Loizos Michaels says casino exec pursued him

01:45, Nov 13 2012

Accused fraudster Loizos Michaels has told the Auckland District Court that he wanted nothing to do with a casino executive from whom he allegedly swindled hundreds of thousands of dollars.

Michaels has pleaded not guilty to 31 fraud charges in relation to $3 million of losses. Taking the stand for a second day, he systematically denied the accusations that have been levelled against him, describing some as "rubbish".

He also presented his side of the story on his relationship with one of the Crown's key witnesses, former Christchurch Casino chief executive Stephen Lyttelton.

Lyttelton said Michaels posed as a corporate raider for the Macau-based Ho family, who own international casino empire Melco, and fooled him into investing money in fictitious enterprises.

He also claimed that Michaels had led him to believe there was a contract out on Lyttelton's head, and that he corresponded with a mysterious Japanese backer known only as "Uncle" through an ear implant.

Defence counsel Peter Kaye asked Michaels if he pretended to speak into the earpiece in front of others.

"Not at all. I use a telephone to talk to people," he said.

Lyttelton first met Michaels after he complained about coffee whilst gambling at the Christchurch Casino. Lyttleton began meeting him daily, and said Michaels had told him he was conducting due diligence on the casino.

But Michaels told the court Lyttelton had simply been an unwelcome distraction while he was trying to use the gaming machines.

"He was bothering me. I didn't want him around me."

Lyttelton quit his job in June 2007, and formed a company called New Zealand Casino Services, allegedly to takeover SkyCity's assets at Michaels' request.

Michaels denied offering Lyttelton a job as international business director with Melco, or a promised salary that rapidly escalated from US$1m ($1.2m) to US$12m.

"Stephen Lyttelton knew the people from Melco. I did not."

He said Lyttelton planned to discredit the Christchurch Casino, where he had been unhappy with his job, and start up an online gaming company.

"Nobody liked Mr Lyttelton. Everyone was afraid of him at the casino."

There was also talk of getting a permit for a new casino at Gulf Harbour, which Michaels said was not his idea.

"The plan was that once he was in the position to apply for a casino licence ... [National Party President] Peter Goodfellow and [Cabinet Minister] Gerry Brownlee would add their names to the application."

Goodfellow and Brownlee were both founding directors of NZ Casino Services, but extricated themselves soon after it was set up.

Michaels claimed Lyttelton fed the Christchurch media with stories about problems at the casino to drive down share prices, and always had articles sent to him to be checked before publication.

He admitted arranging a motel for Lyttelton to stay at north of Auckland city, and guaranteeing the bills while he stayed there.

But he denied ever having asked Lyttelton to put in money as a sign of good faith, or asking associates to collect money him.

"I was with Stephen almost every day. If he wanted to give me money, he would give it directly."

Yesterday, Michaels' lawyer said the defence would essentially boil down to the credibility of the Crown witnesses against Michaels himself.