Greek shipping magnate ordered to pay $1.5M to IRS

(Published by the Washington Post)

By Associated Press, Thursday, January 16, 12:18 AM

NEW ORLEANS — A Greek shipping magnate who remained a fugitive for more than a decade was ordered Wednesday to pay more than $1.5 million in restitution to the Internal Revenue Service after pleading guilty in New Orleans to filing a false tax return.

U.S. District Judge Helen Berrigan also on Wednesday sentenced 78-year-old Lucas Ktistakis to three years of supervised release and ordered him to pay a $10,000 fine. Ktistakis had faced up to three years in prison, but Berrigan sentenced him to time he already has served in custody since his February 2013 arrest in Germany.

A court filing Wednesday says Ktistakis would be immediately released from custody.

Last week, defense attorneys filed a request for Berrigan to depart from sentencing guidelines and show their client some leniency. They filed the request under seal, saying it contained “highly confidential material that would pose significant danger to various persons and concerns if disclosed publicly.” They didn’t elaborate.

Ktistakis and his wife, Kathryn, were charged in 2003 with purchasing more than $500,000 worth of cars and property in Greece with money diverted from their companies, including New Orleans-based Sunrise Shipping Agency Inc. Authorities alleged they diverted the company money without reporting it as income to the Internal Revenue Service.

Ktistakis and his wife were residents of Metairie, La., from 1989 through 1997 before moving to Chagrin Falls, Ohio.

Billy Gibbens, one of Ktistakis’ attorneys, has said his client had been living in Greece for more than five years at the time of his indictment. A prosecutor has said Ktistakis knew he was under investigation when he left the U.S.

Ktistakis had fought his extradition for six months before he was returned to the U.S. last year. He pleaded guilty in October.

The couple’s indictment says they controlled an “international shipping enterprise” with companies that owned, managed and serviced cargo ships. More than $200 million in freight revenue and other funds were transferred into the bank accounts of three of those companies during the years they lived in New Orleans, according to the indictment.

The indictment lists eight transactions in which Ktistakis allegedly diverted a total of $388,000 in company funds to purchase property in Greece. His wife was accused of using around $40,000 in diverted money to buy a Mercedes Benz in 1995 and another $35,000 to buy a Volvo the following year. The couple also allegedly used nearly $60,000 to buy their daughter a Mercedes Benz.

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