Similarities between New York's Ponzi King and and an Auckland investment manager led an elderly client to contact officials. Guess what?
Strangely enough, some small bit of good has come from Bernard Madoff's $50 billion fraud.
According to the New Zealand Herald, a documentary about the notorious U.S. fraudster, which ran on local television, led an elderly woman in Auckland to contact bank officials about her investment manager. That call, in turn, ultimately led authorities to charge an Auckland Savings Bank manager with fraud.
And not just any fraud, mind you. On Wednesday, banker Stephen Versalko was sentenced to six years in prison for running a Ponzi scheme that duped some 30 investors — mostly elderly women — out of $12.5 million.
That makes Mr. Versalko the biggest scammer in the country's banking history — the Kiwi Madoff.
Details of the case were revealed in court today.
Turns out the viewer-turned-whistleblower first became suspicious of Mr. Versalko because he was the only manager she ever dealt with at the bank. Then in August, she watched a documentary about Mr. Madoff. According to local press reports, it struck the investor that the Ponzi King's MO was eerily similar to the way Mr. Versalko operated.
A call to the bank quickly confirmed the investor's worst fears. Her $3 million investment portfolio was a fiction. Mr. Versalko eventually confessed to duping not only the whistle-blower, but about 30 other investors over a nine-year period.
He reportedly told local investigators that after years of fooling investors, he thought he was “Mr. Invincible.”
Turns out Mr. Invincible had some weaknesses. He spent about $3 million on luxury properties. He also put more than $1 million on his credit cards, including $300,000 for stocking his wine cellar.
In addition, he had long-term arrangements with two prostitutes. Price? $2 million.
And getting busted by a little old lady? Priceless.
