Loans officer defrauded Commonwealth Bank of $3.5m

Commonwealth Bank loans officer George Vrettakos who committed a $3.5 million fraud on the bank as well as spent up big on cocaine, girls & fine dining, was not even reported to police, letting him to continue working in the financial services sector.

George Vrettakos told the bank that others were implicated in his behaviour; however, the bank seems to have never followed up the information he provided.

Starting in 2008, Mr George Vrettakos exploited weaknesses in the bank’s internal systems in order to create fake loan accounts that he used to buy a million-dollar home as well as fund a lifestyle to match.

“I’ll tell you what I got, honest. No crap,” he told the internal investigators of the bank after they caught him finally in 2010.

“We had beautiful lunches. We had beautiful wines. We snorted coke – a lot of it We met a lot of girls. That’s what I got out of it. Stupid.”

The bank identified the fraud early that year & Mr George Vrettakos made a full confession; however, he said that he wasn’t the only one involved.

“I’m not gonna sit there and cop it because, yes, I did wrong, but I wasn’t the only one. I was taught how to do it,” Mr Vrettakos said during a recorded interview with the bank’s group security department obtained by The Age.

“If we want to talk seriously, there is a hundred witnesses for stuff that was being done, and stuff that was being consumed, stuff that was being drunk, stuff that was being snorted.”

‘High standards of personal integrity’

The bank didn’t even care to report the scam to police or regulators. Instead Mr George Vrettakos was sacked as well as offered a confidential settlement deal that asked him to pay back up to $2 million of the stolen funds.

“George, as you are aware our profession is founded on very high standards of personal integrity and conduct which requires absolute honesty,” the CBA’s regional GM wrote in Mr Vrettakos’ termination letter.

“The bank considers your actions to be a serious breach of the bank’s lending policies and statement of professional practice … You should comply with the law in all your activities.”

Even when Mr George Vrettakos couldn’t repay $300,000 he owed the bank under the settlement agreement, the bank didn’t report him to police.

The bank made some police report this week after The Age raised questions about this case. It said it will “continue to assist authorities where we can”.

According to a CBA spokesman, the bank currently accepts that “more could have been done” in order to report Mr George Vrettakos.

“If a similar matter emerged today our approach is to notify police and authorities.”

When asked that if they had investigated his allegations about his colleagues, the bank said: “allegations – particularly where they are made by people involved in doing the wrong thing – need to be supported by evidence”.

The CBA’S approach enabled Mr George Vrettakos to continue his job in the finance industry, joining the Bank of Queensland in about 2012.

A Bank of Queensland spokeswoman said that all new staff were subjected to police as well as Australian Securities & Investments Commission screening searches; however the “BOQ was not aware of any issues relating to Mr Vrettakos at the time of his employment”.

Mr Vrettakos left the BOQ when the bank eventually learned about his history.

After his departure from the Commonwealth bank, Mr George Vrettakos also ran a “consultancy business” that promised huge profits for short-term investments.

It is not known whether any of these returns materialised, although Mr George Vrettakos wrote many high-value cheques to investors as well as associates – one for $4.4 million – which bounced, as per documents obtained by The Age.

Hiring a bankrupt

Mr George Vrettakos started at the Commonwealth Bank in late 2007 as a mobile lender.

However CBA’s screening practices couldn’t discover that 1 year earlier, he was still serving out a bankruptcy, a fact that usually would exclude someone from working in the financial industry.

Then within months of joining the Commonwealth Bank, Mr George Vrettakos started misappropriating bank funds.

It took the CBA 2 years before they identified the fraud, by which time George Vrettakos had already created 3 “fictitious” line-of-credit accounts worth $3.5 million linked to fake customer profiles & secured by properties belonging to innocent parties.

During his interviews with the bank security officers in 2010, George Vrettakos made full admissions about his conduct as well as implicated several other colleagues, including his manager.

“I did it. I did it because I was stupid, I did it because I wanted to get rid of my debts and I wanted to buy a house. And then in my stupidity I thought I was going to put it all back and no one would ever know. But the extra money, that wasn’t just me,” Mr Vrettakos said.

Recordings of the interviews as well as a sworn statement from Mr George obtained by The Age also refer to a culture where cutting corners, flouting regulations, & rorting funds had become routine practice.

“I can go back and tell you how the loans were done – and it wasn’t just by me – how we’d play around with the stats,” he said.

George Vrettakos also stressed in the interviews that how his behaviour had changed after he became engaged.

However, he also described how easy it was for him to circumvent compliance policies of CBA by manipulating poorly trained staff.

The bank found several caches of customer files from his home during the investigation, including land titles as well as transfer documents from deals that he was trying to conceal.

A CBA spokesman said that Mr Vrettakos’ actions had no financial impact on any third parties or customers. “CBA incurred a financial loss as a result of this employee’s actions,” he said.

The bank obtained freezing orders over George Vrettakos assets in 2010, which were then removed when he agreed to the settlement deal.

Mr George Vrettakos, who was declared bankrupt for a 2nd time in the year 2015 over an unpaid legal bill, is at present employed as a GM at a Melbourne debt collection agency.

Arrogance & complacency

The CBA’s 8 years delay in reporting the former loan officer would infuriate a large number of people who have faced legal action after falling behind on their mortgages with nation’s biggest lender.

The bank received a battering during the Royal Commission, where the bank has been forced to concede a long-running record for charging customers – including the dead fees for services that they never received.

A report by the Australian Prudential Regulation Authority also uncovered an established culture of arrogance & complacency at the bank that contributed to repeated probity failings as well as breaches of its obligations under the Corporations Act.

Also, CBA has been compelled to set aside $375 million for covering fines it expects to face from a money laundering compliance scandal, as the ongoing scandals started to impact on the bank’s bottom-line.