EXTENSIVE BANK FRAUDS.

Waikato Times, Volume XXXII, Issue 2578, 19 January 1889, Page 2 (Supplement)

EXTENSIVE BANK FRAUDS.

Till-: National Bank of Australasia has bec-n tin. , victim ot" another ox'i-psivi- :iml inexplicable fr.iud. G. orge Lake Or.yimu, i:iij.|i(!ciit:il clcik to she head oliioe oi the li:ii:|-., was arrested on Muii.liiy evoiiii.if, Aiign.-t lTth, while htr<.>liinir on the ISri-.-lit.!.')! Beach, on the spivific charge of ;-t<;.I itj t r 2 7 debentures, valued lit £2.7<'0, the pio:-r i-iy <-'f the bank, lmt the IM:ixillilllt! iIIMOUIIt of his defalcations ilrU cs!i:ii:iti-ii at. .€ 10,1-00. Ir, \Vi;u;ci ap;u-Mi from wtiiit i.s known oi Oi.yon.-.'outr-idi , fjii.-ciihitions, as well ;>.■• fr.nn the sUtements made in his cor.t\s-i<>:i So the ban!; authorities, that the theft* extend over a I j.cned of (it least 12 itionth.-, and :.iv, I l.cfi! r::ifi'ictl on in the- most .-ystc'n.atii i!.aimer, Their discovery on Satin daj was in sonic sense accidental, and then c.in he little doubt tliat had not, the bank ruu'vid information fioiri a. private s-tiiot the frauds uiijfht have been e.cinuiiu..(; undiscovered for an indefinite! time. Until the morning of Saturday Ins I Onyons whs regarded as ono of the 111031 intelligent ami trusted officers in thi service. Fra.'ii his first j-t-irt in the bank 12 years ago, his success has been ai brilliant as, it v.'as phcuompiial. At. 3( years of age he had risen through all thi grades in thi! complex internal system o; a irre'it haukiny house to the position 0: eonfidenta , . chief clerk, at a salary, muni fie.ent for the length of service, of £32( per annum. His fellow clerks envied bin' as one hiy-li in tirinas-erinl favour. His employer* Idandly approved of him as i\ younjf man of promise, whoso parlj yearn hid been marked by the soberac*. , of manhood, who bad given an additions guarantee of good behaviour by assuming the responsibilities of married lifts, and who would fittingly wear, us the crown of 1111 exemplary youth, the honours ami rewards (hat await the senior officer. Ii; the position which Onyons occupied il become a part of his duty, in conjunction with the chief accountant, Mr Q. V. Shillinglow, to take charge of the deben. Hires and similar securities lodged with (lie bank. Tin; document;) are placed in what in banking parlance is known at " double custody," that, is to say, they were deposited in a safe, only to be opened by two different keys, one of which was in the charge of the scuountant, the other in that of Onyons. By thi? arrangement it was rendered impossible that either oilicer could open the f-afe without the presence of the other, 01 without obtaining possession of his colleague's key As the bulk of the documents in the safe were debentures, ou which, as a rule, interest is due either on the 30th June and 31st December, or on tho 31st March and the. 30th September, it was necessary that the two officers should open the safe at least four times a year, and it was then their practico to take out the due debentures, and after removing the coupons to check the packages actually handle:! before restoring tbttm to the safe. At all other times the second key, without which the double lock could not ho opened, remained in the custody of Mr Shillinglow, or, when he was absent 011 holidays, in that of the assistant accountant. It will be seen from what has already been said on the subject that the safe must have been opened so recently as 30th September, il not later, and that the check method, for all that it was worth, was presumably carried out on that date. The occasion passed without any diseovery. The debentures were examined as they had been examined at regular intervals during the the whole of Onyons' tenancy as clerk in charge. I\othing was missed. The safe was closed again, and Onyons returned to his desk and the good opinion of his colleagues The (hiinnmcnl came in a wholly unexpected manner. On Saturday, Mr F. G. Smith, the chief manager, was visited at the bank by a customer, who gave him particulars of a financial transaction in which Onyons was concerned. Mr Smith was surprised to find that the model clerk of the bank, the young man whose modest wants and hum-drum life found a competency in £320 a year, was involved in monetary speculations extending into four figures. The fact came with all the violence of a new sensation. Alarm soon succeeded to surprise, and he was led to institute a number of inquiries, which soon convinced him that the confidential clerk had been abstracting the securities placed in his charge, and negotiating them outside. Mr Smith made all haste back to his office, and sent for Onyons, but found that he had left the bank. After a hurried consultation a special messenger was sent to Onyon's private residence in Weston street, Brighton, ami the defaulting clerk was half persuaded, half forced, to return to the city. In the manager's private room he made a stateinentVhich was tantamount to a full confession of the guile. The bank authorities have, so far, declined to disclose the actual nature of the avowal, but it is easily possible from other sources to derive the motives, the mode, and in brief, the whole history of the frauds from beginning to end. While Onyons was apparently devoting himself to an existence that began with banking duties and ended with household affairs, he was in reality plunging head over ears into the wild excitement ef the silver boom. The mild young banker's clerk, bending meekly over his desk from 9 to 5 o'clock every day was at heart one of those desperate gamblers who stake all on the ffiiiie, and know no alternative between fortune and the gaol. Onyons' mining speculations will probabiy never be known, nor do they greatly matter. The story of every honest man who dabbles in th'j stock market, and loses and wins, and wins and losses, uutil the gambling spirit takes possession of him, and he sinks from honour to madness and fiom madness to sin, is always the same. How desperately Onyons had become involved could scarcely be more eloquently told than from the plain business record of his transactions with the Mercantile Bank, iu which ho kept his account, In October, 1887, he lodged as security for an overdraft, four City of Fitzroy debentures for £100 each. Jn the course of the next few mouths ho paid in eight more of tho same debentures, and eight £100 Emerald Hill debentures, bringing up the total value of securities lodged to his credit to £2000. On 27th June of the present year ho lodged 55 City of Prahran £100 debentures, but withdrew them on the same day by a letter sent by tho messenger of the National Bank, in which he agreed to substitute 50 £100 borough of Kew debentures lent to him, so he stated, by his brother. Tho Kew debentures wore duly paid in the same day, and tho transaction for the time was tided over. On the 25th July the Kew debentures wore withdrawn and replaced by 10 borough of Footscray, 30 Colonial Sugar Refinery and two city of Melbourne debentures for £100 each, and a sum of £1000 in cash. Against these securities Ouyonn from time to tirce continued to draw, but mostly in small cheques, so as not to excite suspicion. With one exception, when u cheque for £1700 was presented and paid, his orders did not exceed £200 and their frequency appears to have passed unnoticed until the 11th of the present month. On that date overdraft, at the Mercantile Hank amounted to ;Coßn2, against which tho ban): held as security tho following debentures :— , „ .

making a total of £18,700 or, deducting the £1000 ctiah payment.of £17,700, representing, bonds actually abstracted from

the safe. A compiiri-nn of these figures led the mrinaiter of the Mercantile Bank, Mr V Miltidtre, to write to Ocyons, inti meting (hut his overdraft mu>t bo reduced. Onvnns replied immediately, to the effect that in tli.it case it would ho better for the bank to reali-e the securities in their possession. Acting on the.-c instructions, the delictittin's were "iibmittcd to Messrs Wilder, firiffi-hs and Co., from whom a lii'tciF prices was obtained Hud forwarded to Onyons fur approval. As the terms were deei-.cd s .l.isfaotory, n large quantity of the debentures were placed m the market, at.d their s-ilo was duly recorded in the daily newspaper:! of last week. It wa-.tnthis latt'T fact that the discovery nf iho frauds was due. Among the

seen; ities sold was a line of 38 Colonial Suujir Refinery (Indentures all belonging to ciisto:rif!-s of *he Niitioiuil Bank; and. by one of those curious coincidences in which real life outvies imagination iinother parcel of City of Melbourne debentures wero iicttiiiUy bought by the person who had deposited them in the National 15auk. When thu purchaser ciime to enter the debentures in his books he found that they tallied in number with thoso previously in his possession, and a very (short examination was sufficient to convince him that something: was wrong, and that in some way or other the bonds had been fraudulently removed from the custody of the National Bunk. When this fact is risrhtly appreciated the nature of the information conveyed to Mr Smith on Saturday last may be easily surmised. It was not until Saturday morning that steps were, taken to have Onyons arrested; anil on Monday, as Mr Call and Mr Pan-

ton wore both absent from the City Court, a magistrate could not be found to siun thu warrant until Into in the day. In the meantime Onyons was kept under close surveillance by Detectives Smith and M'Kvilly. On Monday afternoon, Detective sergeant Nixon, who had charge of the cusp, went down to Brighton, but found no one in the house ex'iopt Onyms' young" wife and his mother, both (if whom were quite unaware of the trouble hanging over the household. Without informing then-, of the nffiiir, the detective hurried down to the beach, whero he found Onyons walking: distractedly up and down. He made no resistance to arrest, and was taken at once to the watchhouse without calling at his own residence, where his wife and mother were waiting his return. At the police station a six-chambered revolver, fully loaded, and a bottle of brandy were found on him, and it i-< suspected from his condition at the time of his arrest that he had been attempting , to nerve himself to commit suicide. He appeared before the City Court on Tuesday and was formally remanded. An application for bail was refused on the ground that the prisoner was likely to attempt suicide.

Since the discovery of the thefts on Saturday last the bank authorities have been engaged in a minute examination of Onyons' books and of the securities remaining in their possession. The result of f.ho investigation, which was not completed until late ou Tuesday afternoon, has been to show that the defalcations are in every respect more serious than the officials were willing to nllow on Monday. According to their first statement, the first loss did not exceed £10,000, bnt they now admit that the value of the missing bonds amounts to £10,700, £11,000 representing, the property of customers, and £2,700 the loss to the bank. The manager of the National Bank denies that any other securities have been abstracted, aud claims that the sum of £1G,700 covers the whole of the thefts.

There is, however, good reason to believe that the robbery of bonds by no means represents the entire defalcations, aud that the actual loss will not bo far short of £40,000 The balance is believed to have been obtained by a clever series of forgeries in connection with the transfer of company shares and other securities. It is allejred that evidence of forgery, directly implicating Onyons, has been collected, but the bank authorities firmly decline to make any statement on the subject, on the not unreasonable plea that to do so would jeopardise the credit of other financial institutions. The same reticence is observed with regard to Onyons' confession. It is surmised, however, that his avowal includes a full account of the method by which he was enabled to gain access to the safe, and that this fact constitutes one very strong: reason why the document is withheld from publication.

The point most likely to interest the general public is the question of the bank's liability to make good the debentures placed by customers in its charge. Ou this subject the bank authorities are as explicit as they are reticent in

other respects. They absolutely disclaim all responsibility ; and it is thus beyond doubt that the question will shortly be tested in the liw court?. In the moantime, it is understood that no additional charge will be preferred against Onyons, and that he will stand his trial for the larceny of the 27 debentures owned by the bank, without regard to any other transactions whatever.—Leader.

No Xainc. A'aluo. Total. 4 City of Fitzroy i»0 -100 8 ' I),,. 100 S00 8 Kme.rakl Hill 100 800 10 ii'ootsoi-iiy 100 1,000 ;;0 C<ilimial SiiErar ilefincty 100 3,000 2 City of Melbourne ... 100 200 Gush 1,000 7,200 The withdrawals had been :— \'c, X.ime. Villus. Total. H £ r,r, City of Prahran ... 100 5,500 00 Borough of Kew ... 100 6,000 11,000