Greek Shipowner Torched Tanker in $77 Million Fraud, Judge Says

A Greek shipowner orchestrated a plan for men posing as pirates to attack and set fire to his tanker, in an elaborate fraud to seek $77 million in insurance money, a London judge found.

In 2011, Marios Iliopoulos lured the ship’s master and chief engineer, as well as seven Yemeni coast guards, into a conspiracy off the coast of Yemen still being investigated by the City of London Police, Judge Nigel Teare ruled Monday. Drawing a line under years of legal battles, the judgment dismissed a claim by Suez Fortune Investments, a company linked to Iliopoulos, and its Greek bank to force a syndicate of insurers to pay out.

“The constructive total loss of Brillante Virtuoso was caused by the wilful misconduct of the owner, Mr. Iliopoulos,” Teare said. “The motives of the armed men were not to steal or ransom the vessel or to steal from the crew, but to assist the owner to commit a fraud upon underwriters.”

The Brillante Virtuoso’s destruction was an unlikely tale, living long beyond the fake pirate attack. A British surveyor who was hired to investigate the matter was murdered in Yemen while conducting his probe.

Lawyers for Suez Fortune and insurer Talbot Underwriting Ltd., which won the case, didn’t respond to emails seeking comment. Iliopoulos was not reachable when Bloomberg News emailed and called his ferry company in Greece.

On Monday, Teare said Iliopoulos, who had bought eight tankers between 2004 and 2008, initiated the scheme because the vessel started losing money after the freight market collapsed in 2008.

“Iliopoulos had a motive to want the vessel to be damaged by fire, namely, the making of a fraudulent claim for the total loss of the vessel in the sum of some $77 million which, if successful, would solve the serious financial difficulties in which he and his companies were at the time,” Teare said.

In his judgment, which is longer than J.D. Salinger’s “The Catcher in the Rye,” Teare cast doubt on Iliopoulos’s reliability — something already done by another judge in previous hearings. He failed to testify in these hearings and also tried to conceal relevant files, Teare said.

“Iliopoulos has a penchant for charades,” Teare said of the businessman and car-racing enthusiast. “That is apparent from the lengths to which he went to disguise his failure to disclose the archive of electronic documents. Thus the ruse which, on the underwriters’ case, he planned in the present case appears to be consistent with his known character.”

The lurid details of the case continued after the fake pirate attack, which included the assailants detonating a grenade to start the fire. Iliopoulos had argued that lawyers for Talbot Underwriting Ltd., the insurers, had broken the law by using private investigators to try to obtain medical records, passport details and flight manifests for him and his business associates. The insurers’ lawyers accused him of being behind the theft of those e-mails, which led to a hostile exchange in which Iliopoulos warned that those making allegations against him would be held responsible.