$3.4 million on prostitutes
The Herald looks at the case of fraudster Stephen Versalko:
If it wasn’t for Bernie Madoff, Stephen Versalko could still be stealing millions.
The largest employee theft in New Zealand history was discovered only after an ASB Bank client saw a television show about Madoff, America’s US$50 billion fraudster.
In August, a woman who had invested more than $3 million with ASB adviser Versalko became uneasy about the fact he was the only staff member she had dealt with.
If something happened to her, she reasoned, 52-year-old Versalko would be the only person who knew anything about the funds into which her money had gone.
At about the same time, she watched a documentary about Ponzi fraudster Madoff that rang alarm bells. Madoff’s technique of fobbing off his victims reminded her of Versalko.
A phone call to ASB confirmed the investor’s worst fears – her multimillion-dollar investment portfolio was fictitious.
Madoff finally does some good.
Then a Serious Fraud Office inquiry found nearly 30 wealthy clients had been defrauded of nearly $18 million over nine years.
Criminal charges were laid in the week before Christmas, and Versalko pleaded guilty in February.
Yesterday, he was sentenced in the Auckland District Court to six years in prison, with a minimum-non parole period of four years.
I don’t think that is enough, for the scale of his offending. He had ten years of the good life living off his victim’s money.
But one of the more sordid details of the case is that Versalko paid $3.4 million to two prostitutes with whom he had long-term arrangements.
Good God. That is a lot of money for sex!
If one assumes the cost of a normal sexual encounter is $200, then that is 17,000 bonks. Now over 10 years that is 1,700 bonks a year or around five bonks a day.
Now there were two of them, so he may have had threesomes, but that would still be two threesomes a day with change left over.
The Herald understands Versalko took one of the women – instead of his wife – on a business trip to Dubai to stay in the Burj Al Arab Hotel, where the cheapest room costs US$2000 a night.
He was married? Oh yuck. Poor woman.
March 19th, 2010 at 9:53 am
Prostitutes charge through the nose to do that Molly Ringwald Breakfast Club erotic self-insertation fan-fiction role-playing stuff.
March 19th, 2010 at 9:53 am
Oops! That was meant for General Debate. What’s this thread about, anyway?
March 19th, 2010 at 10:04 am
“He was married? Oh yuck. Poor woman.”
Not poor – I suspect she had the benefit of a substantial portion of that $17m. She was also in one of the best positions (along with the ASB) to recognise that something was going on.
I can feel sorry for his family ….. but at the same time recognise that they share some culpability for the offending. They took the money without asking enough questions. Ultimately that is the reason most crime continues.
Most fraudsters have people in their lives who know – or should have known – but chose to be blind/deaf to the signs. These are the enablers. Equally most murders/rapists have enablers – friends and family who assist in allowing the offending to continue.
If we accepted that enablers have some moral culpability (if not legal cupability) then a lot of crime would be stopped earlier. there are a lot of people in this man’s life who all helped him to commit these crimes. They should not be given a free pass.
I think we accept that the ASB may technically be a victim – but they must also accept some responsibility for the offending. That rationale applies to others.
March 19th, 2010 at 10:05 am
AND(!):
BUT:
Probably needs to be taken into your bonking-accounting-calculations:
Probaby reduces the bonks per day to something much less consequential. Like say four.
March 19th, 2010 at 10:20 am
Just what i thought too, but lets not bag DPF for missing out salient facts that put things into perspective, after all this is a sleeze report not politics
March 19th, 2010 at 10:20 am
I am sure she enjoyed the good life with her husband for that nine years and never ever questioned his sources of income. Yeah Right. Poor woman my arse.
March 19th, 2010 at 10:33 am
Weird as case. From memory the bulk went to one of the 2 women, with 750k to the second.
Either this guy was incredibly stupid ( mistress/s would be cheaper ), or there is a swiss bank account waiting for when he leaves prison.
March 19th, 2010 at 10:42 am
For that kinda money I could get inside Alicia Keyes
March 19th, 2010 at 11:08 am
How do you know how much a Hooker charges for a normal (sic) bonk?
March 19th, 2010 at 11:10 am
You think you could buy the key(e)s to her drive way then..
March 19th, 2010 at 11:20 am
$3.4 mil on 2 hookers? jesus, what was he thinking.
Dime never sees the same hooker twice!
March 19th, 2010 at 11:28 am
Dime
You must see them more than once, I do not imagine there are enough hookers in NZ for you to see a different one every couple of nights.
March 19th, 2010 at 11:43 am
Our company got ripped off by an employee a few years ago – six figure sum – she was probably regarded as the most trustworthy person in the office and none of us had a clue she was stealing.
After this we began using an Auckland pre-employment screening company to screen new staff and every year or two they return and update/reassess each employees trustworthiness – sort of a Warrant of Fitness check for staff. All employees go through the process (no exceptions, which everyone likes) and since bringing in the policy three years ago there has not been one instance of employee theft, probably because the bag-eggs never get past the front door.
Some job applicants withdraw their applications when we tell them an external screening company will be verifying their CV’s!
March 19th, 2010 at 11:57 am
Chris that is actually quite a good idea.
How much does the service cost?
March 19th, 2010 at 11:58 am
Its not like he spent $3.4 mil in 2 hookers? He spent $3.4 mil on 2 hookers?. Rich men often spend more than that on one wife. For two hookers to give him a raise over 9 years on 24hr call plus expenses sounds about right.
(DPF) say’s it cost $200 for a Hooker… I think he must have something there.. It always costs me around $200 to take someone out for dinner.
March 19th, 2010 at 12:09 pm
Chris2 11:43 am
Good advice for the ASB.. where was their employment screening and Staff Warrant of Fitness checks.
Not good enough.. For a BANK.
March 19th, 2010 at 12:22 pm
It works out at $12500 for every day of Porridge.
And yeah I reckon hes got a bank account somewhere to come out to
March 19th, 2010 at 12:32 pm
two facts to come out of this
He never did pay those prostitutes that amount, that money is somewhere else.
18million is only the verified amount
March 19th, 2010 at 12:36 pm
Jeff83 @11:57am – we use a company called Personal Verification, run by a guy who used to run the Government’s security vetting programme, really seems to know his stuff
A basic check is $190 and for that we get a job applicant’s criminal history, driving record, credit history, ACC history, right to work in NZ and verification of last 2 employers.
We figure this is cheaper than if we had one of our own HR staff try and collect and collate all this information.
March 19th, 2010 at 12:40 pm
Yes, but who checks the checker?
March 19th, 2010 at 12:43 pm
You would hope someone at the IRD is looking at the tax returns of the two ladies in question!
March 19th, 2010 at 12:55 pm
‘And yeah I reckon hes got a bank account somewhere to come out to’
Yeah the RID should sent in some hookers in to get it out of him..
March 19th, 2010 at 12:57 pm
mpledger @12:4pm wrote
Yes, but who checks the checker?
Good point. When we previously used recruitment companies they had a vested interested in NOT finding anything derogatory about a candidate they put forward, as their Commission was based on a successful placement!
Unlike recruitment firms, this pre-employment screening company we use has no vested interest in the outcome because they get paid no mater what they uncover and report. Their fee is also a miniscule fraction of the 15% Commission we used to pay a recruitment company.
March 19th, 2010 at 1:00 pm
OMG, a married man went to a prostitute…. surely not – has never ever happened before….
March 19th, 2010 at 1:10 pm
Our sentences for financial crimes are far too lenient. If Madoff had his offending scaled down to the NZ equivalent level I wonder what sentence he would have got – certainly nowhere near 150 years as it’s pretty unusual for a consecutive sentence to be given in NZ. Probably closer to ten years and home detention at that.
In this case it seems individual investors have been reimbursed by ASB but some of these criminals destroy individuals lives and should be sentenced accordingly.
March 19th, 2010 at 1:33 pm
“You would hope someone at the IRD is looking at the tax returns of the two ladies in question”
As well as investigate the 30 wealthy women he defrauded.
March 19th, 2010 at 2:13 pm
dime says:
big bruv surmises:
Turning them over doubles the figure burt, and there’s a large workforce of amateurs in places like West Auckland. But even so, he must be close to exhausting the supply. I’d suggest a blindfold, but having both parties wearing one would make it difficult to complete the trasnaction
March 19th, 2010 at 2:30 pm
“Dime never sees the same hooker twice! ”
Yeah right! Is it because the pip-squeak dime is far too embarrassed to ever revisit the unsatisfied whore?
March 19th, 2010 at 2:42 pm
Actually PaulP in terms of years sentenced per dollars stolen Versalko has been punished far more severely than Madoff was. Consider the equations:
Madoff – stole US$65 billion (approx NZ$90 billion) sentenced to 150 years = NZ$600 million per year of jail time.
Versalko – stole $18 million sentenced for 6 years = NZ$3 million per year of jail time.
Hopefully Versalko’s lawyers won’t see this and try to argue that their guy doesn’t deserve a sentence 200 times more severe than Madoff…
March 19th, 2010 at 3:34 pm
“Chris2 ” That is actually a really good service for the price.
Thanks for that, good piece of general knowledge.
March 19th, 2010 at 4:16 pm
“You must see them more than once, I do not imagine there are enough hookers in NZ for you to see a different one every couple of nights.”
lol its my new habit of having one for lunch that is an issue!
D4J – are you one of those delusional fools that think you can satisfy a hooker? not a lot of hookers see retards, must be a struggle for you to find one? then youll just get angry cause you know the courts would rule her a better parent than you
March 19th, 2010 at 4:33 pm
A classic case of buyer beware. I don’t want to hear those whinging socialists (even some rightwingers here on this blog) calling for more regulations to protect stupid investors. You can’t have regulation in place to avoid or prevent people from being stupid, period.
March 19th, 2010 at 4:33 pm
The truth is dime I don’t have to use whores.
March 19th, 2010 at 4:34 pm
Jeff83 – the company also alerts us anytime an employee looses their Driver licence, so we can take steps to ensure the employee does not drive a company car.
If the Police catch a person driving whilst disqualified, even if its a company car, the vehicle is automatically impounded for 28 days regardless of who owns it. And the tow and impound fees for a month’s storage can run into the thousands.
March 19th, 2010 at 4:43 pm
Chris2 (193) Says:
March 19th, 2010 at 11:43 am
Our company got ripped off by an employee a few years ago – six figure sum – she was probably regarded as the most trustworthy person in the office and none of us had a clue she was stealing.
After this we began using an Auckland pre-employment screening company to screen new staff and every year or two they return and update/reassess each employees trustworthiness – sort of a Warrant of Fitness check for staff. All employees go through the process (no exceptions, which everyone likes) and since bringing in the policy three years ago there has not been one instance of employee theft, probably because the bag-eggs never get past the front door.
Some job applicants withdraw their applications when we tell them an external screening company will be verifying their CV’s!
Yep, and I’d be one of those, not because I have a criminal record (I don’t) and not because I plan to steal from you, but because any relationship, including employment, needs to be built on trust and respect and you have shown you do not have trust, and probably as a result, little or no respect for your employees.
March 19th, 2010 at 4:53 pm
“Yep, and I’d be one of those, not because I have a criminal record (I don’t) and not because I plan to steal from you, but because any relationship, including employment, needs to be built on trust and respect and you have shown you do not have trust, and probably as a result, little or no respect for your employees.”
I’ll bet he also locks the offices at night and probably makes staff use passwords on the computer. I’d even bet he pays insurance premiums.
March 19th, 2010 at 5:00 pm
LeftRightOut @4:49pm wrote:
Yep, and I’d be one of those, not because I have a criminal record (I don’t) and not because I plan to steal from you, but because any relationship, including employment, needs to be built on trust and respect and you have shown you do not have trust, and probably as a result, little or no respect for your employees.
I imagine all the New Zealand employers listed on the following website regret extending unverified trust to these employees without first taking the precaution of confirm their CV’s and backgrounds – http://www.verify.co.nz/news-theftnz.php
March 19th, 2010 at 5:04 pm
If employers are subjecting employees to that level of scrutiny, then it should only be on the basis that employees have reciprocal rights of investigation. The risk is not one-sided. I am sure there are plenty of employers making hire/fire decisions who would not withstand such scrutiny.
March 19th, 2010 at 5:07 pm
“If employers are going to that extreme to investigate employees, then it should only be on the basis that employees have reciprocal rights of investigation”
Yeah courts are full of cases of employers busting into their workers’ homes and stealing stuff.
March 19th, 2010 at 5:31 pm
If only he had called him self Hanover Finance then he could have robbed without consequence. His problem is he stole from the educated and wealthy he should have stuck to the poor common people.
March 19th, 2010 at 7:52 pm
Versalko stole from a fraudster.
When the ASB Bank, a wholly owned subsidiary of the Commonwealth Bank of Australia, advertises itself as a New Zealand bank they are committing a fraud.
Fraud is a false statement of fact, made with a knowledge of that falsehood or recklessly without belief in the truth, with the intention that the falsehood be acted upon and inducing a person to act upon it.
Their fraudulent advertising is there to persuade New Zealanders to bank with those scurrilous people.
Versalko should get a medal, or be even made a knight, for taking down those Aussie bastards.
March 19th, 2010 at 8:23 pm
So, Mr Notts, are you suggesting two wrongs make a right? I hope not.
March 19th, 2010 at 8:46 pm
‘Ten years of the good life’ you call it, DPF. Doesn’t sound like the good life to me.
March 19th, 2010 at 11:19 pm
Im pretty dubious he spent the money on the hookers.. I would say its buried somewhere, sure he spent some, but he would have know he would have got caught, so why not buy a whole lot of stuff that is untraceable ( like Wine, Hookers, Gambling etc ) then when your caught you can claim you lost the lot – also its why you plead guilty straight away like he did , get it over with, get your discount on your sentence so you can come out a free man with x millions buried somewhere and no wife.
If he not as smart and did blow it all. Where is the IRD? I would be all over (excuse the pun) these hookers for their tax returns as im guessing they didnt declare this income and pay the tax – forget the trademe traders not paying 10k , these woman would owe millions when the penalties are taken into account .
March 20th, 2010 at 9:06 am
DPF, I hate to burst your bubble, but the overwhelming majority of clients of prostitutes are, in fact, married men.
And since this dude seemed to restrict himself to only two, I would say his wife shouldn’t be too upset.
She may even have known. Who knows?
March 20th, 2010 at 12:42 pm
Where did it say he was ripping off the bank ? My understanding he was ripping off investors acting independently of the bank, but not the bank itself.
The employment screening would have been pointless
March 20th, 2010 at 12:52 pm
btw
I have an overseas ‘friend’ who invested $500,000 with ASB um about lets say seven years ago, and its probably up to $1.2million now, so I suggested that he try and make a claim for it
Now to get access to ASB letterheads
March 20th, 2010 at 2:20 pm
Dirty Rat @12:42pm – Versalko first started his frauds when he had to find money to pay a $40,000 debt. This debt would possibly have been recorded on his Baycorp file.
Also, as he was spending way beyond his legitimate income he probably had a very lengthy credit file because of suppliers making credit enquires on his name, and this would have stood out and been evident during any employment screening enquiry, and reported to his employer. So I don’t share your view that employment screening would have been pointless.