Fraud accused offered cars for furniture

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

A furniture dealer owed money by a man accused of fraud was offered two cars as security, even though the accused did not own the cars, the Auckland District Court has heard.

Eric McCall met Loizos Michaels, who has pleaded not guilty to 31 counts of fraud involving $3 million, by chance in June 2008 when he stopped to see how work on Michaels' Greek restaurant in Auckland was progressing.

''I wondered when they were going to open... a voice said we open next week,'' McCall said.

Michaels asked McCall and his wife if they wanted to have a look.

''My family is involved in importing furniture, Michaels said he was waiting to try and get furniture before he could open,'' said McCall.

McCall organised to furnish the restaurant and payment was to be cash on delivery. The furniture was delivered about two days from the restaurant's opening. But on delivery, Michaels told McCall he didn't have his cheque book and that he would pay him online, the court heard.

Payment was never made. He contacted Michaels several days a week for up to three months pursuing the debt.

McCall said Michaels always said there was a delay because his banks were in Australia. On one occasion Michaels made a phone call in front of McCall to HSBC expressing his frustration and embarrassment that a payment had not been made to McCall. 

''That's what Mr Michaels told me, I never spoke to anyone on the other end,'' McCall said.

Michaels later offered a silver BMW as security, on the condition he could continue to drive the vehicle.

''My brother said we run a furniture company not a car dealership. It was not acceptable,'' McCall said.

He also offered a replica Dukes of Hazard vehicle as security providing it was put into storage.

''After storage fees amounted, it turned out none of the vehicles were owned by Mr Michaels or the restaurant.'' 

McCall took a photo of the BMW which he claimed had two different registration plates, one related to a bogus global kickboxing venture Michaels had promoted and had attempted to associate with All Black great Jonah Lomu.

Michaels spoke continually about involvement in other ventures including the casino industry, that he'd hired people from Christchurch casino and that they were considering taking over the SkyCity casino in Auckland, McCall said.

''He (said he) had interests in Macau and was also involved with the billionaire Macau-based Ho family,'' McCall said.

On one trip to chase his debt, Michaels asked him to accompany him to a business meeting on Auckland's waterfront.

Michaels excused himself and met a group of people at the same café. 

''They were joined by Jonah Lomu who shook hands with them. He left a short time later,'' McCall said.

Lomu has testified in the trial last week of being angry at having his name tarnished in the alleged fraud. The court also heard evidence from National Party president Peter Goodfellow.

The trial continues.

Clarification: Cabinet Minister Gerry Brownlee did not testify in this case. He has spoken about it but was not a witness.