The bank lent me $2m so I spent it on strippers and cars
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He did nothing to defraud the bank or mislead it. He simply had access to a large line of credit, and used it. If the bank wants it's money back, that's a civil matter, not a criminal one. It's their responsibility to ask for it back.
This reeks of incompetence on the part of the bank, followed by outright malice. They put an innocent guy in jail in order to pretend that it was his fault that they screwed up.
I was acquitted a few weeks ago. As far as the law is concerned in Australia at the moment I had no legal obligation to inform the Bank of what was going on. I wouldn't do it again - it wasn't worth a couple of good months with the strippers and some cocaine.
The judge said I was dishonest, but we don't live in a society where moral wrongs result in people being locked up behind bars and their liberty taken away from them.
Imagine what the world would be like if this was true.
The difficulty lies in determining what counts as a moral wrong. Some societies have left this in the hands of the judge (or feudal lord). Most modern societies require legislatures to write down the wrongs and have judges enforce them as written.
In this fellow's case, society decided that it was NOT a moral wrong. Many people (including the judge) may feel that what this person did (spending money that wasn't his but was available to him because of bank errors) was immoral. But others may feel that it is not ("Hey, he never lied to the bank - that makes it their problem."). As a society, we have decided that we won't let the judges declare something "wrong" unless the legislature had previously criminalized it, and in this case no existing laws applied.
The justice system enforces the will of those who empower it. This has likely never been truly democratic. Not long ago it excluded blacks and women. Bias continues today evidenced by incarceration vs crime rates.
This is very distinct from implementing democratic justice.
Like any organization the justice system is fighting to stay alive - subject to selective pressures and evolution.
He was drawing on this line of credit, which he knew he was legally obligated to pay back, without ever intending to pay it back. That sure seems like fraud to me.
There is a difference between taking out a loan with the intention of paying it back, but not being able to pay it back due to some circumstance (you lost your job, had a medical emergency, business failed, or something like that), and taking out a loan without ever intending to pay it back. One is a civil breach of contract; the other (at least in the US) is criminal fraud.
How can you know that? He himself writes that he was waiting for the bank to ask for some money back and intended to deal with it when it comes.
Lack of detailed planning for something isn't the same as lack of intention to do something when it happens.
Lots of people take loans without precisely knowing where they'll find money to pay them back.
Hell, i'd say in almost all cases that is true. How am i going to know if i'll be at my current job long enough to pay back that car loan? Hypothetically i will have a job, and will pay it back, but in reality i have no idea how i'll pay it back.
At best, i can accurately predict X months of payments. After that, it's all just educated guesses.
The question to me is, do you think he took and spent the money with the expectation that he would be able to pay it back? Seems pretty obvious the answer is no.
Not saying he should be locked up, but let's be reasonable here.
It's definitely fraud by any reasonable definition. Fortunately for him, the definition was unreasonably good to him. However, I'd understand the court giving him a lower sentence on grounds of him appearing (to me at least) to have a mental breakdown of sorts after his accident plus the bank showing incredible negligence in their lending practices. The bank just handing him that much money was so stupid they should probably be fined for it on top of his punishment. If it was straight-up their money, then making sure they loose it for good might be good punishment.
It's one thing to go a couple of thousand overdrawn, quite another to spend $2 million when you have no source of income.
i don't think that would stand in any court. the former doesn't imply the latter by necessity.
If I have a say $50k/year job and borrow say $200k I could reasonably have expected to pay it back, if I then lose my job I could say I had intended to do so but circumstances changed.
if I have $0/year as a job and borrow $2 million, you're not seriously suggesting that any reasonable person would buy "oh I totally was going to pay it back" are you?
My point is that if I didn't actually do anything to deceive you into giving me money (like, I didn't claim that I have a millionaire father who's going to give you the money in case I lose at blackjack) - then it's not really deception on my part; it's just error and/or poor judgement on your part for handing me the money.
Many companies also spend money they lent on frivolous stuff (end of year parties, football tables, etc) that doesn't obviously contribute to the bottom line, so buying some booze and spending some money on strippers, in itself, isn't fraud.
Back to this case: I can see how this would be "obtaining financial advantage by deception and knowingly dealing with the proceeds of crime", just as taking money from someone's open purse would be.
The question isn't whether the loan was paid back, it's whether there was an intent to pay it back at the time the loan was taken out. Many of those homeowners foolishly believed their house would appreciate at 20% per year indefinitely (and many lenders were telling people this to convince them to take out loans).
If this guy had actually said to the bank "hey I want to borrow $2 million, I have no income and no collatoral" do you think they would have accepted the loan?
He took advantage of a mistake made by an automated system from the bank, there was no human going "gee the guy with no income wants another $1000 to add to his massive overdraft, sure why not".
I can see how a guy could just overdraw his account and wait for the bank to tell him to pay some of it back. Maybe he thougt that when the bank will request some money back he can always sell cars or celebriy memorabilia and make the ends meet.
He didn't cocieve a plan to buy a helicopter or luxury yaht. He was just living little bit above his means for a while.
Fraud is a bit strong name when you are just doing someting noone forbid you to do.
"I went to strip clubs and spent hundreds of thousands of dollars on girls, alcohol, cocaine and whatever else."
that's not the actions of someone who just overdrew his account a bit, or is a bit bad with money.
The reasoning is indeed "The contract stated Mr. Moore could overdraw as the bank allowed; Mr. Moore requested to overdraw and the bank allowed it; therefore Mr. Moore was authorized to borrow funds and there was no deception on the part of Mr. Moore".
Apparently the account was set to have a "relationship officer" status, which comes with a default-allow policy, but then had no relationship officer assigned to deny transactions.
Maybe the contract did not include such a clause? There's a reason why he got acquitted in the end.
Now, that's not the same as having a line of credit mistakenly opened, but there's some logic to it being a crime.
If you ask the bank for $2 million, they say "Sure!", and you spend it, that's not fraud.
They incorrectly billed us over $2000. We argued with them and they reversed the charges - twice.
So now my balance showed a credit of $2000. I kept calling them back and they said they couldn't see anything wrong on my account.
This went on for months. A number of times the person on the phone said "Well just don't tell anyone!". I asked for that in writing and then they sighed and said "I'll put a note in for someone to look at it."
I was blown away by how many friends of mine got mad at me for trying to fix it. Does anyone really think this would go unnoticed forever?
While not of the same scale, a decade or so ago I once purchased a few hundred dollars worth of computer hardware at a store outside of my state of residence (I was visiting my parents or something). I paid for it with my debit card, and got a receipt.
I'm still waiting for that charge to go through.
I noticed that there was a 25% chance of never having to pay a taxi bill as the drivers seemed to be notoriously bad at doing their paper work...
I think I would have closed the account, and either waited for them to realize what was going on before Accounting cut a $2k check.
A credit on an account is bits in a computer; a check going out to a customer is real money coming out of a bank account.
What everyone was telling me to do was to make lots of expensive long distance calls because I had the credit. I didn't want to have to pay that back once they fixed it.
PS: This is where cash flow is so important. If you have debt of 10 billion and assets 'worth' 9 billion but can make debt payments then it's not yet game over.
I too could become ultra-wealthy if someone were to give me a ton of money to buy assets at well below market value.
My bank keeps trying to sell me this, I don't see why this would be a good idea. Does anyone here use this?
Also, one time our old bank erroneously withdrew a 6 figure sum from our operating account which put the balance far in the negative. I was stunned that they covered it and bemused to see a 35$ overdraft fee as the next line item on the statement. The charges were reversed within 48 hours.
I scratch my head sometimes at how its at all possible for large banks to make these kinds of mistakes.
I guess what they’re “protecting” you against is the embarrassment of having a rejected transaction. And then they charge the overdraft fee, and a fee for using credit, and more fees until you notice and fix it. And if you’re overdrawing on a debit card, then you’re probably poor and those fees are a substantial burden.
It’s one of the reasons I decided to close my Chase account.
It's even worse than that. Banks have been caught reordering transactions to maximize overdraft fees.[1]
For example, say you have a $100 in you account and you use your debit card to pay the following amounts (in time order): $4, $15, $60, $41.
the first 3 will go through, then the last one $41 will put you over the limit and you'll pay one overdraft fee.
But if you reorder the transactions and submit them like this: $60, $41, $15, $4, then you go over the limit by the second transaction and pay 3 overdraft fees instead.
Nice huh?
[1] http://www.nytimes.com/2016/02/29/business/dealbook/overdraf...
So definitely still happening. (article from 2016)
I don't think there's much justification for most people to have overdraft lines; it seems to primarily be a tool for people who have plenty of money but trouble knowing when it will be present.
If the bank doesn't cover it, then you could accidentally write a hot check, which can actually be a felony.
So I am happy to pay the bank $35 for my mistake on occasion if not just to avoid the possibility of someone turning my bad check in to the prosecutor.
Now if he got a letter in the mail saying they had extended him a huge loan, that would be different.
Sounds to me like this guy never really took responsibility for his actions.
The original mission of the Secret Service was investigating financial crimes; protecting people was only added later. They even used to be a branch of the Department of Treasury.
Used to be; but now they are part of Homeland Security.
morals for lawyers? unbelievable...
You'd be a fool to turn down unlimited zero-interest credit.
Maybe, but this guy served half a year in jail. You could probably do better if you could show the court that you're not a hapless kid buying sports cars, but it seems rather risky.
(from an article describing his original conviction)
>Justice Leeming found Mr Moore acted "extremely foolishly" and dishonestly. He had known of the error and continued to borrow knowing he could not pay the money back.
>"I must confess to some puzzlement at the apparent dismay of the prisoner and people who support him that he was found guilty," Judge Norrish had said, describing the Crown case as "irresistible".
Seems like the judge knew exactly the facts and managed to come up with the wrong decision. It does sound like the lawyers weren't very good, but you also need a pretty bad judge to go in there and come out with the wrong decision despite knowing all the facts.
Maybe the defense could have brought in more case law, but most judges don't read it except on appeal.
Just to add, fraud is an intentional crime, this means the prosecutor must prove intent at every step, including that he had intent to obtain money from the bank through fraud. How the judge missed what a first year law student would have known just speaks to me about the incompetence of the judiciary. It's not like this man's lawyers failed to point that out to the trial judge.
He mentioned several times that the legal aid lawyers were worse than useless.
Luckily this guy was smart enough to actually represent himself - credit to him for that!
This was my shock in all this. I've created a personal profile for this guy on story's beginning and ended up with a whole new profile at the end. What a character development!
I never thought of AI being used in this capacity. Seems like we'd live in The Day The Earth Stood Still world, giving the automatons the jurisdiction to meat out justice.
https://www.theguardian.com/technology/2016/jun/28/chatbot-a...
It won't. Companies will just sell their specially-crafted AIs to law firms and governments for a lot of money. These AIs are currently used for identifying judges likely to be sympathetic toward your cause.
Currently, the legal industry has managed to entrench itself using technicality which makes it difficult to replicate and leads to very expensive fees. When a software solution comes along - in principle it will be able to scale and therefore charge substantially lower fees while still earning competitive margin as compared to a traditional law firm. This will lead to a democratisation of access to justice.
Think Amazon for retail, Netflix for TV or Spotify for music. (Maybe ignore the part about profits for now...)
He bought several expensive cars, spent time in Thailand, and started buying celebrity memorabilia and art?
I wonder if people like this get caught because of their blatant disregard for consequences. And that there's lots of people who fall into similar mistakes/loop holes but are just very reserved and try to fly low.
Why not? He had a nice experience, and even avoided any long term jail sentence. What's not to like?
I keep wanting to compare it to tech firms that profit off chiseling away at our privacy using social and game theory, but I'm not completely convinced that the two systems are similar enough to warrant it.
Assuming banks are moral, and cheating them is immoral, which is a big assumption.
Many years ago, I deposited a check from my business account to my personal account, where both accounts were held with the same bank, and somehow, they messed up where the check was for something like $1500, but they only deposited $500 into my personal account and deducted $500 from my business account. Called them up, and they deposited the missing $1000 into my personal account but didn't take the funds from my business account, effectively giving me $1000 for free.
Tried calling them several times and explaining what had happened, though the customer service folks were useless. Seemed like no-one really cared about resolving the issue.
Eventually, after something like 9-10 months, someone realized and one morning, my business account was suddenly debited for $1000.
What a great value for society we got from this one.
This may be true in the short term but it seems more likely the bank's customers will pay in the long term. ;-)
The guy was immoral. But in the world of banking that doesn't matter.
I suspect it's really not all that unique.
It did give him enough experience to find something worth doing with his life.
People like this who have no sense of personal responsibility are an evil in the world. He spends millions of dollars of other people's money, declares bankruptcy (presumably), and when his actions are deemed dishonest and immoral, though not technically illegal, he acts like that's just name-calling and gets right back up on his high horse. Remind you of any Presidents-elect?
I expected better of HN commenters. Remember when we had a spirited discussion about people defaulting on their student loans and blaming society for making them take huge loans they can't pay back? This situation lacks any of the nuance of that one.
Between these two only the bank, as institution or licensed financial entity, has an obligation to guard the flow of public money. The bank should not hand anyone the responsibility of overdraft limit management. The individual can be assumed incompetent and just be absolved of any responsibility solely based on that.
If they had pushed him to take a reckless loan, I'd agree with you that they shared liability here, but this was (from what I've read) just him taking advantage of a mistake by the bank.
Banks don't lend other people's money. They create money when they lend. Read this from the Bank of England. http://www.bankofengland.co.uk/publications/Documents/quarte...
This is simply not true. The bank created credit money out of thin air. They didn't have to take money from anywhere to give it to him. On their books, his loan looked like an asset.
This is a common misunderstanding of how banks work. He didn't steal anyone else's money, he got new money. Read this introduction of how money and banking work from the Bank of England http://www.bankofengland.co.uk/publications/Documents/quarte...
Isn't repaying your debts (or attempting to) morality 101 stuff? You made an agreement and received a benefit from your counterparty.
Just because someone thought you might default doesn't relieve you of your obligations. I lock my doors because I think someone might break in, that doesn't mean I've "priced in" my TV being stolen so it's OK to take it.
When there is a contract it becomes civil legal matter and morality does not come into play.
so only one party was aware of it, the customer, therefore their responsibility for the borrowing.
Is that really necessary? I'm getting a little sick of Trump replacing Hitler in Godwin's law. We had a detox week for a reason. (https://news.ycombinator.com/item?id=13108404)
The bank was clearly in the wrong as well. They shouldn't have extended this credit, and once they did they shouldn't have tried to prosecute him when he didn't break the law. But acting like the negative consequences of it were bad luck makes this fellow a profound dickhead. I hope he learns better before he completes his law degree and starts representing people.
There's another way to look at it: The "bad judgment" is only bad if you view the standard as "tell[ing] the bank they messed up". If the standard is to blow all the money on strippers and cocaine, then the bad luck in this situation was that he was presented with the anomaly in the first place.
You're equating the standards as either "telling the back they messed up" or "blow the money on strippers and cocaine", but then suggesting the bad luck is only true when one of those standards happen...
This logic doesn't even check out. And even if it did, both would assume your actions are only predicated on factors outside of your control, which I think OP is referring to isn't the case.
You are presented with a beneficial situation. You can make decisions that have various potential consequences. These are easily guessed in rudimentary detail.
"Bad luck" only enters the equation if you have no choice of what to do.
If your position is of the philosophy that there is no free will, then your argument would be better held by just stating that, instead of making up scenarios that aren't compatible.
That is closer to the core human nature for a lot of people. Many people want to live and enjoy life (more than enjoying the good perks of being honest). Playing by the rules is just a mean to an end not a purpose in itself.
What really gets me is not just taking the money, but then talking about the whole affair as if it was something done to him, rather than something he did.
I kind of agree with you, but that's unnecessary and unfair. There's no evidence the kid's racist, sexually assaulted women, or worked with the Russians to undermine American democracy.
Gas Station owner given $10 million overdraft instead of $100,000 , transfers it all offshore and runs:
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objecti...
Student given "unlimited" overdraft, spends $4 million on handbags and clothes:
http://www.stuff.co.nz/business/world/80263909/Westpac-admit...
I think the problem here is that the bank employees saw no reason to intervene, even though they should have, as clearly the guy needed help (responsible lending practices here in Oz ignored). I expect that is why his conviction was quashed.
My guess would be a mistake in a system and a line of credit got attached to the wrong account. Should they have better checks in place, sure, but there's nothing in the article to suggest they knowingly lent him the cash.
Although I'll agree with you that the solution will require changes most likely to both.
The regulation and audit requirements of the banking system mean that you can't cover your tracks forever. The accountants and auditors will catch up eventually.
That way he would have spent just as much money, but sitting in front of a computer instead of being coked up with strippers.
Not that I'd do it mind, but I think that'd be a way to get away with it. Reasonable ROI even if you do go to jail for a year or two ;)
Read "treasure islands" sometime. Fascinating.
Then I figure out a way to make it so that I'm no longer doing anything illegal, and wait for the statute of limitations to kick in. Probably I'd have my lawyer in Australia declare bankruptcy or something.
Edit: admitting to amoral behavior, drug use, etc. Those are grounds for the bar to not let you practice.
A lot of the people in there need help not incarceration.
Is there any place in the world where the justice system is totally impartial, helpful, not overreaching etc?
Is it that he would transfer money from his account, and it always succeeded even if there was no funds???
It’s a form of credit granted to you by the bank. It’s usually limited. You wouldn’t usually get a $2m credit either. :)
Admittedly, there is also some different psychology at play: this guy knew it was a temporary windfall, and wouldn't last.
Even if he was dumb enough to blow his basic income, and end up on the streets for the rest of the year, he probably wouldn't make the same mistake twice ;)
> July 2010 to August 2012: Makes more than 50 withdrawals, apparently totalling $1,988,535.25