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Sunday, May 10, 2015

SHOPPING MALL DEVELOPER ARRESTED FOR ALLEGEDLY TRYING TO CONCEAL $17 MILLION IN ASSETS DURING BANKRUPTCY

FROM:  U.S. JUSTICE DEPARTMENT
Thursday, May 7, 2015
Arizona Shopping Center Developer Arrested for Fraud and Bankruptcy Crimes in Alleged Scheme to Conceal $17 Million in Assets

An Arizona shopping center developer was arrested today on fraud and bankruptcy charges in connection with a scheme to allegedly conceal his control of approximately $17 million in assets.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney John S. Leonardo of the District of Arizona and Inspector in Charge Gary Barksdale of the Criminal Investigations Group of the U.S. Postal Inspection Service made the announcement.

Alex Papakyriakou, aka, Alex Papas, 57, of Phoenix, Arizona, was charged in an indictment in the District of Arizona with eight counts of bank fraud, one count of conspiracy to commit bankruptcy-related offenses, four counts of concealing assets in bankruptcy, one count of making a false oath in bankruptcy and three counts of falsification of records in bankruptcy.

According to allegations in the indictment, Papas and a now deceased business partner organized over 200 limited liability companies from 1997 to 2008 to develop shopping centers and other real estate projects in Arizona and elsewhere, funded by approximately $150 million from investors and $250 million in bank loans.  When the companies encountered financial difficulties in 2007 and 2008, Papas allegedly created Cobea Associates, LLC (Cobea), a company nominally owned by his sister in South Africa, but actually operated and controlled by him to shield his valuable family assets from investors and other creditors.  Papas then allegedly transferred title of his assets to Cobea, including a luxurious home in Paradise Valley, Arizona, a vacation beach house and a condominium in Laguna Beach, California, and a business entity in Scottsdale, Arizona, which bought and sold expensive vintage collector automobiles.

From June 2008 through approximately June 2013, Papas allegedly deceived various banks regarding the transfer of the assets and his financial condition to both obtain new loans and extend existing loans secured by his assets.  Additionally, in 2011, Papas filed for bankruptcy, claiming that he had less than $1 million in assets and over $144 million in liabilities, while allegedly concealing and denying his control of the millions of dollars in assets he transferred to Cobea.

The charges contained in an indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

The case is being investigated by the Criminal Investigations Group of the U.S. Postal Inspection Service.  The case is being prosecuted by Senior Litigation Counsel Jack Patrick and Trial Attorney Sarah Hall of the Criminal Division’s Fraud Section, with the assistance of Assistant U.S. Attorney Raymond Woo of the District of Arizona.