A BANKER described as a rising star has been jailed for two years after embezzling almost £400,000 from Morgan Stanley and blowing the cash on a lavish lifestyle.

George Kalmar, 39, had junior employees transfer money between accounts between September 2012 and February this year and took the cash.

He blew the money on "adult" entertainment, top restaurants, the Savoy hotel and prostitutes in London and overseas.

As the vice-president of the European Settlement department Kalmar knew how the bank procedures worked.

Suspicion was aroused when it was spotted that sizeable amounts had been transferred between accounts and large single payments of up to and over £70,000 were made to a number of bars and restaurants. Two employees were sacked and two resigned.

Represented by John Scott, QC, Kalmar, from Glasgow, pled 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.

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 "rising star" within Morgan Stanley. 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.

The court heard that staffing issues last year meant the department was under pressure.

Procurator-fiscal depute Laura Millar said: "Kalmar 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 scrutinised."

After drawing up the request for the transaction, he sent the majority to junior analysts for processing via the internal messaging system instead of the more traceable email system.

On the one occasion that the instruction was queried, it was referred up the chain to Kalmar, who gave the instruction that 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.

Payments were tracked and investigated and then other transfers attracted attention. In March, he made "voluntary admissions".

The court was told that by the time the fraud was discovered Kalmar had spent or transferred most of the money, the majority on "adult" entertainment and drugs.

Ms Millar added the "female associates" referred to in payments were women who provided adult entertainment and some were prostitutes.

The court heard that between 2012 and 2013 Kalmar's wages were £71,256 including an £11,000 bonus paid in February.

Mr Scott told the court Kalmar was once an "excellent fencer" and to the credit of the University of Pennsylvania made it on the All American List three times.

But Kalmar moved to New York for work and found himself in "bad company" and in the late 1990s was jailed for 40 months for assaulting a drug dealer. He moved to Hungary and in 2006 passed background checks for Morgan Stanley. A hearing under the Proceeds of Crime Act will take place at a later date.