Banker faces $17 million fraud charges

Stephen Versalko leaves the Auckland District Court yesterday afternoon. Photo / Sarah Ivey

An ASB Bank investment banker is facing fraud charges involving nearly $18 million.

Stephen Gerard Versalko, 51, was arrested yesterday and appeared in the Auckland District Court to face three charges laid by the Serious Fraud Office after a three-month investigation.

The SFO alleges that as a senior investment adviser, Versalko defrauded nearly 30 wealthy ASB clients of $17,763,110 over nine years until he was fired by the bank in August.

The amount allegedly taken is more than the $16.9 million fraud by a staff member of the Otago District Health Board in New Zealand's largest proven employee theft.

In court yesterday, defence lawyer Stuart Grieve, QC, said Versalko had been co-operating with the SFO since the alleged offending came to light in August.

He successfully sought for his client to be released on bail without entering a plea. Versalko is to re-appear in the Auckland District Court on January 26.

Mr Grieve also asked Judge Emma Aitken to suppress the specific allegations made by the SFO in a summary document obtained by the Weekend Herald as there was a possibility the media would report them as fact.

He did not seek name suppression for Versalko.

The document outlines how Versalko allegedly defrauded the bank customers, what he allegedly spent the money on, how he was caught and how he described himself to SFO investigators.

SFO prosecutor Patrick McCann argued for the allegations to be published, under the principle of open justice.

But Judge Aitken ruled that because she had no confidence in the media to report the summary as unproven allegations, not fact, it would be suppressed.

She allowed the charges against Versalko to be reported.

They allege that Versalko obtained $12,958,608 from 17 ASB Bank clients by conducting 68 fraudulent transactions between October 2003 and August 2009.

A second charge accuses Versalko of offering fictitious investment opportunities to obtain $1,074,077 in 12 fraudulent transactions between August 2000 and September 2003.

The third charge is that Versalko obtained $3,730,423 from 28 ASB clients by conducting 43 fraudulent transactions between October 2003 and April 2009.

Versalko was granted bail to a Takapuna address.

As a senior investment adviser, Versalko would have been paid an annual six-figure salary. He is now unemployed.

The ASB Bank refused to comment on the charges but said customers who had lost money had been repaid.

SFO director Adam Feeley said the alleged fraud by Versalko, if proven, would be "one of the larger employee frauds in New Zealand in recent years", and the agency had responded with a speedy and thorough investigation.

"In tough market conditions there is a legitimate public expectation that law enforcement agencies will act in a timely manner to prevent or minimise the impacts of crime on society."

In March, Otago District Health Board IT manager Michael Andrew Swann was jailed for 9 years - a record for an SFO prosecution - after being convicted of stealing $16.9 million through false invoices.

THE CHARGES
* Obtained $12,958,608 in 68 fraudulent transactions between October 2003 and August 2009.
* Offered fictitious investment opportunities to obtain $1,074,077 in 12 fraudulent transactions between August 2000 and September 2003.
* Obtained $3,730,423 in 43 fraudulent transactions between October 2003 and April 2009.