in annual salary but this offer quickly rose to $12m. In June of that year Lyttelton resigned from Christchurch Casino and subsequently formed New Zealand Casino Services to effect the SkyCity takeover at Michaels' request, he said.

His trust of Michaels was based on his knowledge of the casino industry, his apparent links with the Ho family and a belief he was looking out for Lyttelton's interests.

"He said as part of the due diligence Melco had conducted on Christchurch Casino it had come to their attention that someone had put a contract on my life for $100,000. 

"That person was a shareholder of the casino," he said.

Lyttelton said the threat was to his own life, and those of his children. 

Asked by Gordon if he believed the threat, he said: "Actually I did. By that stage he'd build up sufficient credibility that I did believe it."

Lyttelton said there were two instances where Michaels led him to believe his life was in imminent danger.

"There was one night I was in the casino with Michaels and he pointed out two men at one of the tables, and he said it had come to his attention they were out to cause me harm. He said they were assassins, basically," he said.

Another apparent threat came while Lyttelton was at his sons' cricket game at Hagley Park on a Saturday. Michaels told him the assassin had been captured and secretly shipped to Macau by security agents working for Melco.

Lyttelton said threats at casinos were not uncommon, and recounted an incident involving a Christchurch brothel keeper who had intimidated one of his staff.

Michaels' response to the apparent assassination attempts was reassuring, he said. 

"I thought he was taking a good, holistic interest in me."

Lyttelton said Michaels claimed he was related to the Cypriot family who ran the Louis family shipping line, and also had a mysterious Japanese backer known as "Uncle" he talked with using unorthodox technology.

"He said he had some form of ear implant which enabled him to communicate with Uncle using that," Lyttelton said.

The trial continues.