Bank manager blows customer millions on online betting
Five-year losing streak
An Australian bank manager who stole AUD19 million ($13 million) to fund his online gambling addiction faces sentencing on Friday after pleading guilty to crimes spanning five years.
Incredibly the misappropriation of funds from the Commonwealth Bank by Kim David Faithfull, 36, of Karratha in Western Australia, only came to light after he came forward to admit his wrongdoing.
The confession brought an end to a five-year losing streak funded by money stolen from term deposit accounts and foreign currency notes held by the bank. Faithfull used the bank's computers to transfer this purloined money into an online betting account with Darwin-based International All SportsBet (IASBet).
Up to $400,000 a week would be transferred to this account, making Faithfull easily IASBet's biggest punter. Despite massive bets - averaging AUD20,000 - often placed on long shots, none of Faithfull's bets were refused.
"Faithfull's bets were so erratic they were a joke - if they weren't so big. That made them scary," a former IASBet employee said. "He bet on up to 20 races on a Saturday. He'd put a lot of money on no-hopers at long odds. Sometimes two in the same race."
The Age quotes staff who said it was "common knowledge" among IASBet staff that Faithfull was a bank manager.
Despite the size and regularity of the thefts, regular audits by the Commonwealth Bank failed to unearth anything suspicious. By early this year, Faithfull had lost AUD8 million. Over the next six months he tried to dig himself out through a series of increasingly desperate bets that saw him squander another AUD11 million.
Faithfull lived modestly with his partner and five-year-old son in a bank-owned house in Karratha, where he was a popular member of the local community.
His massive losing streak might have carried on indefinitely, had Faithfull not called a halt to his own slide into the abyss. He placed his final bet on Saturday, 2 August. The next day, he left a note at his bank confessing to his crimes.
He was summoned to Perth and questioned by bank investigators. They turned the case over to the police. After these investigations, Faithfull was charged with theft as a servant, in what is (unsurprisingly) the biggest case of its kind in Australia. He pleaded guilty at a hearing before Perth Magistrates in August and faces sentencing from crimes that carry a sentence of up to ten years in prison on Friday (24 October).
Meanwhile, police are helping investigators to trace the money Faithfull stole in advance of any legal action for its recovery.
Follow the money
The Sydney Morning Herald reports that Faithfull isn't the only punter suspected of betting large quantities of stolen money with online bookmakers.
Dennis Craig Telford, 39, a company secretary and chief financial officer, has pleaded not guilty to 59 charges of stealing AUD22 million from South Australian firm K&S Corporation to gamble with Darwin-based Sportingbet Australia and other online bookies.
In a civil action by K&S, Supreme Court judge Justice Anthony Besanko ruled found that Telford "unlawfully transferred" AUD11.5 million between August 2001 and April 2002.
Justice Besanko found that Sportingbet had "wilfully and recklessly failed to make inquiries an honest and reasonable man would have made" and ruled that K&S was entitled to $2.78 million held by the bookmaker, which is appealing the decision.
The case raises serious questions about failures in corporate auditing and the regulation of online bookmaking in Australia. Regulators are still to respond to these concerns despite probing from the SMH. Questions about whether bookies query suspicious activity will only increase when Faithfull in sentenced later this week. ®
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