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When 'Greek shipping tycoon' Achilleas Kallakis sold a penthouse in St James's Square for a reported world record £115 million in March last year, it seemed inevitable that he would soon seek to develop his other property on the Georgian Square.

Unfortunately, the tenants at number 32 were not aware of the illustrious history of Kallakis. And this week those tenants, the Chartered Institute of Public Relations, revealed that trusting their former landlord would result in a £700,000 loss this year.

Exactly one year after his record-setting property sale, Kallakis was under investigation by the Serious Fraud Office with relation to an estimated £1 billion spending spree that included the Victoria-based headquarters of Telegraph Media Group, the Home Office's Immigration & Nationality Directorate in Croydon and the Department of Health in Vauxhall.

He also owns Orion House, the tallest building in Covent Garden, which is home to financial PR consultants Maitland - for which he paid £80 million last year.

Indeed, from his rented apartment at Carlos Place in Mayfair and an address in Monaco, Kallakis managed to build up a 1.6 million square foot property portfolio - marginally bigger than White City!

The high stakes poker player, who is known as 'The Don' in gambling circles and once won $1 million in one game, even looked into acquiring the Honda Formula 1 racing team when it was put up for sale.

But behind the wealthy façade - his wife Pamela and four children lived in a £4 million townhouse on Brompton Square in Knightsbridge - all was not what it seemed.

Indeed, while a paid-for listing on Who's Who in America implies Kallakis is a wealthy international businessman and ambassador of the Republic of San Marino to the Sultan of Brunei - allowing him to use the honorary title 'His Excellency' - he is actually Stefan Michalis Kollakis, who 14 years ago was convicted of conspiracy to commit forgery. (It seems unlikely that he is related to the Greek shipping family that bears the Kallakis name.)

The conviction followed an investigation by Cambridgeshire police into claims that he was selling fake Hong Kong passports for $50,000 each.

When the police raided the home of Kollakis, who then worked in a Croydon travel agency, they found hundreds of forged documents and learned that he was selling false 'lordships' to Americans, Australians and Arabs for £85,000 apiece.

The Guardian reported that Kollakis bought the titles from the Manorial Society of Great Britain, subdivided them into districts and offered them for sale in newspaper adverts. He claimed that the process of splitting and increasing the number of titles, known as subinfudation, was legal, even though it was banned in 1290.

Kollakis actually used forged passports and false names to establish the Institution of Heraldic Affairs.

Eight years ago, the newly named Kallakis emerged on London's property scene and presented himself to commercial lenders, including Allied Irish Banks, as a bona fide developer. He failed to mention the string of failed ventures, including SS Manxman, a floating disco boat moored at West Waterloo Dock in Liverpool, and Dewsbury nightclub Electras.

Kallakis claimed that his company Atlas Management Corporation ran his Pacific Group property investments, which generated considerable rental income.

It was only when Allied Irish Banks conducted an internal review of its property portfolio last year that it uncovered some problems with the paperwork relating to Kallakis's companies.

When presenting the bank with proof that Atlas Management Corporation could repay the interest on any loans, Kallakis included paperwork claiming that a major property company had taken an interest in his mortgaged buildings and had guaranteed a minimum level of income.

It emerged that the paperwork was bogus. The Serious Fraud Office believes other 'financial institutions have also been deceived by the suspects'. AIB has since sold many of the properties on which the loans were secured, booking a £56 million loss.

Indeed the only beneficiaries from this sorry tale appear to be Westminster Council, who insisted that Kallakis pay £4 million into a fund for affordable housing when he acquired 7-8 St James's Square for £120 million in September last year, and applied for permission to convert the seven storey Thirties office block into eight flats.

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