Formers ASB advisor jailed
(22 March 2010 – New Zealand) A former advisor for the New Zealand subsidiary of Commonwealth Bank of Australia, ASB, has been jailed for defrauding wealthy customers of nearly NZ$18 million (A$14 million), in the largest case of employee theft in New Zealand history.
Stephen Gerard Versalko, 52, married with three children, lived the high life for nine years after siphoning NZ$17,763,110.19 off 30 wealthy clients from ASB Bank, where he worked.
Mr Versalko convinced ASB clients to invest in a scheme promising higher interest rates with no tax, no administration fees and the funds on call.
Mr Versalko was a master of using ASB's computer system to transfer money leaving no trace of the transactions. He also forged account statements which he signed and sent to the victims to fool them into believing their investments were safe.
The targets for the fraud were largely elderly women living overseas who were unsophisticated about money and did not monitor their accounts online, the Serious Fraud Office prosecutor, Patrick McCann, said.
In August last year, a woman who had invested more than NZ$3 million with Mr Versalko became uneasy about the fact he was the only staff member she had dealt with.
At about the same time, the investor watched a documentary about fraudster Bernie Madoff that rang alarm bells. Mr Madoff's technique of fobbing off his victims reminded her of Mr Versalko.
A phone call to ASB confirmed the investor's worst fears; her multimillion-dollar investment portfolio was fictitious.
When confronted by the bank about the fraud Mr Versalko admitted it immediately.
At the end of last week, Mr Versalko was sentenced in the Auckland District Court to six years in prison, with a minimum-non parole period of four years.
The ASB said it had since introduced additional processes and practices to further strengthen its security and protect customers so that this situation does not happen again.
The bank has reimbursed funds to all the clients that were defrauded and said it would honour a further NZ$1 million in promised interest payments.
The fraud contributed to ASB's first loss in 20 years, for the first half of the current financial year.
Mr Versalko convinced ASB clients to invest in a scheme promising higher interest rates with no tax, no administration fees and the funds on call.
Mr Versalko was a master of using ASB's computer system to transfer money leaving no trace of the transactions. He also forged account statements which he signed and sent to the victims to fool them into believing their investments were safe.
The targets for the fraud were largely elderly women living overseas who were unsophisticated about money and did not monitor their accounts online, the Serious Fraud Office prosecutor, Patrick McCann, said.
In August last year, a woman who had invested more than NZ$3 million with Mr Versalko became uneasy about the fact he was the only staff member she had dealt with.
At about the same time, the investor watched a documentary about fraudster Bernie Madoff that rang alarm bells. Mr Madoff's technique of fobbing off his victims reminded her of Mr Versalko.
A phone call to ASB confirmed the investor's worst fears; her multimillion-dollar investment portfolio was fictitious.
When confronted by the bank about the fraud Mr Versalko admitted it immediately.
At the end of last week, Mr Versalko was sentenced in the Auckland District Court to six years in prison, with a minimum-non parole period of four years.
The ASB said it had since introduced additional processes and practices to further strengthen its security and protect customers so that this situation does not happen again.
The bank has reimbursed funds to all the clients that were defrauded and said it would honour a further NZ$1 million in promised interest payments.
The fraud contributed to ASB's first loss in 20 years, for the first half of the current financial year.
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