The Great Bank Embezzlement Case In Melbourne. The Charge Against an Ex-Auclander (From the " Ago," January 30.)

Te Aroha News, Volume III, Issue 142, 20 February 1886, Page 4

The Great Bank Embezzlement Case In Melbourne. The Charge Against an Ex-Auclander (From the " Ago," January 30.)

Alexander Lawrence, late paying toiler of the City of Melbourne Bank, waa brought up at the City Court on Friday afternoon, before Mr Call, P.M., on a charge of embezzling the sum of £9,000,th0 money of the bank. Mr G. Stewart appeared for the prosecution, and Mr Gillott for the defonco. J ohn Shiels said he was acting manager and inspector of branches of the City of Melbourne Bank (Limited) which position ho had occupied since last April. The prisoner had boen'm tho employ of the bank for about six yoara, and for tho last four years ho was paying teller. His duties wero to pay all cheques and drafts drawn on the bank, and ho had to keep an account of these in tbo teller's book. He kept also other books. From tho exchange clerk ho recoived the notes sent in each day. He had to take over tho cash from the roceiving toller at tho end of oach day. Ho kept a rocord of his payments and receipts in the tellor's cash book, and of the daily balance of the ' cash entorcd ia tho cash specification book. It was his duty to pick out tho notes That were ti be -withdrawn from chculation and hand them from titno to time to tho clerk whose duty it was to receive them. He had to mako entries in a book whon a parcel of these notes was made tip, and obtain a clerk's eignaturo as a vouchor. This voucher had to be initialled by the accountant before tho entry as to the notes was made in tho book©. He should dobit in the tellor's cash book tho amount of thoso notes initialled, and credit himself with tho sum to tho unissuablo noto account. That entry would show that tho notos had passed out of his hands to the propor ofiicor. On tho 13th October, witness, with the accountant, counted tho prisoner's cash, with the result that it was found to be deficient £99 7 a 4d. In consequence of that deficiency, ho was suspended as teller. He did not leavo tho service of tho bank, but was employed in othor duties until tho 30lh November, whon ho left. He failed to account for that deficiency. Ho said there had been some mistake made, which he could not explain, On the 10th October the messenger, whilst cleaning out the floor under the tollor's counter, found two -CoO-notos. That discovery presumably accounted for tho deficiency. Between the loth October and tho 80th November, prisoner being constantly employed in the bank, had access to the bookrf during business hours. Aftor ho loft an investigation was made into his books, Last Tuesday woek, in consequenco of tho result of another examination, he had an interview 7 with accused, who, being sont for came to the bank. Witness went to piisoner's house first. Accused said he know why witness had come for him, and ho stated ho had committed tho defalcations to tho amount of £000. Ho had concealed these defalcations, ho said, by making false entries, and manipulating cancelled notes. Ho said he had passed the vouchers through the cash book, and had afterwarde destroyed them. After tho cash book had passed out of his hands he concealed the deficiency by making alterations in tho ledger and the abstract of ba'anco book. When he camo into tho bank after being sent for he repeated this statement to tho accountant, and pointed out to him and witness a mimber of false entries in the books. He referred particularly to tho cash book, the general ledger, and the abstract of balance book. He afterwards signed a paper, in which he admitted having done this. The following was the state ment : — " On the 17th July last, expecting my cash to be counted, and it being deficient,l wrote out two vouchers debiting unissuable notes for the respective sums of £170 and £350, and passed the entries through my cash book ; the entries for these sums were passed through the general cash book the same day by the officer who wrote up that book from the two entiies referred to, and the vouchers were subsequently abstracted, and destroyed by me. The notes lepresenting these entries were not handed to tho uniesuablo noto clerk, but wero retained by mo, and this enabled mo to make up the amount of cash on hand when counted by tho diiectors on tho 21st July last" The statement waa written and signed by prisoner on the 21st instant in tho presence of the manager and the accountant. Those entries were made, witness '.said, with a view to hoodwink tho directors and deceive tho auditors. Another document, written and signed by accused, was read by witness, as follows: — "About two years ago I first commenced embezzling the bank a funds in my charge, and tho money thus obtained I spent from timo to lime in mining speculations. Tho total sum taken out of the cash belonging to the bank amounted at the date of my leaving the service to £9,000. When audits were made and the cash counted at various times I concealed my defalcations by making false entries in the unissuablo note account, holding at the same time tho notes represented by these entries., and thus apparently making the cash balance. Thus tho ontry of £7,613 which appeared in the teller's cash book of 2Sth May, ISSS, and in the great cash book of same date, was passed from a slip written out by me, which slip I subso* quently destroyed. The notes which the entry was bupposed to i-epresent were still held by mo instead of being handed to tho unissuable note clerk, and the deficiency in my cash thereby concealed when tho cash was counted. — A Lawrence, 21st January, 1886." The books had been since examined carefully, and it was found that alterations had been made as stated by prisoner in his confession. The unissuable notes were counted and chocked every half-year. There was no check on prisoner's entries in tho unissuablo noto account oxcept at the audits. The clerks in charge of these notes were frequently changed, and each one would balance as he took charge. At the time of this suspensionhe falsified theentriesin thegenei'al cash book, and altered the amount of noteß received from other banks in the teller's cash book, and hefaltered the the balance of the bank noto account in tho general ledger. He kept these three books up to the time of his suspension. The general cash book was kept by another clerk, Mr Smith. The four books alluded to wero in court. Several alterations were mado fn the weekly balances between the sth and the 12th October. Between the 30th September and the sth October the books showed several falsifications. Figuros had been erased, others had been substituted, and a wrong balance carried forward. The teller's cash book, now opened before witness, showed several erasures and incorrect figures substituted, the effect of which waa to falsify the balance brought forward by £9000. In the abstract of balances the prisoner's successor as teller was £9000 short. Cross-examined : The accounts of the bank were audited by professional auditors every half-year. They had to count the cash, but they did not count the mutilated notes. Had they been counted, the deficiency would have been discovered earlier. The directors were sup-

posed to count the cash and notea also, at intervals, as an additional check ; they did so threo or four times in the year. Alfred Ernest James, j'inior receiving teller in the bank, said : On September 30 last he had charge of tho greater part of the notes withdrawn from circulation. On that day he roceived no notes from prisoner. On September 30 he said he had a number of mutilated notos for wifcne3S to takoovor, pointing to a bundle of notes. Witness said he would tako them over as soon as he had time. That day, being rushed with work, he did not take these notos, but on tho morning of tho lsb or 2nd October he told prisoner he was rsady, and took over the notea from him. In tho moantimo the auditors had attended, who had counted prisoner's cash, and he then ha! these notes in his custody. In taking them over witness asked prisoner if he had kept these notes aside and not counted them with his cash, and he replied that he had kept them asido. It was witness's duty'to give the auditors a certificate as to the unissuable note account, and he gave a certificate for £28,048 on the Ist or 2nd October, which purported to show the state of the unissuablo note account on tho 30th September; it included tho sum of £9,383, made up of unissuablo notes which witness did not receive from prisoner until tho Ist or 2nd October. Andrew Burns, accountant, and one of the bank auditor*, said ho audited the City of Melbourne Bank accounts on the 30th September last. It wag part of his duty to check prisoner's cash, and he counted it. Ho found it quite correct accrding to the entries in tho cash book. Thoro was no sum of £0000 pointed out to him by prisoner as not to bo countod. All tho notes that wero produced by prisoner were counted b^ witnoss, who soveral days afterwards* got a certificate) from tho last witness as to tho unissuablo note account on tho 30th September. Having got thi& certificate, and having counted tho cash, ho found tho amount apparently correct. Tho Bonch committed the prisoner for •(rial.