A Commonwealth Bank loans officer who perpetrated a $3.5 million fraud on the bank and spent up big on cocaine, “lots of girls” and fine dining, was never reported to police, allowing him to continue working in the financial services sector.

Former Melbourne-based mobile lender George Vrettakos told the bank that others were implicated in his behaviour but the bank appears to have never followed up the information he provided.

Mr. Vrettakos exploited weaknesses in the bank’s internal systems, starting in 2008, to create fake loan accounts that he used to purchase a million dollar home and fund a lifestyle to match.

“I’ll tell you what I got, honest. No crap,” he told the bank’s internal investigators after they finally caught him 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 and Mr. Vrettakos made a full confession but said he was not the only loan officer 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 did not report the scam to police or regulators. Mr. Vrettakos was instead sacked and offered a confidential settlement deal that required 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 general manager 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.” [PDF]

Even when Mr. Vrettakos later failed to repay $300,000 he owed the bank under the agreement, the bank did not report him to police.

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

A CBA spokesman said this week that the bank now accepts that “more could have been done” to report Mr. Vrettakos.

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

Asked if they had investigated his allegations about 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 Commonwealth Bank’s approach allowed Mr. Vrettakos to continue his career in the finance industry, joining the Bank of Queensland in about 2012.

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

The Age understands Mr. Vrettakos left the Bank of Queensland when the bank eventually learned about his history.

In the years after his departure from the Commonwealth bank, Mr Vrettakos also ran a “consultancy business” that promised massive profits for short-term investments.

It is unknown whether any of these returns materialised, though Mr Vrettakos wrote several high-value cheques to investors and associates – one for $4.4 million – which bounced, according to documents obtained by The Age.

Hiring a bankrupt

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

But CBA’s screening practices failed to discover that 12 months earlier, he was still serving out a bankruptcy, a fact that would normally exclude someone from working in the financial services industry.

Then within months of joining CBA, Mr Vrettakos, by his own admission, began misappropriating bank funds.

It took the CBA two years before they detected the fraud, by which time Mr Vrettakos had created three “fictitious” line-of-credit accounts worth $3.5 million linked to fake customer profiles and secured by properties belonging to innocent parties.

During three interviews with bank security officers in early 2010, Mr Vrettakos made full admissions about his conduct and implicated several 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.

Roughly how much do you think you’ve got out of this yourself?

“Personally, I’ve got the house – which I’m going to pay back. I’ve got my father’s and mother’s loan – which I’ve got to pay back. Personal gain, cash in my account, I’ve got nothing … apart from the house. I’ll tell you what I got, honest, no crap … 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.”

Recordings of the interviews and a sworn statement from Mr Vrettakos obtained by The Age also refer to a culture where flouting regulations, cutting corners and rorting company 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.

Mr Vrettakos, who declined to comment for this story, stressed in the interviews how his behaviour had changed after he became engaged.

But Mr Vrettakos also described how easy it was to circumvent CBA compliance policies by manipulating poorly trained staff.

During the investigation, the bank recovered several caches of customer files from Mr Vrettakos home, including land titles and transfer documents from deals that he was attempting to conceal.

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

In 2010, the bank obtained freezing orders over Mr Vrettakos assets, which were removed when he agreed to the settlement deal.

Mr Vrettakos, who was declared bankrupt for a second time in 2015 over an unpaid legal bill, is currently employed as a general manager at a Melbourne debt collection agency.

Arrogance and complacency

The CBA’s eight-year delay in reporting the former loan officer is expected to infuriate scores of Australians who have faced heavy-handed legal action after falling behind on their mortgages with nation’s biggest lender.

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

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

CBA has also been forced to set aside $375 million to cover fines it expects to face from a money laundering compliance scandal, as the ongoing scandals begin to impact on the bank’s bottom-line.

Several senior executives were grilled over the bank’s repeated failures to disclose violations of banking regulations to corporate and prudential regulators.