A tail of two Katz
A London-listed technology company has recently been censured by the Stock Exchange for failing to disclose the fact that its founder and former Chief Executive Oozi Cats was wanted for wire fraud in the US in the early 1990s.
An investigation by the company’s legal advisors linked him to a person going by the name of Uzi Katz. The company said that “evidence shows that an indictment was issued against Oozi Cats in the US and that this fact was knowingly withheld from advisers”. The company subsequently issued profit warnings and sold its automotive technology division. The London Stock Exchange fined the company and issued public censure over a breach of rules when it was listed on the Aim market. The rules stipulated that a director’s full name and any previous names must be disclosed.
This is not the first time a fraudster has used a change of name to cover their tracks.
Stephanos Kollakis was first convicted of fraud relating to the sale of bogus manorial titles to Americans in the early 1990s with his conspirator Martin Lewis. After their conviction, Kollakis changed his name to Achilleas Kallakis and Martin Lewis to Alexander Martin Williams. In the early 2000s, the pair began a new fraud under their new names. Using fake references, they borrowed large sums of money to purchase prime London properties, including one used by the Home Office in Croydon and the headquarters of the Telegraph Media Group in Victoria.
Kallakis lived an extravagant lifestyle, gambling in London's casinos (he was dubbed the “Don” after winning $1million in a poker game) and owning several luxury cars. He falsely claimed to be an "ambassador for the Republic of San Marino" and the author of Maritime Registries of the World and The Wonders of Italy, and to be a member of the development committee of the National Portrait Gallery.
The fraud began to unravel in 2008 when a German bank did some background checks on Kallakis. In 2013, he was sentenced to seven years imprisonment and Williams to five for defrauding a number of lenders.
So from Katz to Cats and Kollakis to Kallakis, both new names are clearly not far from the original but should have been spotted earlier. That said, both are less likely to be picked up than a change from Katz to Houndz.
Other name changes might be more difficult to spot but in the case of Kallakis, there were other tell-tale signs that should have been picked up. A few simple checks would soon have highlighted the fact that he was not a member of the development committee of the National Portrait Gallery, for example.
In one case I investigated, the fraudster simply stole the identity of another person. He changed the date of birth to his own but had failed to update the CV to account for the new birth date. The red flag was that, if the fake date of birth was to be believed, he had apparently made a significant scientific discovery in his early teens.
Once again, this underlines the need for proper due diligence. While my recent article focused on expert witnesses and employees, this focuses on carefully selecting business partners. And the lesson is this: never underestimate the lengths people will go to deceive you, whether it be a change of one letter, a play on words or wholescale identity theft. Never let your guard down or underestimate the importance of doing proper due diligence.
For more information about combatting corporate fraud and undertaking proper due diligence, please contact me on [email protected].
The views expressed in this article are those of the author(s) and not necessarily the views of FTI Consulting, its management, its subsidiaries, its affiliates, or its other professionals.