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."
Sunday, 20 December 2009
Wednesday, 16 December 2009
Mobile payments in Kenya
The increased use of mobile phone-based money transfers to pay for goods and services is promising to really get electronic commerce going in Kenya. Read this thought provoking article by Victor Juma in AllAfrica.com.
allAfrica.com: Kenya: Mobile Money Beats Credit Cards in the Retail Market (Page 1 of 1)
allAfrica.com: Kenya: Mobile Money Beats Credit Cards in the Retail Market (Page 1 of 1)
Fraud & Operational Risk High on 2010 Forecast
"10 Faces of Fraud for 2010" is an interesting forecast for the coming year in terms the ten most predominant types of fraud that institutions and their customers can expect to see in 2010, according to industry experts. The fraud “hit parade” includes ACH and Wire Transfer Fraud, ATM Skimming, Phishing Schemes and their Variations, Cheque Fraud, Mobile Phones, “Insider” crimes.
Read the full article from From Bank Info Security at;
10 Faces of Fraud for 2010
Read the full article from From Bank Info Security at;
10 Faces of Fraud for 2010
Thursday, 10 December 2009
RTGS Payment System Glitch – Operational Risk Vulnerabilities in India
A snarl in the real-time gross settlement (RTGS) system this past Monday, saw a few banks face a near default-like situation. This has yet again raised questions on the value and the soundness of the infrastructure supporting the Indian financial system.
RTGS, for the uninitiated is an almost instantaneous funds-transfer and settlement system. In the Indian RTGS system, it’s possible to transfer money to another bank account within a maximum of two hours. RTGS is mainly used for high-value clearing.
When contacted, a Reserve Bank of India (RBI) spokesperson said, “There was a glitch (in the system) on Monday, after we upgraded the RTGS software over the weekend.” She clarified that RBI had rectified the problem on the same day.
Bankers familiar with the RTGS system said that while clustering of payments is an often-enough occurrence (four to five times a year) this is the first instance of such large-scale malfunction. One large state-owned bank, in particular, faced an acute payment crisis that forced it to request assistance from other banks, to meet its obligations. After a considerable delay, funds were arranged.
“Many of the counterparties did not receive payment till as late as 1.00 am the next morning. And by virtue of one critical fund or counterparty not paying up, it would have had a cascading effect on other banks,” said the head of treasury at one foreign bank.
Customer payments can be processed through the RTGS facility only up to 4.30 pm on weekdays while inter-bank transactions are possible up to 6.00 pm.
People familiar with the matter maintain that central bank officials and computer staff worked towards moving the entire RTGS load to the back-up site of the system vendor. It was only after this switch that RTGS operations could be brought back on an even keel.
While some say, the incident highlights the inadequacy of the RTGS infrastructure, others were too quick to commend RBI for the promptness with which it acted to restore order. “Any system is open to the occasional risk. However, there should always be a fallback arrangement to cater to such eventualities,” said an irate banker who had to soothe quite a number of ruffled clients.
However, a section of the industry terms it as just a blip on account of the fact that RTGS users have grown many-fold. “RBI and several banks are still in the process of enhancing their servers to cater to the excess load. This has occurred, because banks have crossed normal threshold limits, hence, the bunching up of payments. However, in such times, the National Electronic Fund Transfer (NEFT) system can provide an alternate. The only difference is that the window would be slightly larger than 4-6 hours,” said a senior staff member of a leading public sector bank.
Under NEFT, the transfer takes place either on the same day or on the next day, depending on the time of instructions given. Yet, senior private sector bankers disagree. “NEFT can’t be an alibi for RTGS. The bottom-line is that any robust infrastructure should have a fall back. If this had occurred during the month end, we would have had a virtual stampede,” a senior private sector banker said.
RTGS, for the uninitiated is an almost instantaneous funds-transfer and settlement system. In the Indian RTGS system, it’s possible to transfer money to another bank account within a maximum of two hours. RTGS is mainly used for high-value clearing.
When contacted, a Reserve Bank of India (RBI) spokesperson said, “There was a glitch (in the system) on Monday, after we upgraded the RTGS software over the weekend.” She clarified that RBI had rectified the problem on the same day.
Bankers familiar with the RTGS system said that while clustering of payments is an often-enough occurrence (four to five times a year) this is the first instance of such large-scale malfunction. One large state-owned bank, in particular, faced an acute payment crisis that forced it to request assistance from other banks, to meet its obligations. After a considerable delay, funds were arranged.
“Many of the counterparties did not receive payment till as late as 1.00 am the next morning. And by virtue of one critical fund or counterparty not paying up, it would have had a cascading effect on other banks,” said the head of treasury at one foreign bank.
Customer payments can be processed through the RTGS facility only up to 4.30 pm on weekdays while inter-bank transactions are possible up to 6.00 pm.
People familiar with the matter maintain that central bank officials and computer staff worked towards moving the entire RTGS load to the back-up site of the system vendor. It was only after this switch that RTGS operations could be brought back on an even keel.
While some say, the incident highlights the inadequacy of the RTGS infrastructure, others were too quick to commend RBI for the promptness with which it acted to restore order. “Any system is open to the occasional risk. However, there should always be a fallback arrangement to cater to such eventualities,” said an irate banker who had to soothe quite a number of ruffled clients.
However, a section of the industry terms it as just a blip on account of the fact that RTGS users have grown many-fold. “RBI and several banks are still in the process of enhancing their servers to cater to the excess load. This has occurred, because banks have crossed normal threshold limits, hence, the bunching up of payments. However, in such times, the National Electronic Fund Transfer (NEFT) system can provide an alternate. The only difference is that the window would be slightly larger than 4-6 hours,” said a senior staff member of a leading public sector bank.
Under NEFT, the transfer takes place either on the same day or on the next day, depending on the time of instructions given. Yet, senior private sector bankers disagree. “NEFT can’t be an alibi for RTGS. The bottom-line is that any robust infrastructure should have a fall back. If this had occurred during the month end, we would have had a virtual stampede,” a senior private sector banker said.
Monday, 30 November 2009
Remittances and Europe - Moldova
Remittances are a worldwide issue. All too often people associate “Remittances” with Africa or Asia. But remittances are a feature in any country where economic conditions are poor and where there are too many people for the jobs available. In these circumstances people migrate in the hope of finding work and being able to send money home to help feed and clothe family members who have remained behind.
This short video from the World Bank highlights conditions in Moldova, the poorest country in Europe. Its economy relies on money sent home by the hundreds of thousands of Moldovans who work outside the country. In the current global economic environment, it is inevitable that remittances will fall. Although it is still too early to tell by exactly how much, it is clear that declining remittances could have a large impact on families trying to cope with the economic downturn.
This short video from the World Bank highlights conditions in Moldova, the poorest country in Europe. Its economy relies on money sent home by the hundreds of thousands of Moldovans who work outside the country. In the current global economic environment, it is inevitable that remittances will fall. Although it is still too early to tell by exactly how much, it is clear that declining remittances could have a large impact on families trying to cope with the economic downturn.
Saturday, 28 November 2009
Payment Systems - Do you know how a cheque works?
Market research in the UK has confirmed that that consumer understanding of the oldest payment system, the cheque clearing process is still very low. To counter this, the UK’s Cheque and Credit Clearing Company (C&CCC) has launched an interactive online film that helps explain the different stages involved in clearing a cheque. It is educational, informative and very clearly presented.
Cheque clearing processes are basically universal, so even if you don’t live in the UK the principles covered are still valid. You can watch this online movie at: http://www.chequeandcredit.co.uk/files/candc/flash_files/candc_animationv6.swf
Cheque clearing processes are basically universal, so even if you don’t live in the UK the principles covered are still valid. You can watch this online movie at: http://www.chequeandcredit.co.uk/files/candc/flash_files/candc_animationv6.swf
Friday, 27 November 2009
Payment Systems in India – A Vision for the Future
Recently the Reserve Bank of India released a report entitled ‘Payment Systems in India - Vision 2009-12‘. In this the Indian central bank discusses initiatives it has taken and what it plans to do to improve security of cards, make ATMs more accessible to the public, make banking more accessible to the public, improve its efficiency, timings and reduce risks. It notes that the future is in mobile payments and offers its outlook on alternate methods to improve the Indian payments industry.
This succinct summary of the Reserve Bank of India’s proposal MEDIANAMA is a “must read”. Access it at RBI’s Vision For Mobile & E-payments, Major Projects | MediaNama
This succinct summary of the Reserve Bank of India’s proposal MEDIANAMA is a “must read”. Access it at RBI’s Vision For Mobile & E-payments, Major Projects | MediaNama
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