Greek Tycoon in Uncharted Waters

A defamation lawsuit involving one of the world’s leading shipping magnates and classified U.S. government information could be the latest stumbling block in nuclear negotiations between Iran and the P5+1 countries. Just days after nuclear talks in Vienna came to a close, the Obama administration ordered a temporary ban on the release of documents from an Iran-focused advocacy group, stating that the files were likely to contain secret information. The move to block documents from United Against a Nuclear Iran (UANI) from becoming public could result in renewed diplomatic tensions between Washington and Tehran.

As one of Greece’s wealthiest people, Victor Restis is used to an extravagant lifestyle. Aged just 46, the Jewish billionaire business tycoon has dabbled in almost every sector around. Though the name is best known for its association with the shipping industry, Victor Restis has also worked in the media, the property market, the energy and food industries and banking. Overall, it’s fair to say that Victor’s business ventures have been lucrative and smooth sailing for a number of years. But now, it may be that his luck has run out.

Since the start of 2013, Victor has faced not one but two legal charges against him, neither of which look set to be resolved quickly. When UANI accused Restis of doing illegal business with Iran, he responded by filing a defamation suit. As part of his defence, Restis’ legal team demanded the release of UANI’s internal documents—and here’s where the Obama administration stepped in.

According to UANI, Victor Restis sent three cargo ships belonging to his company, Enterprises Shipping and Trading SA (EST)—the Bergen Max, Helvetia One and African Wildcat—to Iranian ports to do business there eight times between March 2012 and January 2014, thereby violating international sanctions. The group has launched a number of “name and shame” campaigns against people doing business with Iran, and this time it had Victor Restis in its sights.  

What makes this allegation so surprising is the Restis family’s Jewish ancestry and long-standing commitment to the Jewish community in Greece. Bella Angel Restis, Victor’s mother, is president of Greece’s Jewish Association and a member of the Jewish Community of Rhodes. She also holds the title of great benefactress to the Jewish Museum of Greece.

Current U.S. sanctions prohibit almost all trade with Iran; the only exception is activity that is “intended to benefit the Iranian people”. This includes exports of medical and agricultural equipment and humanitarian assistance. The U.S. government has also blacklisted a number of “front companies” that they say are controlled by Iran’s top leaders.

Mr Restis has denied the allegations against him, stating the reason the vessels were at the Bandar Imam Khomeini port is because they were delivering humanitarian aid. But even non-sanctioned cargo are at risk of sanctions if they call at terminals operated by Tidewater Middle East, a sanctioned entity under U.S. law because of its links to Iran’s Revolutionary Guards and its weapons program.

In addition to filing a defamation suit against the head of UANI, Mark Wallace, in July 2013, Restis has recently asked the judge presiding over the case that Thomas S. Kaplan, a billionaire philanthropist, provide documents that Restis believes are crucial to proving his innocence. But according to the Obama administration, the emails and donor lists in question may contain law enforcement secrets.

UANI has alleged that Mr Restis offered the lobby group a $400,000 donation and a board seat to Mark Wallace on EST’s affiliate company Golden Energy, but the businessman has said it was done as a sign of good will, to prove to the group that it wasn’t involved in unlawful trading and so that its CEO could learn about the tanker business.

A Culture of Corruption

Mr Restis was also arrested for money laundering and embezzlement in 2013, as part of an effort by Greece’s finance minister, Yannis Stournaras, to take a harder line on tax dodgers in Greece.

Tax evasion is an ongoing problem in Greece, fueled by government apathy in recent decades. One of the conditions of the country’s €240bn euro international bailout on behalf of the European Union (EU) and the International Monetary Fund is that the Greek government has been told it must reverse this trend. According to data from Greece’s Finance Ministry, a total of €63bn worth of taxes, loans and fines went unpaid in 2013.

As part of this pledge, wealthy and politically influential businessmen, previously seen as “untouchable” by the state, must also being targeted. This change in policy towards the Greek plutocracy led to the arrest of Victor Restis in July 2013.

Although hundreds of businesspeople have been arrested on tax-related charges, Restis was the first shipowner to face prosecution. The authorities have accused him of money laundering and embezzlement from First Business Bank (FBB), a small Athens-based lender in which his family were majority shareholders. According to a report by Greece’s central bank and an anti-money laundering attorney, he used his 64 percent stake in the bank to embezzle €5.8m from the bank by using offshore companies to move the funds abroad. He is also being investigated for about €500m worth of business loans made by the bank. The FBB had its licence revoked in May 2013 after it failed to raise sufficient private funds; its healthy assets were absorbed into the National Bank of Greece.

Restis denies all charges against him and made a €6.6m deposit to the state’s “Deposits and Loans Fund” as a sign of his cooperation. According to Greek law, tax evaders are given more lenient treatment if embezzled money is repaid.  The shipowner spent four months in jail for the allegations against him, and was released on bail in December 2013. He has been prohibited from leaving Greece and must frequently report to the police until his trial takes place, the date of which is still unknown.

A warrant for the arrest of Anastasios Pallis, an ex-associate of Victor Restis, was also requested in connection with a loan scandal allegedly facilitated one of Restis’ offshore companies. Although the two are now thought to be enemies, Restis was in fact the best man at Pallis’ wedding. When Pallis handed himself over to authorities in December 2013, police raided his house and found weapons, including AK-47s and assault rifles, as well as Nazi paraphernalia; it is thought he may be connected with Golden Dawn, the extreme right-wing political party in Greece.

The UANI allegations against Victor Restis—illegal trade with Iran—are unrelated to the charges he faces in Greece regarding money laundering and embezzlement. But one of his conditions of bail for the latter charge is that he cannot leave Greece until his trial takes place, meaning he he cannot be present at the UANI hearing in the U.S. In the meantime, Mark Wallace of the UANI will stand trial for defamation in Greece.

Greece’s Shipping Industry: Revered and Resented

Prior to these two allegations, Restis’ business dealings were widespread and successful. His first and primary focus was the shipping industry. His father, Stamatis Restis, had set up the Restis family business, shipping company EST, in 1974. Victor Restis took over the freight business after his father died of a heart attack at his home in Athens in 2004. At this point the company made up a fleet of about 50 ships including dry bulkers, tankers and reefer vessels; it has now acquired more than 90 vessels. This makes it the fifth largest shipping group in Greece and its proprietor, Victor Restis, is the 56th most influential person in shipping according to Lloyd’s List, a weekly shipping journal. Bulkers and tankers make up most of its fleet, which operates around the world and employs approximately 3,000 people. Restis is also a major shareholder in Seanergy Maritime, a bulk carrier operation listed on New York’s Nasdaq stock market.

Greece has been a maritime nation for centuries, and shipping has been a key pillar in the country’s economy. Its fleet is ranked number one globally in terms of international merchant fleet capabilities and in 2013, Greek shipowners owned 16.16 percent of the world’s fleet, which between them equated to over 3,600 ships. The plutocracy running the sector, an estimated 900 families or so, are both revered by ordinary Greeks for the billions of dollars they bring in in revenue to the country every year, but resented for the lavish lifestyles they lead; this has been particularly true since 2008, when the recession caused financial ruin on Greece and its people.

Every government since the 1940s has given shipowners favourable tax terms through clauses in the Greek constitution but this was overturned in February as a consequence of the increasing pressure placed on authorities to appease the public’s frustration and expose corruption. A report by Germany’s Der Spiegel newspaper noted that since 2002, over €140bn made in profit by Greek shipowners went untaxed, and that there were 58 special measures written into Greek law giving shipowners preferential treatment. 

The current tax law, which states shipowners must pay triple their taxes in order to aid the economy’s recovery, overturned an accord reached between government officials and shipowners in 2013 in which they agreed they would pay double their taxes for three years.

Interwoven Interests

Victor Restis has continued his other business ventures, including his substantial media interests. The Restis family have minority shares in Mega Channel, Protothema, a popular tabloid in Greece, and in a company called Teletypos, which runs Greece’s largest private television station. Restis also started MTV Greece and owns Smart TV.

The Restis Family is one of several ship-owning families that hold shares in the media. This  “interweaving of interests,” or “diaploki,” particularly across business and politics, has been a feature of Greek society for decades. Aristides Alafuzo, head of the Alafuzo shipping family, owns Kathemirini, a widely-read Greek daily newspaper.

Restis founded Assos Capital and Assos Property Investors, making his mark in the property sector too. He also owns Greece’s Porto Hydra Hotel and The Mall, one of Bulgaria’s biggest shopping centers, located in Sofia, as well as numerous properties on the outskirts of Athens. He is also the proprietor of a small island called Sveti Stefan, off the coast of Montenegro, which has been a holiday hotspot for celebrities since the 1970s and is one of the main shareholders in Bulgaria’s Carrefour, the French retailer.

And, although Victor Restis has the biggest role in running the family business, other family members command considerable commercial interests in the country. His two sisters, Katia and Claudia Restis, have become more involved in the shipping business since their brother was charged with money laundering. After her brother’s arrest in 2013, Katia announced that business at EST would continue as normal until her brother’s innocence was proven. She also serves on the Board of Directors of The American Club, and both sisters are trustees for the Macias Restis Foundation, a charity set up by the family and which provides aid to underprivileged children in South Africa.  

Without a doubt, there is a measure of uncertainty in Restis’ immediate future. With two separate trials approaching, it remains to be seen how the Restis family name will fare, though it’s reasonable to believe its financial future will remain solid. However, being accused of corruption and financial misdeeds in his own country is one thing; alleged illegal dealings with Iran is quite another—even if he is cleared, the association could be damaging. Yet it’s clear that, whatever the outcome, he is a man with influence. After all, a defamation suit that commands the attention of the U.S. government means he will remain in the public eye for some time to come.