George Kalmar embezzled £400,000 from Morgan Stanley to spend on drugs A banker described as a "rising star" embezzled almost £400,000 from Morgan Stanley and spent it on drugs and prostitutes. George Kalmar, 39, had junior employees transfer money between September 2012 and February this year and pocketed the cash. He spent the money on "adult" entertainment, top restaurants and female associates in London and overseas. As the Vice President of the European Settlement department Kalmar knew how the bank procedures worked and had an "encyclopaedic knowledge." He was caught when it was noticed sizeable amounts had been transferred between accounts and large payment over £70,000 were made to a number of bars and restaurants. Two employees were sacked and two resigned after Kalmar's crime came to light. After investigations, Kalmar was brought in from his holidays and admitted everything. Kalmar from Glasgow, pleaded guilty at Glasgow Sheriff Court to embezzling £387,891 and £23,500 by transferring money to dormant accounts then transferring it to personal and other accounts. Sheriff John Baird sentenced him to two years in prison on Tuesday. The court was told Kalmar began working for the bank in January 2007 in Budapest, but later moved to the headquarters in Glasgow. He was once described as a brilliant banker and "rising star" within Morgan Stanley. His former staff said he is "charismatic" with a "powerful personality." He gave instructions to junior staff to make payments into dormant accounts which were later transferred into his personal accounts or to accounts of associates. Procurator fiscal depute Laura Millar said: "Between September 2012 and February 2013 Kalmar used these dormant accounts and a Morgan Stanley account to transfer Morgan Stanley funds totalling £387,891 and £23,500 to a number of different bank accounts - three of his own. One with Lloyd's Bank which he held jointly with his wife and two with Citibank both in his sole name. The other accounts to which Kalmar directly transferred funds either belonged to, or were linked to a number of female associates in London and Albania. The court heard staffing issues in 2012 meant the department was under pressure. Miss Millar said: "Kalmar was fully aware of the pressures on his department. He also knew that as he was not only significantly senior and more experienced than many of those who worked for him, but trusted by them. Any input request made by him was unlikely to be questioned or closely scrutinized. After drawing up the request for the transaction himself, he sent the majority of them to junior analysts for processing - via the internal messaging system, instead of the usual and more traceable email system. On the one occasion the instruction was queried, it was referred up the chain to Kalmar who gave the instruction the transaction should go ahead. Investigations were made in early 2013 into the activity of the accounts Kalmar was dealing with and in particular single large payments of up to and over £70,000 were questioned. In March, he was brought back in from annual leave for a meeting and made "full and voluntary admissions." Miss Millar told the court: "Following the discovery of Kalmar's actions several senior managers who had either authorised or settled the various cash transfers left their employment with the bank. Two were dismissed, one was allowed to resign and another had already intimated his resignation. The court was told that by the time the fraud was discovered Kalmar had spent or transferred most of the money, the majority of it spent on "adult" entertainment and drugs. Miss Millar added that "female associates" are women who provided the adult entertainment and some of them are prostitutes. There were other payments including £5500 spent at the Tower Bar and Brasserie in London and numerous cash withdrawals of up to and including £6000. Mr Scott told the court Kalmar moved to New York for work and found himself involved in drugs and "bad company" and in the late 1990s was jailed for 40 months for assaulting a drug dealer. A hearing under the Proceeds of Crime Act will take place at a later date.