smh article on iasbet

This is an article from the SMH regarding online gambling with IASBet. CBA will have a good chance to recover its stolen gambling money, and looks like IAS is facing a legal challenge from CBA regarding this incident.
Cheers
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Mug banker blew $19m at the track
October 18, 2003
By Matt Wade
October 18, 2003


"He'd keep betting in huge amounts until all the money was gone" . . . Kim Faithfull, centre, after being charged. Photo: Sean Cowan
He was the bank manager turned bank robber, but no one noticed, writes Phil Cornford and Sean Cowan.
Once a week, usually on a Thursday night, up to $400,000 would arrive in an internet betting account with the Darwin-based International All SportsBet Limited. It signalled that the bank manager, the biggest punter on its books, was up and running.
Sitting at a keyboard in the Commonwealth Bank in Karratha, 1700 kilometres to the south-west, manager Kim David Faithfull was gambling on horses with stolen money, a theft that would eventually total $19 million.
"He'd keep betting in huge amounts until all the money was gone," a former IASBet Darwin trading room employee said. "You couldn't miss him. My first reaction was, who is he? I was told his name. Faithfull. Yeah, but who is he? I was told he was a bank manager. It was common knowledge but it wasn't said out aloud."
For five years, waiting until his staff had gone home, Faithfull, 36, used the West Australian bank's computer to transfer the stolen funds directly into an IASBet online betting account with the Bennett Street branch of the Commonwealth Bank in Darwin.

He took the money from term deposit accounts and foreign currency notes.
Despite the frequency and size of the thefts from 1998, and regular audits, his activities were not detected. The Commonwealth had no idea one of its managers was robbing it blind until Faithfull gave himself up.
But first he made a frantic effort to punt his way out of deep trouble. Trying to recover $8 million he had already lost, he stole, bet and lost another $11 million to IASBet in six months. His weekly deposits into the IASBet account were never less than $200,000 and often as big as $400,000.
He was IASBet's biggest punter. "Eight to 10 times bigger than anyone else," the former employee said. Alarm bells should have been ringing. If they did, they went unheeded.
His extraordinary plunge was monitored by IASBet's founder and executive chairman, Mark Read, 53, first in Darwin and then in Melbourne, when he moved there late last year.
Once Australia's biggest bookmaker and one of the canniest turf gamblers in the country, Mr Read knows how to manage big risks. IASbet's rules stipulate that its maximum exposure on any one bet is limited to $200,000, except by "prior negotiation". There was no limit on Faithfull. His average bet was about $20,000 but he went as high as $70,000. None was refused.
"Faithfull's bets were so erratic, they were a joke - if they weren't so big. That made them scary," a former employee said. "He bet on up to 20 races on a Saturday. He'd put a lot of money on no-hopers at long odds. Sometimes two in the same race. On the card, they had no chance - but what if he fluked it and won? He'd clean us out. There was so much money on that, Read often had to lay off [with other bookmakers] in a big way to protect himself."
But Faithfull seldom won. He had no judgement, no expertise, no clinical calm. He also had very little luck. "Occasionally, he'd have a big win," the former employee said. "He had about $70,000 on Northerly in either last year's Cox Plate or the Caulfield (it won both). He had more than $50,000 on when Private Steer won [The Stradbroke at 9-4] at Eagle Farm.
"But he was your classic mug punter. I was told that in all the time that he bet with us, he made a withdrawal of about $30,000 (from his betting account) only once. He just kept feeding it in and burning it up. But it wasn't his money, was it?"
Faithfull appears to have been a compulsive gambler. He stole to feed an addiction, not to gather wealth. His only substantial investment was a house in Perth's East Victoria Park, which he bought for $135,000 in 1996. But he didn't sock away one cent of the $19 million. He blew it on slow horses.
He could have continued stealing. No one had the slightest suspicion.
The back-pocket with the 1991 premiership-winning Karratha Kats lived modestly on his $45,000 salary in a bank house with his de facto wife and five-year-old son - a bit of a local hero among the down-to-earth citizens of Karratha (pop. 11,000) on the edge of the Pilbara iron-ore deposits, 1500 kilometres north of Perth.
Yet he gave himself up.

Faithfull wasn't the only punter who was betting enormous amounts of stolen money with online bookmakers in Darwin.
Dennis Craig Telford, 39, who was company secretary and chief financial officer, has pleaded not guilty to 59 charges of stealing $22 million from K&S Corporation at Mt Gambier, South Australia, owned by the trucking magnate and racehorse breeder Alan Scott.
But in a civil action by K&S, a Supreme Court judge, Justice, Anthony Besanko, found that Telford, who was paid $120,000 a year, unlawfully transferred $11.5 million between August 2001 and April 2002.
This time the recipient was Sportingbet Australia, British-owned and the biggest of the three online betting establishments attracted to the NT by big tax benefits - much to the chagrin of southern bookmakers, who saw an estimated $1 billion a year of punters' money go north.
The judge found the unlawful payments were gambled at first with Sportingbet subsidiary Number One Betting Shop in Vanuatu and later with with Sportingbet Australia in Darwin.
The company's lawyers claim that Sportingbet heard there was a "big hitter in South Australia and went after him". Justice Besanko found that both NOBS and Sportingbet knew Telford's identity, although he bet under the name of Craig Teller. He found they had "wilfully and recklessly failed to make inquiries an honest and reasonable man would have made" and ruled that K&S was entitled to $2.78 million held by Sportingbet. The bookmaker is appealing.
The action is being observed with great interest by lawyers for the Commonwealth Bank.

Faithfull's final flutter with IASBet was on Saturday, August 2. The races were at Rosehill in Sydney, Caulfield in Melbourne, Doomben in Brisbane and Cheltenham in Adelaide. The next day, Faithfull drove to the bank. Alone in the building, he wrote a note to two of his staff, confessing to stealing big sums of money.
He did not turn up at work on Monday. When his note was found, it was faxed to the bank's head office in Perth. Auditors began investigating, and the next day police were informed. By then, Faithfull had contacted the bank and told them he was driving to Perth with his family to surrender himself.
On Wednesday, he left his wife and son at the suburban home of his sister and went to the bank head office in William Street, where he was interviewed all day by bank investigators.
The next day, he was taken to the Major Fraud Squad. At 5.30pm, he was put in the police lock-up. It was his first taste of jail, and it was a brief one.
In the morning, Faithfull was charged in Perth Magistrates Court with theft as a servant, the biggest case of its kind in Australia. The prosecutor did not oppose bail, which was set at $400,000 on the condition he report every second day to police.
Later in the week, a short statement of facts was given to the court and Faithfull pleaded guilty. He is to be sentenced next Friday. The maximum penalty is 10 years' jail.
Since then, Faithfull has been helping bank investigators trace the money he stole, which totalled $18,998,309.36. He will be the key witness for the bank in any action to recover the money.
Faithfull told police that he had informed IASBet that he was a bank manager. He used an online account at the branch to transfer the funds. He gave IASBet the Karratha branch telephone and fax numbers and was contacted at least twice at the bank by IASBet.
The stolen funds gambled with IASBet and Sportingbet totalled $30 million.
And the response of the NT betting administrators?
The department of Racing, Gaming and Licensing has written to the online bookmakers asking what investigations they undertake to check suspicious transactions.
Mr Read said: "I never confirm or deny who my clients are. The people we deal with want discretion and we respect that. Why don't you ask Mr Faithfull?"