Angelos Giannakopoulos allegedly built a business network resembling a set of Russian nesting dolls, with each doll concealing another inside it. So far, investigators have identified 433 companies in the network, each replaced by another when its tax identification number became unusable because of the debts it had accumulated.

Giannakopoulos, who was arrested in Ioannina while allegedly attempting to flee to Albania, according to the Hellenic Police (ELAS), is suspected of having caused losses of €120 million to the Greek state and the National Social Security Fund (EFKA).

Unpaid social security contributions account for €39 million of the alleged losses. A further €38 million is owed in repayable advances and taxes, while €43 million in value-added tax (VAT) has allegedly not been remitted. Of the companies identified, 340 were bakeries, cafés, bars, entertainment venues and strip clubs.

According to the investigation so far, an estimated 90% of Giannakopoulos’s business activity was conducted through so-called ‘phoenix companies’ — businesses that closed down leaving debts behind. They were headed by nominees, many of them poor or elderly people who provided their names and personal details to establish companies for the owner of the Choriatiko bakery chain. Most reportedly received between €500 and €1,000 for their participation.

Meanwhile, as police dismantle the network of companies, they are also investigating Giannakopoulos’s alleged connections, which are believed to extend across numerous institutions, including the police, tax authorities, EFKA, the Hellenic Public Properties Company (ETAD) and local councils.

Investigators are examining whether such connections helped the alleged criminal organisation evade scrutiny, buy time or secure contracts, particularly in tourist destinations such as Rhodes and Mykonos.

On Rhodes, police have reopened the file on a shooting incident that took place on the island last year. In light of newly uncovered evidence, investigators believe the incident may have been directly linked to the network’s activities.

Rhodes is a key focus of the police investigation. Through nominees acting as frontmen and shell companies, Giannakopoulos allegedly secured contracts to operate 28 beaches on the island. The nominees reportedly submitted excessively high bids, paid a substantial deposit and then stopped making payments. Once the debts became too large, the company would close and another would take over at the next tender.

According to information made public so far, Giannakopoulos allegedly arranged for a substantial proportion of the money he made to be transferred abroad. Spain and Denmark were the main destinations.

Alongside former trade unionist Rizos Rizos of the General Confederation of Greek Workers’ Electricity (GENOP-DEI), an ‘elite’ team of accountants reportedly played a pivotal role in running and organising the alleged criminal group. The accountants allegedly helped keep the ‘phoenix companies’ hidden from scrutiny and facilitated the movement of money both abroad and back into Greece, where it was reinvested as capital in Giannakopoulos’s legitimate businesses.

The money returning to Greece was channelled into companies and accounts linked to Giannakopoulos, whose business interests had expanded beyond bakeries and their subsidiaries into the operation of tourist sites. His activities extended to both Rhodes and Mykonos, while he also continued to operate entertainment venues and strip clubs, where his career had begun.

The indictment being prepared against him is also expected to include offences related to pimping. However, such offences are now classified as misdemeanours rather than felonies.

According to private-sector trade unionists, numerous complaints about alleged violations by the bakery chain had been recorded since the Covid-19 pandemic began in 2020. These included underreporting of working hours and the failure to pay the full amount of social security contributions.

Trade unionists cited reports that, during lockdown, employees were allegedly required to continue working while carrying documents stating that they were going to the bakery to shop.

Workers had also reportedly complained that they were working 10-hour shifts despite being officially registered as part-time employees for just four hours a day.

Investigators are now examining what action was taken in response to these complaints, who handled them, what steps were taken and whether any further action followed.