Charalampos “Babis” Ziogas and his company MFS Shipmanagement are among defendants accused of fraud in a US court by plaintiffs who allege the shipowner entered into real estate contracts while aware that vessels in the MFS fleet were about to be foreclosed on by creditors.
Splash reported in July 2015 that 11 of MFS Shipmanagement’s vessels had been arrested by creditors in ports around the world. Almost all of the company’s vessels have been sold at auction since then. Today, the Athens-based company is beneficial owner of just one small bulker, Sider Pink (19,100 dwt, built 2006), and commercial manager of another, Navaho (17,400 dwt, built 1995), according to Equasis.
In their complaint, filed at the US District Court for the Southern District of New York, plaintiffs Gary Ryder and Sam Verkaik allege Ziogas misrepresented his own net worth and that of MFS Shipmanagement in order to obtain a lease on a two-building property in Greenwich, Connecticut. In doing so, they claim Ziogas “defrauded” them out of a contract with another party who was willing to lease the property at a higher price.
On May 8, 2015, Ziogas entered into a contract to lease the property from the plaintiffs, for which he agreed to pay $195,500 over an 11-month period. The contract was signed after lobbying from Ziogas’ agent Halstead Properties, part of luxury real estate group Terra Holdings. A Halstead employee, who claimed to know Ziogas and his wife personally, represented to the plaintiffs that Ziogas possessed assets of “over $200m” and he had had a “shipping empire for decades”, and collected “priceless” Chinese art.
Payments for the property were wired from MFS Shipmanagement’s account at a branch of Piraeus Bank in Athens, and from Ziogas’ company Halcyon Investments at a branch of Deutsche Bank in Geneva, Switzerland.
Just a month after signing the contract, MFS’ handysize bulker Judi (was Altai; 18,320 dwt, built 2000) was reportedly sold in Capetown for $2.1m by private treaty after the owner failed to pay the mortgage on the ship to its bank, plus payments to other creditors including crew.
Splash made several attempts to call and email MFS Shipmanagement at the time of publishing its story last year, but all emails bounced back and calls went unanswered. A visit in August 2015 to the company’s office in Kolonaki revealed the premises to be vacant and available for rent.
Ziogas and his wife Zenlyanaya are in the US on temporary visas, and have “imported” foreign nationals on tourist visas to live and work in the buildings in Connecticut, the complaint claims. It is illegal for those on tourist visas to work for income in the US.
The plaintiffs also accused Ziogas of “harbouring, concealing and shielding illegal aliens and non-citizens” inside the rental property. They have asked the court to issue a writ of mandamus to require the Immigration and Customs Enforcement division of the US Department of Homeland Security to “purge” the address of “illegal aliens”.
The plaintiffs also allege that Ziogas and his wife have defaulted on monthly contract fees, maintenance and upkeep costs for the property.