Banker Arrested on NZ$ 17 million Fraud Charges

Citadel Advantage’s Correspondent in New Zealand reports that an investment banker from that country’s ASB Bank has been arrested on fraud charges totaling nearly NZ$ 18 million (USD 12.8 million).

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

The Serious Fraud Office alleges that as a senior investment adviser, Versalko defrauded nearly 30 wealthy ASB clients of NZ$17,763,110 over a nine year period until he was fired by the bank last August.

Defence lawyer Stuart Grieve, said that Versalko had been co-operating with the Serious Fraud Office since the alleged offending came to light in August. Mr. Grieve successfully sought for his client to be released on bail without entering a plea. Versalko is scheduled to appear in the Auckland District Court on January 26.

Mr. Grieve also asked Judge Emma Aitken to suppress the specific allegations made by the Serious Fraud Office as there was a possibility the media would report them as fact. These allegations appeared in a document that outlined how Versalko allegedly defrauded the bank customers, what he allegedly spent the money on, how he was caught and how he described himself to Serious Fraud Office investigators.

Serious Fraud Office 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.

The charges against Versalko allege that he obtained NZ$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 NZ$1,074,077 in 12 fraudulent transactions between August 2000 and September 2003.

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

The ASB Bank refused to comment on the charges but said customers who had lost money had been repaid. Serious Fraud Office 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 minimize the impacts of crime on society."