Risk Management

Accountant’s Theft Excuse? “Deep Middle Age” Depression

Melbourne, Australia, accounting-firm chairman gives mental reasons for taking a client's $810,000 and using it for his home, cars, and private sch...
Stephen TaubSeptember 4, 2008

A Melbourne, Australia, accountant, guilty of stealing nearly $810,000 from a client of 10 years, told the judge through his lawyer that the thefts were the actions of a man in “deep middle age” and suffering from depression.

Lance Robert Scholes, chairman and managing partner of accounting firm Hall Chadwick, pleaded guilty to six counts of theft, according to the Melbourne-based Website, theage.com. The article did not say how many years he could potentially spend in prison.

Scholes’s lawyer described for Judge Christine Thornton a seemingly successful professional who had come from working-class roots to the managing partner role at the accounting firm, living in a house in the suburbs, with three children at private school, and serving as coach of the Melbourne University hockey team.

In reality, his company was barely keeping its head above water, the lawyer said, and while his peers in other accounting firms earned more than $200,000 a year, Scholes had taxable income of little more than $30,000 in the year that he committed his first illegal act. “By the time the first offence was committed, the pressure of trying to feed and educate the kids…and keep up appearances was overwhelming,” the lawyer said in court.

The lawyer described a scam in which Scholes in June 2000 secretly deposited in his own account an Australian Tax Office refund check of just under $20,000, payable to long-time client Nadma Pty Ltd. The thefts continued for four more years, with illegal deposits totaling around $810,000. Some deposits were made after channelling through the bank account of another Hall Chadwick employee, without her knowledge of illegal activity, the attorney for Scholes said.

Proceeds of the thefts were used for mortgage repayments for his home, private school fees, home renovations, and two family cars, according to the attorney.

Oh, yes. Scholes’s age? 56.