By Tony Field
Following revelations of millionaire fraudster Stephen Versalko’s extravagant lifestyle, the question on every one’s lips is how did he manage to blow so much of it on wine, women and travel?
He cut a sorry-looking figure in the dock - but for years Versalko lived the high life. The former banker spent $2.2 million on credit cards, much of which went on travel and wine.
It was also revealed yesterday that Versalko spent $3.4 million on two prostitutes.
The Prostitutes Collective says the amounts are unusual, but it's not unheard of for men to spend large sums on their favourite escorts.
“It sometimes happens that a client takes a particular shine to someone and falls in love and makes a deposit on a house, or buys a house, or sponsors overseas trips,” says Catherine Healy of the Prostitutes Collective.
Versalko even took one of his prostitutes to Dubai.
So why didn't his spending raise suspicions?
Versalko told people he was making money from his own personal investments. The Serious Fraud Office says Versalko invested $190,000 in an account with CMC Markets, turning it into $345,000 - a profit of $155,000.
Fraud investigator Wayne Kiely, of Paragon Investigation, says many conmen - even those who get caught - are skilled with money.
“That is quite a common theme we see, there are very talented people, but often they put their talents in the wrong area,” he says.
But Versalko's theft and his spending accelerated rapidly from 2007 - especially as he was forced to pay larger and larger amounts to the original investors to keep his ponzi scheme going.
Deloitte forensic accountant Barry Jordan says the scheme was doomed - what's surprising is it lasted so long.
“Nine years - it's a long time to keep all those cards in the air, if you like and allow the thing to carry on,” he says.
Fraud investigators say people should be wary of any investment promising unusually high, or tax-free, returns.
“If you are a bit suspicious of your broker you are dealing with, ask if there is someone above him, or someone else you can speak to, because usually these guys have to control it themselves,” says Mr Kiely.
Another good idea is to ask someone else at the same office to confirm the bank account where you are depositing money.
Investigators say it is impossible to eliminate all fraud but investors can protect themselves by remembering that old saying, “if it looks too good to be true, then it probably is”.
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