Jim's last verse should run:

I quickly was nailed and committed and cast in the jug for a lag,
For a wipe that she pinched and bunged to me, and valued no more than a flag,
The judge said to me you are sentenced a free passage to Van Dieman's Land.
For life far away from relations, so adieu to the black velvet band.

I am particularly struck by the change in language half way through the ballad. Look at the quite formal language in the 4th verse and then in verses 6, 7 and 8 the rather stilted use of cant.

Re the black velvet band itself, personally I don't think it's got any symbolic or social significance. It's just a tag that's easy to rhyme with and become a type of chorus. I'm sure scrunchies were just as common in Victoria's day as they are now, perhaps not so elastic, but served the same purpose. At least we can say the ballad is most likely post 1829 unless the writer is referring to Princess Victoria.