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Fugitive Greek Banker Held Without Bail

November 25, 1988

BOSTON (AP) _ A banker and publishing tycoon who is a fugitive from Greece was denied bail Friday after his lawyer argued that a $135 million banking scandal carries political overtones so strong the man had to flee for fear of his life.

George Koskotas ″is a subject of a controversy in Greece which is of cosmic proportions,″ said Ron Liebman, a Washington attorney representing the 34-year-old banker.

Koskotas fled Greece on Nov. 6 after being indicted on five counts of fraud and embezzlement alleging he siphoned more than $135 million from the Bank of Crete, of which he was chairman.

The scandal has embarrassed the government of Premier Andreas Papandreou and prompted the resignations of two government ministers.

Opposition conservatives have charged that Koskotas was allowed to escape so he would not implicate top government officials in illegal financial deals.

Liebman said the case carries ″political implications so severe that the very stability of the government of Greece appears to be hanging in the balance.″

But U.S. Magistrate Joyce Alexander denied bail after Assistant U.S. Attorney Victor A. Wild argued that bail should not be set in an extradition case and that any flight by Koskotas would have international repercussions.

A review hearing was tentatively set for Wednesday.

Koskotas made only a brief affirmative response after Alexander informed him of his rights. The courtroom was packed by more than 40 Greek journalists who flew to Boston aboard a government-chartered flight.

Koskotas was arrested Wednesday night by FBI agents at Hanscom Field in Bedford, about 15 miles west of Boston, after he arrived in a private jet. The arrest was made after the Justice Department received information from Greek authorities, department spokesman Thomas Stewart said in Washington.

In court Friday, Liebman said Koskotas was willing to pay a high bail and would submit to any restrictions but needed to be free to assist in the copious paperwork needed to fight extradition.

Liebman also suggested the proceedings be moved to New York, saying Koskotas’s wife Keti, a naturalized American, and the couple’s five children, who were born in the United States, would be staying with relatives there. Koskotas lived in the United States about 14 years before returning to Greece in 1979.

The Koskotas family went to Brazil after fleeing Greece, but Liebman said they decided to come to the United States because Koskotas believed Greek assailants had tracked him down.

″Mr. Koskotas, in imminent fear of his life, came to the one place in this world where he felt that he and his family would be safe from murder,″ his attorney said.

In a statement Friday, Christos Panagopoulos, the Greek consul general in Boston, said the Greek government has asked for Koskotas’ provisional detainment and extradition under a bilateral treaty between the two countries.

Koskotas had been ordered to remain in Greece while officials investigated alleged irregularities at the Bank of Crete.

In 1987, Koskotas was arrested in Washington on a 1980 warrant charging Social Security fraud. Those charges were later dismissed and the government is appealing. Bail was set at $1 million in that case.

In Athens, Spyros Papadatos, temporary commissioner appointed by the Greek government to investigate the case, said in a report that Koskotas used bank money for $200 million in loans without collateral and gifts to soccer clubs, athletes, business associates, journalists and friends.

Koskotas was suspended Oct. 20 as chairman of Bank of Crete. He had acquired a controlling interest in the bank in 1984 after working in its central Athens branch for two years as an accountant. He also built a publishing empire and bought a controlling interest in a top Athens soccer club.

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