Who is the ”old Greek man in Pensacola”? It is Louis Michael Pihakis who is an 80 year old Greek- American living in Pensacola Beach, Florida. He is charged by federal authorities in Arizona of stealing $5.8 million in a financial scheme, where he promised to investors, i.e. victims million-dollar payouts. He is also charged with conspiracy to commit wire fraud for his part in a scam that allowed him to receive $2.5 million.
How did he work? He asked his victims to invest in the trust and prove they have $10 million in a bank account to receive investments in their projects. In case they couldn’t prove they had that much money, the investors were told that they could pay a 4% fee instead. This money was used to purchase a “proof of funds” instrument from a bank; the trust was supposed to agree to provide funding for the investors’ projects. In order to convince his potential investors for his liability, Pihakis often presented to them bank statements from various banks showing hundreds of millions of dollars in accounts.
It was not until September that an FBI agent in Africa took a copy of one bank statement to Barclay’s Bank of Ghana. The bank statement read $677 million dollars in the account that Pihakis used to lure investors. Investors complained of years without seeing a single dollar. When Pihakis was pressed by investors to make good on the investments, he would tell them that money was tied up in a fund for a Thailand tsunami relief project, or because they needed more investors before he could begin paying.
In July 31, 2009, phone call were recorded by an agent. In one Pihakis tells a confidential informant that he already has $500 million dollars sitting in a Barclay’s Bank account. In July 2008, Scott Wallace of LHC Developments in Phoenix contacted the FBI to report that “Michael Louis” of Pensacola defrauded him of $400,000 dollars.
Where did the money go? According to the complaint, Pihakis used $345,000 of it for his personal expenses including mortgage payments. Another $200,000 was spent on the Birmingham, Alabama where his son, Ted Pihakis lives. The latter also received $1.7 million for personal expenses, including a $43,316 check for a 2010 Lexus and what appeared to be mortgage payments. Finally, the rest of the money were given back to the investors.
This was not the first time for Louis Pihakis has been arrested. Between 1970 and 1993 he was convicted several times and served time in federal prison for mail fraud, wire fraud and conspiracy charges.
Currently Louis Pichakis is allowed by Miles Davis, the U.S. Magistrate Judge, to remain free. He is obligated to wear an electronic monitor and surrender his passports.
Pihakis is to appear before a federal judge December 3rd in Phoenix, AZ.