The bank made the mistake of honoring the checks (it may be cheque in Australia, but I'm not in Australia). If this guy really croaks it in two years, well there really isn't much that the bank can do, now is there ?
The legal process will take more than that, with a little help from the defense lawyer, so once he's pushing daisies they can indeed all choke on the debt.
He may be a thief, but only because the bank let him become one in the first place. I say he's right. He should blow it all on having a good time before he departs. After all, it's not his fault that nobody checked the accounting properly. It's the banks responsibility to ensure that the funds are available, and refuse any checks that are not properly funded. They didn't do their job, no use to come whining now.
Of course, if perchance this guy doesn't pass away in the next 24 months, but lives on to the ripe old age of a hundred and ten, well this problem sure won't go away by itself.
I think this is the perfect definition of being between a rock and a hard place.