Fraud accused claimed crime links

MATT NIPPERT
Last updated 07:48 06/11/2012
Loizos Michaels
Sunday Star Times
LOIZOS MICHAELS: On trial for fraud.

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An Australian martial arts instructor has told Auckland District Court how an alleged conman intimated he had connections with the mafia, claimed to communicate with a Japanese crime gang through an earpiece and convinced him to hand over nearly $200,000.

Gold Coast kung fu teacher Adam Hanson gave evidence yesterday for the Crown in the prosecution of Loizos Michaels, who has pleaded not guilty to 31 counts of fraud involving more than $3 million in losses.

Hanson told the court he first met Michaels in June 2004 during meetings to resolve a shareholder dispute at Queensland's Saltwater Studios.

The shareholder at the centre of the dispute died of a heart attack soon after that meeting, but Hanson said Michaels intimated he had used his connections to the Japanese Yakuza crime gang to orchestrate the death.

"He led us to believe [the] heart attack wasn't a heart attack, it was from a lethal injection from people that he knew," Hanson said.

Michaels presented himself as a broker to European stock exchanges with connections to the Cypriot mafia. He also claimed to be the heir to a wealthy shipping line in the Mediterranean.

Michaels convinced Saltwater Studios to pursue an ambitious business plan to build a A$100m (NZ$125m) studio complex and promised to use his connections to source funding, Hanson said.

He was offered a job with the new venture with an annual salary of A$300,000, but was told by Michaels he had to invest in the business as a "test of faith".

Hanson said he had instructions from Michael as to how much money he was required to invest. "He said his instructions had come through an earpiece he had, and he was being told by his people in Japan, the Yakuza."

He had paid more than A$160,000 in cash to Michaels in 2004, including A$36,500 left under the seat of a Marcos racing car.

Hanson said Michaels' constant demands for money had left him in poverty and led to most of his possessions being repossessed.

After his bank accounts were emptied, Hanson said Michaels told him he needed to travel urgently to Cairns. "He said my kung fu teacher had put a hit out on me and we had to get away from the Gold Coast."

The court earlier heard from Stephen Lyttelton, the former acting chief executive of the Christchurch Casino, who said Michaels convinced him to quit his job and work on his schemes. In 2006 he handed over more than $600,000 in exchange for a promised job paying an annual salary of $12m.

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After giving Michaels all his money he was sent to Macau, where he waited five months for a meeting with investors that never took place.

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

- BusinessDay.co.nz

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