With Greek prosecutors already scouring a list of 33 politicians to determine how they obtained their wealth, the government now is probing names on another list – this one of some 400 Greeks who’ve bought luxury homes in London, trying to determine if they are laundering money or evading taxes by putting their wealth into real estate.
The New York Times reported that many of the homes being bought were in the range of about 1.88 million euros, or $2.41 million, and that the list – which is being kept secret by the government after the list of politicians being investigated was leaked to the press – includes prominent businessmen, bankers, shipping tycoons and professional athletes.
At the request of the Greek government, British financial authorities recently turned over the names of Greeks who have bought and sold London properties since 2009. “These people have money and they are known — but it is not clear yet if they have violated any laws,” said Haris Theoharis, an official in the Greek Finance Ministry.
Tax investigators have been examining the list to see whether there is any overlap between those who bought London properties and those already identified as being tax cheats.
The Swiss Banking Association recently refused to release the names of wealthy Greeks keeping money in that country, and the Times said many wealthy Greeks are choosing other methods to ferret their riches out of the country, including to Singapore, offshore accounts or even the country of Georgia.
Prime Minister Antonis Samaras, under pressure from international lenders, is about to impose another $14.6 billion in pay cuts, tax hikes and slashed pensions but – as did previous governments – has failed to make a dent in collecting some $70 billion in monies owed by tax cheats.
Studies have shown that the country may be forgoing as much as 30 billion euros ($38.57 billion) a year in uncollected taxes, with a significant portion of that amount having been shipped out of the country as the affluent seek shelter from Greece’s financial storm, the newspaper noted.
What got the attention of the government – and even uber-wealthy Londonites – was that Lavrentis Lavrentiadis, a Greek banker now under investigation for alleged financial wrongdoing – was looking last year to spend as much as $100 million, or 77.7 million euros, on a London home, according to the Times.
The Greek Council of Appeals Court Judges in April barred him from leaving the country, deeming him a flight risk, as authorities look into 700 million euros ($900 million) in questionable loans made by Proton Bank, in which he is the main shareholder.
The government, suspecting that Lavrentiadis may have moved money out of the country, is now investigating his activities to determine whether he engaged in fraud and money laundering. He has denied the accusations.
The Times said that London, long a magnet for foreign real estate investors, has become a special focus for Greek officials trying to track down money taken from the country. “Greeks are panicking,” Sandy Triantopoulou-von Croy of EPPC, a real estate firm in London that does a lot of work with Greek clients, told the paper. “They just do not know what to do with their money.”
Many of the recent buyers hail from Greece’s professional classes, including lawyers, doctors, accountants and midlevel bankers who are paying $484,000-$808,000 for modest apartments in the United Kingdom’s capital city. That is 376-628,000 euros. Theoharis said that London properties represented only a small portion of the billions Greeks had shipped out of their country since 2009.
In 2011, according to government figures, Greeks sent 6 billion euros ($7.71 billion) to foreign bank accounts and that in the first half of 2012 that figure had already reached 5 billion euros, or $6.42 billion.
Lavrentiadis was not the only bank chief to invest in London real estate. Theodoros Pantalakis, a former chief executive of the failed Agricultural Bank of Greece that had to be privatized because of bad loans – including to Samaras’ New Democracy party and one of his coalition partners, the PASOK Socialists – transferred 8 million euros ($10.26 million) abroad to buy property in London.
Pantalakis said he reported the transaction and did nothing wrong, but even the specter of rich Greeks cavorting around the world with their wealth while their country is going under has rankled Greeks who feel it is injustice that they are suffering and sacrificing while the country’s politicians and elite are prospering.
Dora Bakoyianni, a Member of Parliament from Samaras’ New Democracy party, asked colleagues to lift her parliamentary immunity so she said that “no doubts linger” as she attempts to clear her name and that of her husband, who is facing felony charges over the deposit of $1 million in a foreign bank account and not declaring it.