Editorial: Greed, sex and deception: a fraud story with all of the elements

For such an unassuming looking little man, Stephen Versalko sure played in the big league – the big league of manipulative, grasping, nasty thieves, that is.

Fitting, then, that it was a documentary on the methods of that international king of crooks, Bernie Madoff, that led to our own Ponzi scheme fraudster's relatively speedy downfall. One up for the media!

The Versalko story has all of the elements. It is about greed – New Zealand's biggest theft-as-an-employee case, involving the best part of $18 million, defrauded over nine years from 26 wealthy clients. It is about high-living – the Auckland District Court heard how Versalko had racked up $2.2m on credit cards, including a $300,000 splurge on his wine cellar, and spent nearly $4m of his illicit gains on properties.

It is about how one of the large Australian-owned banks – an industry that has not exactly been top of the pops with most of us in recent years – has been forced to undertake costly damage control thanks to the activities of a rogue employee it trusted, raising embarrassing questions about its internal security.

And it is about sex – $3.4m-plus handed over to two prostitutes, for services rendered and, according to the Serious Fraud Office, as hush money when one threatened blackmail. Clearly, this is the most sensational feature of the sordid affair – the "Hey, Gloria, look at this!" element that has us all talking. Whatever might drive a man to waste such an outrageous fortune on his own sexual gratification would be beyond the comprehension of most of us.

It might even see Versalko accorded some "on yer, mate" notoriety in workers' pubs and tearooms. It should, however, merely illustrate what a contemptible and miserable creep he must be – even if, at the height of his offending, he admits seeing himself as "Mr Invincible".

To its credit, the ASB acted quickly to repair the damage done by its rogue employee. It phoned the duped "investors" promptly to explain things had gone wrong and offered assurances that their money would be reimbursed.

Not only that, it made good on Versalko's too-good-to-be-true investment promises. One up for the bank, too, it would seem. Presumably, it and other money-lenders will have learnt a valuable lesson on the need to create checks and balances that are based on that most basic premise: trust no one. When it comes to handling others' money, the saying "safe as a bank" really does have to mean something.

What next for Versalko? Bizarrely, given the extent of his thieving, he qualified for a third off the starting point for his sentence.

And, although he was jailed for six years, he only has to behave himself and he is likely to see another third lopped off the actual sentence. The judge, though, described the sentence as a deterrent to white collar crime. Hmmm. Meanwhile, arguments continue over some of the Versalko assets, including the entitlements of his wife Megan.

As always, there are unanswered questions: can Mrs V really, truly, have known nothing of her husband's behaviour? How many other, smaller-scale employment thefts occur day after day, undetected? And how much has he been able to hide in an overseas account so that he can ease his way back into a new life? If he was even half as smart as he thought he was, he'd have managed that, surely.

- © Fairfax NZ News