The evil Wackford Squeers, who has for years run a horribly abusive boarding school in which the boys are starved and beaten, comes to a fitting end. Squeers at one point is beaten up by Nicholas Nickleby, but a worse fate lies ahead of him.
Despite being a terror to those under his power, Squeers is not particularly bright, and he is lured into stealing Madeline Bray's grandfather's will, which would make the impoverished and selfless Madeline a very wealthy woman. Gride, a very old man, has gotten hold of the will. He keeps it secret because he wants to first marry Madeline and then reveal its contents, knowing she will never marry him if she knows she is independently wealthy. The only leverage Gride has over her is the promise to take care of her father if she marries him. After this plan is foiled by her father's death, the will falls into the hands of Gride's housekeeper, Peg Sliderskew. At this point, Squeers is commissioned to steal the will from her.
Squeers is caught and convicted of the crime. As Nicholas explains to John,
he has been sentenced to be transported for seven years, for being in the unlawful possession of a stolen will.
Though this is not specified in the text, to be transported meant being sent to serve out one's penal servitude in Australia.