The $18 Million Bank Fraud (True Crime Documentary) | Real Stories

paper was light gold in medieval times [Music] i want tobacco sugar [Music] that everything we thought we knew about the world might turn out to be completely wrong [Music] [Applause] [Applause] so the fallout's spreading fast from what's believed to be the world's biggest financial swindle by one person the rich the famous and some serious banks have lost billions of dollars to bernie madoff bernie madoff this week 150 years in jail what did you think of that enough yeah it's an interesting thing isn't it some people are saying well maybe these investors were perhaps a bit greedy but i think he was basically saying i can get you 10 every year now year after year that's unrealistic but it's not outrageous is it and the other thing i was struck by was a number of wealthy investors who you think would know better who put all their money in this one investment so they had advisors advising them as well who completely got it wrong i absolutely believe there was a terrible story of this family where they put a whole lot of [Music] hi i just wanted to check on some investment bonds i have with you certainly look what i need from you is the bond number do you have the statement with you yeah okay if you look on there there should be a bond reference number if you can just give me that we'll uh sort this out for you there's nothing there there's no bond number no okay let me have a look [Music] account under your name [Music] that phone call began a chain of events which unraveled stephen basalko's nine-year double life she had the feeling that there were some similarities between the way mr madoff was acting towards investors and the way mr basalko was acting towards her he betrayed everyone's trust his family his investors and his employers oh my goodness stephen look what you've done you're not nice to are a despicable human being i knew nothing of what he was doing it's just ruined my life he'll get out of prison and he'll have to make it his way in the world but we won't forget him [Music] [Music] [Music] he was a family man he had wife and teenage children and lived in east auckland a very comfortable life well he was just stephen the nice person who looked after my mummy transactions and he was just very very pleasant he had a sort of sixth sense for making investments and for making money which not everyone is attributed with but he was he had just a knack for it prior to working at the asb mr vasalco had a lot of experience in money markets and swaps and options and that kind of thing he worked at a lot of banks spent some time overseas and generally was very clever and very skilled at what he did he was very highly paid in those earlier jobs and we know that when he took the job at asb he did suffer quite a substantial pay cut all right hi hi hmm how was your day great how was yours oh god yeah yeah okay okay [Music] so [Music] it established a certain kind of lifestyle and then it's fair to say perhaps didn't adjust as well to earning less money [Music] hello stephen it's melanie melanie hello how are you i'm well thank you listen the reason i'm calling steven is my investment is maturing fairly shortly well i've been thinking about what i can do to you know make my money make more money for me because i just wondered if you had any ideas for me mister south undertook a property development project in 1999 and he needed some money to see that through to its conclusion otherwise he would have had to either sell up or borrow from somewhere else and perhaps it exhausted those loans so needed around seventy thousand dollars to make that happen i'll tell you what i'll do i will have a big think about it and i'm sure i can absolutely find something to help you i look forward to hearing from you then bye bye the first client who lost money through him and they'd had an ongoing relationship in terms of him looking after her money she lived overseas and relied on him to really run things for her here in new zealand which you know he did a very good job at doing and on occasion she traveled to new zealand he sort of went the extra mile and would pick her up from the airport and take her to where she needed to go and set her up with an atm card and that kind of thing and really go the extra distance which you know she appreciated and engendered a lot of trust between the two of them [Music] hello melanie speaking hello melanie stevenselko how are you today look um melanie i'm ringing you today because i have some very very good news about your investment it's um very exciting news actually it's called fixed interest investment which means you have a favorable interest rate tax benefits we take care of the tax you have to worry about that we pay it for you uh your funds are on calls you can get access to your money at any time and what's more important you're on a better interest rate the the thing you'd have to do is just send the authority over to me to action it but other than that we're away my urging to you would be to take this uh fantastic new offer but the thing is you know it's your money so you can um stay with the old scheme if you like well i trust you implicitly stephen so great go right ahead that is fantastic you have made an excellent decision have a fantastic day [Music] then because mr vasalco had the authority because of his position at the bank he was able to transfer that money from her bank account into bank accounts that he controlled in the meantime he obviously had to cover up the fact that he had stolen the first investors money and he did that by producing false statements [Music] so [Music] so that first investor didn't realize that anything was was out of the ordinary she received her a statement saying that her money had been transferred from her bank account into a new investment account and therefore she was quite happy with with her investment and from there he was able to take the seventy thousand dollars and cover his loss on the residential property development [Music] in my opinion mr basalko across the line immediately he stole the first amount of money that he did and the first transaction where he stole money was for seventy thousand dollars and then about a month later took some more of the same amount and then a month later took a smaller amount so that was the initial way he kicked off the scheme now to be able to walk away from the scheme at that point in time mr vasalco would have had to have some other source of income it was unlikely that that money was going to come from his salary therefore he would have had to have some other one full gain to be able to replace that money so let me try and explain a ponzi scheme to you imagine that i'm an investment specialist i claim to be an investment specialist but i have no money i have no customers so i invent a fictitious scheme whereby i offer a 50 return on an investment you come to me with a thousand dollars and i often offer you 50 return in one week so that means in one week i'm going to i'm going to have to pay you 1500 so i take your thousand dollars but instead of investing it because there's no way i can legitimately invest it and make a 50 50 return i blow it i take my wife away to a spa for the weekend one week comes around you come to me saying where's my where's my 1500 so i need two new investors to pay repay you so i acquired two new investors they each give me a thousand dollars so now i've got two thousand dollars i give you your 1500 and i buy my wife some nice laundry and some perfume in a week's time those two investors are going to return and say will you owe us our thousand dollars plus our 500 so that's 3 000 and if you multiply that by a thousand then you're in for salgo territory you're talking millions and the thing is that there's no legitimate way of making that good there's no way short of a lottery win that i'm ever going to be able to repay all the investors unfortunately what happens is it's unrealistic for it to continue for a long time because it collapses under its own weight i guess the most famous one recently has been the scheme operated by bernard madoff in the united states in 2008 he confessed that his investment firm had actually been operating a ponzi scheme he's now currently serving 150 years sentence in the united states ponzi scheme foresters are confidence tricksters they're con men so they're selling themselves as much as they're selling the product the forces in general have many commonalities or traits in common um and steven versaco is no exception to that oh [Laughter] thank you i trust you implicitly stephen you've never put me wrong yet go right here that will be because of the um the uh the shorter month um in the in the statement period now it is your money so uh you can leave it where it is but i highly suggest you take this deal which means you have a favorable interest rate uh tax benefits we take care of the tax you have to worry about that we pay it for you and government guaranteed government guarantee well that's good right well i'll think for half a second so for a foster like for salco who has his own particular set of characteristics he in turn will look for a particular set of characteristics in the sword for investors that he's wanting to take advantage of [Applause] [Music] [Applause] [Music] hello melanie speaking [Music] okay [Music] i started working at the pelican club a friend of mine there told me you know you put an ad in the paper from home you don't have to pay the shift fees etc and stephen answered my ad hello we had a chat he just asked me to describe myself you know my height hair color blue eyes he said he liked the sound of me and when can i meet so we made an appointment the first payment that mr salko made to the first escort that was a major beneficiary of his ponzi scheme occurred in 2001 that was approximately one year after he stole the first amount of money on a typical visit from stephen i'd make sure the garage was out for him so he could drive in put the garage down in case someone saw him at first when i first met stephen it was once every fortnight that i saw him and it turned into once weekly maybe twice a week but he was seeing other girls as well at the time that he'd tell me about hi hi there you go hey he was likable he was like charming he's going through the roof actually what did she laughs and have a good time you know he was just like any other guy until you get to know them you don't know what they're like i have to say i've been to the uh i've been to the pelican a couple of times and a couple of um new girls there yeah you know they're uh they're they're nice and they know what they're doing let's settle this up now are you always paid by cash always like what he's paid on his credit card that you know about it everyone knows about that i'd say would only be about ten percent of what he's actually spent because he did say he likes to spend mostly cash because it can't be traced [Music] when he left i used to have a hot shower make myself a coffee and have a smoke [Music] he probably was very different to me to me personally because you know i knew the sexual side of him total different side of him and then when he went back to work and he was mr straight man he used to phone me just to see how i was you know without seeing me he'd just ring me and say you know how are you today how's your day going he just seemed to like make an effort i did respect him in the beginning as i got to know him more things his kinkiness started to come out and that was weird some of his weird ideas and people he saw that that kind of changed my feelings a bit well it started off at about 150 an hour which is the normal hourly rate but when he got into other kinky stuff it went up maybe 250. when he was with me his phone would ring and he would answer the phone like 50 of the time i thought i wouldn't have answered it myself personally all right next time drive safe what a a man or woman once want to do in that regards is their own business but in his case he was using other people's money for his ill-gotten goodies whatever and and paying high prices just to pay the big the big man [Music] at some point investments that were previously represented to clients would have been maturing or if a client for example decided they wanted to extract money from their investments for the house purchase or similar then um mr psalk would have to find those so the first instance we see of having to pay some money back would have been about 2003 when an investigated amount of cash so at that point that was reasonably manageable we had enough in there to be able to do that but as the scheme wore on and more and more people needed money back interest payments were due and that's when it started to get a little bit unmanageable so therefore to cover those payments he needed to attract more and more money into the scheme and therefore he stole more and more money to be able to make these repayments he'd established relationships by being good at his job basically and obviously he had a lot of clients who didn't afford that he had good relationships with as well so he was knowledgeable and was able to explain things very easily to people which is a bonus for some people who aren't as savvy with money as others and i guess found some common ground with each of them steven i love it hello everyone lovely to see you too here we go oh for you oh how lovely you do know my taste yes i know you like that great well he was just stephen the nice person who looked after my mummy transactions and he was just very very pleasant and i just took him at face value because why wouldn't i a new investment opportunity has just come up it's called asb investment bonds most fantastic thing is it's an eight percent interest rate how much eight percent good it's the highest around as we like to reward our loyal clients well you can transfer it straight away we can do it today if you want of course you don't have to sign anything uh no you can give me the authority verbally and government guaranteed government guarantee that's good safer i think for half a second um why not that's a wonderful decision you just made right he would ring up and say i think it's time we discussed the money situation again because i suppose something was falling due the other day he would take me out to lunch when i say it didn't happen a lot you know perhaps once every six months could we have your best champagne thank you very much and we sit there and just talk about everything and and nothing in general not that i want to go on about it but i'll just stop thinking with your investment we could just maybe um roll over for another year how do you feel about that look let's talk about it later let's yeah i didn't talk much about the book work because everything just sort of kept rolling over and i didn't query anything because quite frankly i had nothing to query he became a friend but i suppose now he would sort of mentally tick me off his list and say she's fine [Music] buying personal satisfaction that kind of thing is what drives so many of these people where the person sees themselves as better than everybody else and they get to the point they they know they're succeeding they've taken an investment here they've taken an investment they're getting a win they get the profit and then they start thinking well i need to pay me for i'm doing really good i need to pay me i need to get a little trip here hey i've met someone who's a prostitute i can get a deal going there and so it goes on they tend to judge their life in their future around themselves they don't see it with other people it's very much focus on yourself one of his offences that sticks in my mind is that he was contacted out of the blue by an investor who had been diagnosed with a terminal illness one of the lures that mr freselko used to attract investors was that their funds would always be in call they weren't tied up and this investor needed his money back quickly to distribute to him relatives and this panicked steven reversal um it was an inconvenience to him he needed this money straight away so he needed to get another investor to pay off this early investor which is a hallmark of a classic ponzi he had two clients he approached them steven yes good to see you good to see you thanks for coming this way thanks so much great to meet you nice to meet you too oh thank you well gentlemen the good news is i can offer you the interest rate that you're wanting now this is the best deal in town it is the most fantastic deal you're going to find and i'm offering it to you first now it is your money so uh you can leave it where it is but i highly suggest you take this deal as it is the um probably the offer of the year to be honest it does sound like a great deal so i can't see any reason why you wouldn't go with it and he took their money on christmas eve cheers oh merry christmas same to you [Music] because of the almost unlimited funds that he had at his disposal mister for salco was living a lifestyle that most of us can only dream about he was living in a beautiful house [Music] he had a batch at the seaside bought cash [Music] children educated privately a wine collection worth 300 000 [Music] money simply wasn't a problem for him he didn't need to think about how much he was spending he would just do it over the period of his offending he had seven credit cards and they were with a variety of financial institutions and on some days he used the multiple credit cards to withdraw the maximum amounts on multiple occasions on those days [Music] mr visalco's expenditure was significantly more than his salary so he was living well beyond his beans nice little drinking you know the cmc markets i told you about yeah well the overnight are fantastic he traded with a company called cmc markets which is a company that allows their clients to trade in financial products mr vasalco invested some money with this company and did his own trading in these financial products and it appears from our financial analysis that he was quite successful at doing that and we believe that he told a lot of people that he was trading successfully with cmc markets which would explain a lot of his spending and lifestyle it's the challenge let's take it to the next stand let me try a little bit further let me drive my opportunities just a little bit further a game that gets more and more complicated look i'm a bit of a bit of a hurry today so i might um yeah towards the end he seemed pretty frustrated when he used to come and see me he used to be what seemed on edge and he wouldn't even stay an hour just wanted it over and done with he'd like his relief and then he'd go sometimes he was gone in 15 minutes i suppose all this stuff was building up towards the end you know maybe he knew he was going to get caught or something the gambling problem started probably around 2004 and it just got out of control i'd spend anywhere between 1 000 and 3 000 a night steven told me to try and stop gambling yes that's very hard to do how the relationship between us ended well he told me he wanted to stop seeing me i did previously tell him beforehand that i was going to stop working because i've had enough um he did tell me to give him a call if i did get into trouble which unfortunately i did steven selko how are you yeah good uh well i i just lost money but how much you need oh maybe just like five grand um he used to say that just give me a couple of days and i'll sort it i'll just sell some shares it was like a night in shining armor he could help me but towards the end when i was asking for a bit more money than normal i think that yeah he was getting stressed there was a reference on one of the transactions from mr visalco to the escort where mr basalko had written a bribe which appeared on her bank statement well he he rang me and we talked about that and he said he was sorry he put that in it was just to try not to ask him for so much money and yet i rang him a week later and asked for more money and he put money in not a problem there was always a threat that one of the escorts might have contacted mr versace's family and although that threat was never made overtly as far as we were aware perhaps both parties mr versace and the escort knew and he was prepared to pay her money just to hush her up but i wasn't bribing him like he said and that just made me so upset i was actually upset first and then angry i never gave him any indication ever that i would tell his wife as if i'd be telling her i don't want her on my doorstep and we didn't find any evidence of bribery occurring and furthermore there was never a complaint laid to the police that bribery had occurred mine and steven's relationship ended in 2005 a sexual relationship let us but we did keep in contact over the phone over the years and apparently he met another lady at the pelican club that he took to dubai and other shopping trips and bought over ten thousand dollars for clothes or something and i was probably a bit peeved off they didn't take me away yeah yeah i was yeah [Music] it's not just having a little holiday going up to auckland either go down to christchurch or queenstown this is let's go for a good one it's getting bolder and bolder and bigger and more daring and of course with a whole lot more of fringe benefits shall we call it for a lack of a polite term for taking your hookah with you it's it is a compulsion it is in a sense an addiction isn't it the second escort who was a major beneficiary mr visalco's ponzi scheme she received her first payment in approximately 2007. [Applause] is that all right yeah well what are we going to um look sorry to could you i'm sorry can you tell for one thing there's got another call coming through hello the unbelievable part is he still had to earn his salary at the asb still bring in legitimate customers still have mummy turned over plus he had to deal with the 26 other customers who uh he was fiddling and using their money how he didn't get the whole thing i don't know mixed up it's unbelievable okay bye sorry bill about that we uncovered several mistakes that he made that if more knowledgeable people about investments were involved they may have recognised steven the selco hey hi stephen it's uh timothy patterson here hey look i've just got a query on one of the statements you've sent me it seems that the interest has been calculated incorrectly here it should be for a period of 92 days but you've only done it over a period of 90 days this is the latest statement you you've received that's the statement i received yesterday oh well that that will be because of the um the the the shorter month um in the in the statement period and um that's uh that's clearly some sort of technical error i see that it actually comes right one investor walked into a branch of the asb bank who had just purchased the property and needed their investment funds to be able to settle that property so how did you get on i faxed all that stuff yes there was i just i'm not able to find a reference number on here and i have looked in the system and i'm not able to find your name in there at all look i have absolutely nothing else this is all i have now look the reference number that's not my problem i have a lot of money involved here did you remember if it was he was speaking sure it was uh stephen versace i decided to do this to you well you might just told me for one sec sorry i've got another call coming through hello hi steven it's um matthew at the front desk here i have um mr johansson sure sure steve systems way down [Music] i can't actually find a reference number for um mr jay hassan's account um i've been through the system and there's no oh all right uh look no this would just be a a minor mistake i'm sure we can sort it out in a minute don't worry sorry about this look if it comes to the office we'll um okay we're sort of where is he look um how's the family oh they're all good and the person at the branch saw no need or really had no need to to follow up because he thought mr salko investment advisor from the asp is now going to handle the issue there's no bond number no this is unusual look um i'm sure it's something we can straighten out if you can just let me know who you dealt with with regards to this steven vs selco stephen oh look i can just put you through to steven right now no i know excuse me i don't want to speak to him can you put me on to somebody higher up please i have three million dollars invested in these bonds okay i understand you're a little concerned sally so i'll just put you through to the asb securities and i'm sure there's someone who can help you there okay sally just one moment so once this investor had spoken to someone at the asb that triggered uh some scrutiny on that investors accounts and then they were able to see from you know quite easily that stephen had moved significant sums of money into accounts he controlled [Music] hey stephen paul barnes internal fraud investigation team can avoid [Music] [Music] foreign [Music] let's think about the impact on the vasa family i don't know these people directly but one wonders firstly there's a prison sentence that's four years minimum at least there's no doubt of guilt that's an admission of guilt the shame around that there's hurt around that something's happened it's not the kids it's not the kids just stay there just [Music] [Music] [Music] [Music] i was reading the heroes on sunday and saw his picture and then i started reading and i was just absolutely shocked i just never thought he'd do something like that at all wasn't i wrong i was scared when i first read it i knew i'd be investigated because of the money in my accounts in fact i was terrified i was trying to hide everything from my family and because this has come out i've had to open up and tell my whole family what's going on what happened and what i used to do for a job after what he said about me i hate him i do just for the lies just hate him why why did you lie and say i bribed you because it's not true he was here i'd probably smack him in the face i couldn't believe it i just could not believe that stephen that nice person who was the so-called friend could could have done that couldn't believe it it's not just the dollars that these characters got away with it's all the faith and trust in the good side of people and and that the world is a safe and reliable place i'm sorry got it wrong this time once he had been found out once he was confronted with the evidence he didn't attempt to to deny it um and he came into the office and he explained how it was he'd gone about committing the fraud at that point we hadn't had the opportunity to look at every investor's statements and accounts you know we're still amassing that information so we relied on him quite a lot from that interview and to that to the end he was um he was very good so he was cooperative to the extent that um he didn't attempt to deny but then we've got to remember that he didn't he didn't confess he didn't front up a police station and say i've committed a terrible offense if he hadn't been caught at that stage then he would have gone on in a letter to the asb mr vasaco explained how anyone could have could have committed this crime and i just don't buy that that's [ __ ] mr friscalco that just reduces every new zealander to the same level of moral inadequacy as him there are thousands of new zealanders working in positions of responsibility who are equal to the to the task and discharge that possibility without question he consciously chose not to nobody made him do it that's an outrageous comment the asp did repay all the funds that were stolen they also honoured the investments that mr biselko had promised to the investors involved which means the asb will continue making interest payments and their maturity payments out to i think 2014 is the longest investment that mr basalko had promised an investor so they felt great support from the asb as an asb customer i'm concerned that to know what went wrong here and how they fixed it and it won't happen in the future and i'm sure clients of other trading banks want the same sort of assurance and unfortunately with the asb not revealing what's happened here to some extent the the banking industry gets tarnished out of that and also the financial advisors get tarnished because to some extent this has been treated as a rogue financial advisor who's ripped his clients off and from my perspective that's not the case this was a rogue employee who ripped his employer off [Music] i think some of the lessons that the general public should take from the from this case is that you always treat an investment as business or not personal here we go oh for you if you are offered guaranteed returns from an investment you should be quite skeptical of an investment of that nature and government guaranteed government guarantee that's good any investment has some element of risk to it and also to be very concerned about secret investments investments that are privileged i'm only offering this investment to you because and you can't talk about it because it's secret in terms of the one investor that finally twigged she acted on just a real gut instinct and that something didn't sit quite right with her and and there's certainly no harm in that you know these people are there to provide a service to you and if it means you've got to ring up once a week so be it it's your money if possible have internet access to be able to check your investment online and i think the other thing to be concerned about is to be very aware of a relationship with an investment advisor where you are not given the opportunity of contacting somebody else in the organization or in another organization sorry about this look it comes the office will um sort out know talk to someone else get a feel be very careful don't assume that what's being offered you buy something that's really good is necessarily really good it might not be [Music] everyone's heard of mr versace describing himself as mr invincible what happened was that quite early on in his interview when he was busy apologizing for what he'd done rather than explaining and what he'd done he described it as he was him taking this money stealing this money and living a high life he felt like he was mr invincible and it struck me that by the time he came to be interviewed by us sitting in a room with a camera in front of him knowing that he was facing years in jail he probably didn't feel like mr invincible anymore [Music] [Applause] [Music] supporting local content so you can see more of new zealand on air

Channel: Real Stories

Views: 419,180

Keywords: Real Stories, Real Stories Full Documentary, Real Stories Documentary, Full length Documentaries, Documentary, TV Shows - Topic, Documentary Movies - Topic, full documentary, full episode, Stephen Versalko, The Banker The Escort & The $18 Million, stephen versalko now, new zealand fraud documentary, fraud documentary 2021, fraud documentary 2020, fraud documentary bbc, accounting fraud documentary, financial fraud documentary, banking frauds

Id: iwB7MkdA8EA

Length: 45min 10sec (2710 seconds)

Published: Tue Aug 24 2021

Reddit Comments

[u/Dadskitchen]

When you're using new money to fund development of ships you sold a decade ago...that's kinda whats happening with jpegs. Borrowing off Peter to Pay Paul. Just substitute "investment specialist" with " game developer" as the guy says, there is no legitimate way to make good.

[u/morbihann]

Its almost like Ponzi scheme.

[u/xBMxBanginBUX]

Thought you were leaving the internet behind and buying a narrow boat?