In 1874, English butcher George Fawkes was appointed rate collector and valuer for Benalla Shire Council.
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His council accounts were audited annually from then on.
Unfortunately for Fawkes, a Melbourne solicitor who was formerly secretary of the shire undertook the task in 1877 instead of the shire’s usual auditor.
A problem revealed itself. The new auditor, together with George Sharpe of Moira House, Moore and Willis Little, interviewed the rate collector after the audit.
The three named men were members of the shire council.
Fawkes was insouciant. "Yes,” he admitted. "There is a deficiency in the accounts. I will make it up. I will pay half now and, if you give me time, I will pay back the rest.”
Fawkes showed no remorse and gave no explanations for his theft.
After his interview, Fawkes was immediately dismissed and charged with embezzlement.
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The crime had been simplicity itself to commit.
Only Fawkes opened envelopes addressed to the rate collector and he only gave receipts to those ratepayers whom he thought would demand one.
Had the previous auditor undertaken elementary steps in auditing, Fawkes’ crime would have been detected years before.
Audits going back to 1871 were finally necessary to ascertain how much money was missing. The deficiency was substantial.
It finally amounted to $1510, a skilled craftsman’s wages for more than 10 years.
As well, Fawkes had stolen and then repaid payments of rate arrears from 1871, 1872 and 1873. This suggests that the rate collector was gambling and repaying embezzled funds from winnings.
It also explains his nonchalance when confronted with his crime.
In October 1878, Fawkes faced Mr. Justice Barry in the Supreme Court in Beechworth.
The documents and accounts had taken substantial time to put in order. Two sets of accounts and missing documents and receipts had not helped.
Three audits, each going back further, had been necessary to finalise the amount embezzled.
The case against Fawkes was overwhelming.
Despite the degree of premeditation and his repeated acts of dishonesty over years, Fawkes was sentenced to three years’ imprisonment, a sentence that reflects the outcome for white collar criminals, then and now.
Once detected, Fawkes made no effort to repay the money he had stolen.
In the same session of the Supreme Court, William Baumgarten and Samuel Kennedy were sentenced to four years and six years imprisonment respectively for the theft of a horse worth $14 at Moyhu.
The Shire Council had insurance with the Victoria Guarantee Company to cover fraudulent acts by its employees.
However, the council had not complied with the conditions of the policy.
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The policy required competent auditing of council’s financial affairs.
Also required was proper accounting practices and a single set of account books, not the two sets Fawkes operated.
The policy also prohibited the collection of, and dealing with, money by only one official.
Reluctantly, at the end of 1878, the Victoria Guarantee Company paid $500 towards reimbursement of Fawkes’ embezzlement.
Fawkes died in Melbourne in 1902.
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