Great frauds in history: the Fauntleroy embezzlement
Henry Fauntleroy's embezzlement Berners Street Bank cost his clients their fortunes and Fauntleroy his life.

Henry Fauntleroy was born in London in 1784, the son of banker William Fauntleroy, the managing partner of Marsh, Stracey, Fauntleroy and Graham, also known as the “Berners Street Bank”, after the London street on which it was located. Henry joined the bank at the age of 16. He was so successful that, when his father, who was one of the founders, died in 1807, the other partners decided to let Henry take over the management of the institution, on a generous salary, even though Henry was only 23 at the time.
What was the scam?
During the first seven years of Henry Fauntleroy’s management, the bank’s position steadily worsened. Fauntleroy was able to hide this from his partners by manipulating the bank’s figures, but the institution was on the verge of going under by 1814.
In desperation, Fauntleroy noticed that many of Berners Street’s clients owned large amounts of government bonds held outside the bank, but with the interest paid into their accounts. By forging their signatures he obtained control of the bonds and sold them, using the money to cover the bank’s debts and fund his lifestyle, while making regular payments into their accounts.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
What happened next?
The impact of paying £16,000 a year in interest, as well as his increasingly extravagant lifestyle, meant that, when one of his victims died in
1824, Fauntleroy did not have enough money to replace the missing bonds. When he suggested that the executors continue to let the interest payments be paid into an account at Berners Street Bank, they became suspicious and began to investigate, quickly discovering the embezzlement. As a result, Fauntleroy was arrested, convicted and then executed for forgery (which was at that time a capital crime).
Lessons for investors
Fauntleroy was convicted for the theft of £20,000 (£1.7m in today’s money), he confessed to stealing £170,000 (£15m), and historians now think he may have sold a total of £400,000 (£35m). Either way, his theft led to the bankruptcy of the Berners Street Bank and huge losses
for the victims of the embezzlement. Given the possibility of identity theft, or just the occasional honest clerical error, it’s always a good idea to check your accounts occasionally to make sure that everything is in order and that there are no unexplained disappearances or shortfalls.
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Follow Matthew on Twitter: @DrMatthewPartri
-
Rightmove: UK asking prices hit record high but Britain enters buyer’s market
Higher property taxes are stifling the typically-busy spring selling season and buyers are benefiting from more choice, meaning sellers must price their homes more competitively
-
Inheritance tax reforms: government urged to rethink curbs on rural reliefs
MPs want the government to delay changes to inheritance rax reliefs for farmers
-
Greg Abel: Warren Buffett’s heir takes the throne
Greg Abel is considered a safe pair of hands as he takes centre stage at Berkshire Hathaway. But he arrives after one of the hardest acts to follow in investment history, Warren Buffett. Can he thrive?
-
Who will be the next Warren Buffett?
Opinion There won’t be another Warren Buffett. Times have changed, and the opportunities are no longer there, says Matthew Lynn.
-
Lorne Michaels: the ringmaster at Saturday Night Live
Lorne Michaels created Saturday Night Live, a cultural phenomenon that launched the careers of countless stars in America.
-
'Rachel Reeves' plan to force pension funds into UK assets won't work'
Opinion Hustling pension fund cash into British assets sounds like a good idea. It would be better to make Britain an attractive place to invest, says Matthew Lynn
-
Elliot Grainge: the music mogul of the TikTok age who will now helm Atlantic Records
Elliot Grainge, the entrepreneur behind the upstart music producer 10K Projects, has taken over the top job at Atlantic Records, the label synonymous with musical greats. Can he transform its prospects?
-
Supersonic travel: How China could 'leapfrog' US and Europe's commercial aviation industry
Opinion Innovation in commercial aviation has been stuck for 60 years. A commercial supersonic jet might be back on the market soon, but will China get there first?
-
How British businesses can tackle Trump's tariffs
The majority of British businesses are likely to take a hit from the chaos caused by Trump’s tariffs to reorder global trade. Companies in the firing line face some difficult decisions, says David Prosser
-
Ben Cohen: The Ben & Jerry’s co-founder who wants to break away from Unilever
Ben Cohen of Ben & Jerry’s ice cream is seeking to break away from Unilever, the conglomerate he sold out to in 2000. It’s a battle for the soul of the brand synonymous with corporate do-gooding.