Page 97 - SARB: 100-Year Journey

The fraud
At the time, companies paid wages in hard cash, and with an established mining sector largely centred in Johannesburg, there was always a big demand for cash at the end of the month. The cash went to commercial banks. This meant that the Note Department was always busy.
At the beginning of the next month, the notes returned to the Bank as deposits from those who had otherwise been paid for various reasons. That meant the branch had to sort out the notes into two categories – notes that were in good enough condition to be re-issued and those that needed to be destroyed and replaced. The Note Department racked up huge amounts of cash while this painstaking sorting process was taking place.
Secondly, as all banks do, the notes were compartmentalised in bundles that totalled a certain amount, for example 20 notes of a certain denomination in a bundle. As there were no note counting machines at the time, this was done manually. This made quality control almost impossible as it was difficult to verify that each bundle contained the exact amount purported to be in it.
Aldred’s job was to count and bundle the money, which was supposed to be certified by Burns. The latter was not particularly diligent in this task, and had, in fact, previously stated in writing that he “check[ed] the amounts in bulk”. This meant Burns did not perform a recount, and therein lay the opportunity for Aldred. Aldred simply presented bundles of cash that were a few notes short, and given the amounts of money involved, he managed to steal a significant amount over time.
The discovery
It was only once the lax Burns went on leave that the fraud was discovered, for his temporary replacement performed the task to specification. When the anomalies were discovered, audits were commissioned, leading to further discoveries of various methods of stealing from the Bank. Even after the audits had begun, Aldred continued with his theft by simply varying the manner in which he undertook it. These, too, were later discovered.
The consequences
Burns was suspended as soon as the fraud was discovered. He was also demoted. Upon his dismissal, he received a settlement of £25 per month “on compassionate grounds”. This would be paid to his wife.
Sturdy was described as “more stupid than negligent” by the Governor in his report to the Board. His monthly pay was cut by £75 and he was demoted. It would appear that Sturdy had not realised the quality control procedures put in place were meant to prevent fraud. He was not dismissed.
Aldred was jailed after confessing to his crime, during which he admitted that he was so cunning he did not expect to be caught. (Rand Daily Mail, 18 January 1929).
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