Versalko a pathetic creep

Wayne Kiely, a senior investigator at Paragon New Zealand and a former head of security for New Zealand Post and Kiwibank, was surprised at how long Versalko managed to get away with the fraud.

While it can be hard to detect a "cunning operator" like Versalko, Mr Kiely said tighter checks and balances could have prevented the fraud.

"That's the big question: If the money went into an ASB account, and they didn't pick it up in an audit, then something is terribly wrong.

"There also should have been controls in place about employees opening accounts.

"You can only do something like this if you're in a position of trust."

It was that abuse of trust that led Judge Christopher Field to comment on the shock and betrayal felt by Versalko's victims.

Versalko's case was the largest employee theft investigated by the Serious Fraud Office.

At sentencing, prosecutor Patrick McCann read the previously suppressed summary of facts, including the revelations that Versalko had spent $3.4 million on two escorts.

Although Versalko co-operated with the SFO, Mr McCann said he misled investigators when trying to explain millions of dollars he gave to two women.

He initially told the SFO that the money was for ASB clients who had fallen on hard times, when in fact they were two prostitutes.

"I can understand his reluctance to admit that," said Mr McCann.

Versalko's wife, Megan, has previously stood by her man, but was not in court yesterday.

Defence lawyer Stuart Grieve, QC, said $1.2 million was paid to one of the escorts after she began blackmailing Versalko. He said Mrs Versalko was an innocent party to the fraud.

The SFO pushed for a starting point of 10 years and six months for a sentence and acknowledged Versalko was entitled to a 33 per cent discount for his early guilty plea.

Mr Grieve argued for a starting point of a sentence between eight and nine years for his client.