ASB suing Versalko's $2.4 million prostitute

Banker Stephen Versalko ripped off $18m. Photo / Bradley Ambrose

The prostitute given $2.4 million by fraudulent banker Stephen Versalko is far from the high end of the escort business.

Instead, she is a mother of one who worked at an Auckland brothel, the Pelican Club, and is closer in age to Versalko's 49-year-old wife Megan than the many of the other prostitutes that she used to work with.

The prostitute's daughter, like Versalko's only girl, is a teenager.

While the Pelican Club charges its staff out at $210 an hour - although clients can pay up to $1500 a night - the women earn considerably less. By comparison, celebrity stripper and escort Lisa Lewis advertises her services at $7000 a night.

The ASB Bank is now suing the prostitute for the $2.4m Versalko paid her.

The Herald on Sunday is prohibited from revealing the woman's identity because of suppression orders granted by the Auckland High Court.

The auburn-haired woman said much of what had been written about her by the media was misconstrued.

But she could not correct it, she said.

She had been told by her lawyer - a Queen's Counsel - that anything she said publicly could harm her in court.

The orders were made in a legal case taken by the ASB Bank - which was ripped off to the tune of $18m by its Remuera branch investment advisor Versalko.

The case is an effort by the ASB Bank to recoup as much money as it can.

Versalko spent most of the money on property and lifestyle - including at least $3.4m on prostitutes.

Evidence given in the fraud case at the Auckland District Court stated that Versalko had paid for the services of a number of prostitutes.

Among those were two who profited well beyond their hourly rate - including the woman now being sued.

The bank has taken a legal order out over her home.

The "caveat" is the same procedure the ASB Bank used to seize and then sell Versalko's family home and Coromandel holiday home.

The bank claimed in the document that the woman had a lifestyle property, worth just over $800,000 through "institutional constructive trust" using funds belonging to ASB Bank.

A successful claim of "Institutional constructive trust" would mean the prostitute had legal title over property she paid for with money she did not deserve.

The legal argument is that the money is effectively held in trust for the body that it rightly belongs to - the ASB Bank. The woman also owns, or has interest in, other property.

ASB board of directors chairman Gary Judd QC said the bank should "absolutely" be suing the prostitute for the money. The comment comes after two weeks of silence from bank executives who industry colleagues say should be embarrassed that Versalko was able to steal $18m over nine years.

Judd said the ASB Bank's image had not been harmed by the massive fraud. "Reasonable people would understand that when you have a large number of people, unfortunately, occasionally, there will be someone amongst them who seeks to behave inappropriately." The bank could not release details of how the fraud was carried out.

Reports in the Herald on Sunday of staff feeling betrayed by Versalko were understandable, Judd said.

Referee regrets letter

An ASB customer who wrote a glowing reference as fraudster Stephen Versalko faced his sentence said she would never have agreed to her letter being used in court had she known what the stolen money was spent on.

The woman agreed to allow a letter she had written six months ago to Versalko to be used in sentencing, after being contacted by Versalko's wife Megan.

But the woman said on Friday that if she had known the scale of the fraud, and that the money was spent on prostitutes, "I would never have written it. He used to speak so warmly of his wife. I just don't know how she would feel".

The letter writer - whom the Herald on Sunday has agreed not to name - wrote to Versalko in September, just weeks after he had been identified as the ASB Bank staff member fired for a multimillion-dollar fraud.

It said: "You are, without doubt, one of the nicest people in business I have ever dealt with. One can lose one's way in life but there is always a way back."

The other letter writer, who met Versalko through their daughters, said he stood by his reference. The letter said Versalko was "one of the most dedicated and loyal fathers I have had the pleasure of meeting".