Prostitutes and fraud but wife stands by banker

The wife of disgraced fraudster Stephen Versalko, who spent millions on prostitutes, will stand by him during his jail sentence.

Versalko's brother Greg said the offending was a huge shock to the extended family but they would support him during his time in jail.

The fallout continued yesterday with questions about ASB bank's systems under which Versalko, a former employee, defrauded 30 clients of nearly $18 million.

Over seven years, he splurged $3.4m of stolen money on two Auckland prostitutes, more than $4m on property and racked up $300,000 on wine.

Moves by the bank to recoup $1m from one of the prostitutes, through civil proceedings, have been supported by a banking expert.

Greg Versalko said his brother's wife, who was not at court on Thursday when he was jailed for six years, was standing by her husband.

"All the way through she's stood next to him. I'm sure that his family will miss him when he's inside. Definitely all of us will be there to visit him.

"What he's done is certainly not acceptable but he's my brother and from my perspective I'll be there to support him for the next six years.

"From a victim perspective we're obviously very sorry for the people that have been affected."

ASB Bank has repaid the clients defrauded by Versalko and launched legal action to force the sale of one of the prostitute's houses to recoup about $1 million. In court, Versalko's lawyer, Stuart Grieve, QC, said the woman had blackmailed his client for $1.2m.

Serious Fraud Office director Adam Feeley said the office investigated whether anyone else, including the prostitutes, knew about the crime.

"We formed a view that that was not the case and there wasn't a criminal case to answer.

"ASB could consider that a wrong conclusion. While it might not be able to be proved to a criminal standard it could be proven to a civil one."

Massey University banking specialist David Tripe said the bank was within its rights to recoup as much money as it could.

"I think they want to be seen to be making an effort," Dr Tripe said.

"If you can spend $100,000 on legal bills and get a million back that would be reasonable wouldn't it? There would be some questions asked by the shareholders if they walked away from it."

Dr Tripe also questioned how the bank had allowed one man to be in sole charge of so many clients' transactions over such a long time.

"It's always a risk when you see things like that happen."

On Thursday ASB said it had "introduced additional processes and practices to further strengthen our security and protect our customers so that this situation does not happen again".

The bank did not return calls from The Dominion Post yesterday.

Greg Versalko said he had yet to ask his brother why he had stolen the money.

"From where I stand, I'm sure that will come with time. I think he'll choose his time. He'll find the time and he'll tell me in his way, I suppose.

"There's the life that he led and there's the life that I know of him as a brother. I suppose, we always knew that he was successful in his role ... He was just one of the guys."

- © Fairfax NZ News