A senior law clerk from collapsed law firm Magarey Farlam has pleaded guilty to 67 counts of theft, dishonest dealings and falsification of accounts relating to the theft of $4.5 million from the firm’s trust fund between 1998 and 2005.
William Brenton Willoughby, 64, of Parkside, pleaded guilty in the District Court on Monday, a week before the scheduled start of his trial.
It signals the end of a long-running legal saga that has pitted the 250 clients of Magarey Farlam against the Law Society and State Government in a series of civil actions as they sought to recover their money through a Law Society Guarantee Fund.
As the civil actions rolled on through decisions, appeals and finally mediated settlement, Mr Willoughby’s criminal proceedings were delayed after he first pleaded not guilty.
A police spokesman told The Independent Weekly the guilty plea related to 67 counts of falsification of accounts, theft and dishonest dealings with accounts, accounting for $2 million of the missing funds.
A further 38 counts relating to another $1.1 million will be “taken into consideration” during sentencing submissions set down for October 14.
“Victims are being contacted and offered the opportunity to submit victim impact statements to the court,” police said.
The saga began in June 2005 when the Sunday Mail reported that a Mr Brenton Willoughby had run up parking fines of more than $100 000 in the Adelaide City Council area. According to the report, some $38 855 remained payable.
Questions were raised in parliament as to how Mr Willoughby had been able to have such a high amount of uncollected fines. Labor’s Upper House leader, Paul Holloway, responded: “In accordance with standing order 111, I refuse to answer the question or take it on notice.”
But others were concerned at the reports.
Willoughby was working as a book keeper at one of Adelaide’s oldest firms, Magarey Farlam.
The report concerned some of the firm’s partners and in July 2005 an issue was raised regarding a cheque drawn on the firm’s trust fund.
Mr Willoughby was absent from work that day.
Investigations by the Law Society uncovered missing funds of $674,000 but further independent forensic accounting saw the amount of missing funds rise to $4.5 million.
The Law Society stepped in to take over management of the firm, and in early 2006 Magarey Farlam closed its doors.
There was no suggestion that Magarey Farlam partners were knowingly implicated in the wrongdoing. In fact, the Supreme Court stated in one of its judgements: “The partners were unwitting instruments of Willoughby’s fraudulent dealings.”
But for the clients of the firm, the worst was yet to come.
How much of their funds would be repaid from the Guarantee Fund and who would be paid became contestable issues. Court actions followed and costs mounted.
At the time the victims were openly able to discuss the stress, financial strain and ruin that they encountered.
But last year, after a mediated settlement, the claims were resolved and victims were required to sign confidentiality clauses.
John Crane was one of them.
He told his story to The Independent Weekly in 2008.
“What happened was that Mary’s father died,” John Crane said.
“Her mother had already passed away and she’d had trust accounts with Magarey Farlam. So when her father died, Mary and I and Mary’s brother tried to wind it all up. Then we discovered that some of the money was missing.
“All up, the value of what we were supposed to have in the accounts was about $500,000 worth of shares and about $250,000 in cash and other assets. It just wasn’t there.”
The Cranes and others went into battle but found themselves entangled in a complex series of civil actions and proposed changes to legislation.
The proposed changes to the law ended up in deadlock in State Parliament before then attorney-general Michael Atkinson withdrew the Bill.
If the same events were to happen again today, victims of any fraud would be in the same situation as the 250 victims from 2005.
How new Attorney-General John Rau responds to the concerns is yet to be seen.
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