NEWS > 08 February 2007

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Sydney Morning Herald - Sydney
08 February 2007

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The detective and the scammer'

THERE was a time, before the Police Integrity Commission started investigating, when things were going well for Con Kostakidis.

The fraud detective had just caught a man involved in the infamous Nigerian email scams.

The case attracted worldwide media attention, intrigued the public, and must have been a big coup for the assets confiscation unit, in which Kostakidis worked.

It was October 2003, and Nick Marinellis, the Australian link in the email scam, had been charged with fraud. He had ripped off people who believed they would be paid for allowing the African syndicate to send money to their accounts. But before the funds arrived, Marinellis had told them, they had to pay "processing" fees.

Marinellis is thought to have received $5 million from victims worldwide. The assets confiscation unit proudly announced it had seized $1.5 million in assets from Marinellis, including a $900,000 home in Cecil Hills and other properties. Kostakidis's boss, Inspector Jennifer Thommeny, said proceeds of the seizures would go to the Victims Compensation Fund.

But it is doubtful how much, if any, of the money from Marinellis's targets ever made it to victims of crimes in NSW; and a closer look reveals an intriguing connection involving the fraud detective, the Nigerian scammer and a bankrupt finance broker.

By all accounts Marinellis, a father of two on a disability pension, appeared to be dripping with money: he wore gold chains and had a dozen properties to his name and, only 10 weeks before he was arrested, had bought a six-bedroom home with a private cinema and a pool in Cecil Hills.

Marinellis, then aged 39, and his wife Artemis paid $900,000 for the property which was last sold less than four years earlier, in October 1999, for $365,000.

The people who sold it to Marinellis were relatives of Viron Hondros, a now bankrupt self-styled mortgage broker.

The NSW Crime Commission had placed a caveat on Marinellis's Cecil Hills property, his former home in Lurnea and several blocks of land in the country.

In May 2004 Marinellis pleaded guilty to 11 charges, four days after the Crime Commission dropped its caveat on the Lurnea property.

A few months after the guilty plea, the Cecil Hills property was sold, netting only $600,000.

What the asset confiscation unit had not told the public was that Marinellis had taken out a $720,000 mortgage on the home, leaving the bank $120,000 in the red, and police with nothing to confiscate.

The only people who seem to have done well from this deal must have been the Hondros family.

Viron Hondros had been the subject of a Herald report in which 11 fellow Greek Australians claimed he had ruined their lives by persuading them to take out large loans against their homes and investing the money in risky real estate deals. When the property market dropped, many of them were unable to pay their instalments and were left with nothing.

When looking into the Cecil Hills deal, Kostakidis and his fellow fraud detectives discovered Marinellis had received the mortgage by claiming to be lawfully employed, and by overstating his income.

Kostakidis charged him with making a false statement on the mortgage application.

It is unclear what, if any, role Mr Hondros, a mortgage broker, played in the deal on the Cecil Hills family home which was owned by his wife Angela, his daughters Nikie Koch and Helen El-Khoury, and Elias El-Khoury.

Mr Hondros, who told the Herald last year he had never done a dishonest thing in his life, has not been charged with anything in relation to Marinellis or any other property deal.

Now, just over three years after the spectacular arrest of Nick Marinellis, Con Kostakidis is charged with the same offence - making a false statement to help someone obtain a mortgage.

The Herald can reveal that since charging Marinellis, Kostakidis became involved in at least four business and property ventures with Mr Hondros and his daughters.

In November 2004 Marinellis was sentenced to at least four years and four months in prison, later cut by five months on appeal.

Two weeks later Kostakidis bought a 25 per cent share in a $920,000 Ashfield property with another man and a company linked to Mr Hondros.

Four weeks before Mr Hondros was declared bankrupt in November 2005, Kostakidis and another of Mr Hondros's daughters, Fiona, started a business, HK Investments, which has since been deregistered.

The following month, her sister Helen became briefly involved in the Oxford Street cafe Kostakidis now runs. The cafe was previously run by a woman charged with drug dealing whose assets police are believed to have confiscated.

The PIC alleges that Kostakidis falsely claimed to have employed Aisha Ahmed in the cafe, so she and fraud detective Rafiq Ahmed could get a home loan from the Commonwealth Bank.

Late last year Helen El-Khoury, nee Hondros, started another business with Kostakidis, KCS NSW Pty Ltd, which he is no longer involved with.

In another twist, Kostakidis is still a joint owner in a mortgage business called Auslend Homeloans with a woman, Polixeni (Jenny) Fountas, who had leased a shop part-owned by Mr Hondros.

No money was recovered from the Cecil Hills or the Lurnea homes. The other properties were largely empty blocks of land, bought for a few thousand dollars. It is unclear if any money from them flowed back into state coffers.

A week after his arrest, Marinellis wrote to his wife from prison: "Please contact the two officers ... tell them I have fresh information for them, the deal, honey, is to cut a deal to offer them a percentage of the game, say 20 per cent."

He also wrote to his girlfriend: "I am of the opinion that the two officers mentioned above are corrupt, and am willing to offer 20 per cent."

The letters were intercepted and Kostakidis charged Marinellis with intending to pervert the course of justice. The Court of Criminal Appeal emphasised there was no suggestion the police officers named by Marinellis were corruptible, or that his wife or girlfriend would have acted as had been requested.

Marinellis is eligible for parole in October. Kostakidis is due to face court today. The PIC is continuing to investigate the fraud squad detective.

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Article sourced from

Sydney Morning Herald - Sydney08 February 2007

The detective and the scammer'

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Sydney Morning Herald - Sydney
08 February 2007