Boy: These sausages are mouldy.
Fagin: Shut up and drink your gin.
Fagin: Careful Bill, please, no violence.
Bill: Hand it over, you avaricious old skeleton.
Mr. Brownlow: In the eyes of the law, you are the more guilty of the two, for the law supposes that your wife acts under your direction.
Mr. Bumble: If that's what the law supposes, sir, then the law is a ass! If that be the eyes of the law, sir, then the law is a bachelor.
Bill Sikes: You're a fine one for the boy to make a friend of.
Nancy: Yes, I am, Lord help me! But tonight he's a liar, and a thief, and all that's bad! Ain't that enough for you without beating him to death?
Bill: You can keep the books. Start a library.
Answer: If you mean the scene where he is teaching Oliver how to be a pickpocket, then yes, Fagin knew. He is role-playing the part of a "victim," showing Oliver what it is like to steal an item from someone's pocket without it being noticed. He is employing some criminal "positive reinforcement."
raywest