
The bank lent me $2m so I spent it on strippers and cars - kevlar1818
http://www.bbc.com/news/magazine-38308842
======
adekok
The article doesn't way why he was found not guilty, but I'll make my guess.

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.

~~~
pktgen
> 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.

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.

~~~
scotty79
> without ever intending to pay it back

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.

~~~
raesene6
That's easy, he had no money to pay it back, ergo it's fair to conclude he had
no intention of paying it back.

It's one thing to go a couple of thousand overdrawn, quite another to spend $2
million when you have no source of income.

~~~
Someone
"Have no money to pay it back" applies to many companies (including many
banks) that borrowed money and to many house owners, too. Would you conclude
they have no intention of paying it back, too?

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.

~~~
pktgen
> "Have no money to pay it back" applies to many companies (including many
> banks) that borrowed money and to many house owners, too. Would you conclude
> they have no intention of paying it back, too?

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).

~~~
scotty79
Maybe he foolishly believed that his life will be worth enough to pay back
what he borrowed on some reasonable payment plan.

------
BeetleB
Reminds me of something that happened back when I still had a landline.

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?

~~~
tlrobinson
Wouldn't the optimal (not morally) move be to just set aside the money you
_might_ eventually have to pay back?

~~~
pavel_lishin
Except he'd have to set aside either two grand right away, or have to very
carefully track his phone line usage and keep a separate account.

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.

------
rsp1984
I'm surprised that the article isn't answering the obvious question and that
nobody here is asking it either: Did he have to pay back the 2 million?

~~~
dalore
If you borrow $2k from the bank and can't pay it back, that's your problem. If
you borrow $2 million from the bank and can't pay it back, that's the bank's
problem.

~~~
jdavis703
It's actually called fraud, at least in the US, and will be investigated by
the Secret Service. If you experience such a windfall in your account, seek
written permission from the bank before spending any of the money.

~~~
TheArcane
Isn't the Secret Service supposed to protect the president?

~~~
pc86
They were a part of the Treasury Department until 2003 (now DHS) and deal with
counterfeiting and other financial crimes. I don't know for sure that fraud
like this would land in the Secret Service queue and not the FBI but it's
certainly plausible. It mostly depends on which specific statute(s) you're
being investigated for as to which agency(ies) do the investigating.

~~~
dragonwriter
> They are a part of the Treasury Department officially

Used to be; but now they are part of Homeland Security.

~~~
pc86
You are correct, thank you. Edited to fix.

------
CPLX
What a shame he was young and irresponsible when this happened. It could have
been a truly epic story had he done something interesting like take out the
money, invest it in something like income producing real property or a
cashflow positive business, and then been able to come out ahead when
judgement day inevitably came along by handing back the money owed.

~~~
pavel_lishin
I would imagine that most people who would allocate their money that way
wouldn't take the risk of continually drawing on a magic line of credit.

~~~
morgante
I absolutely would. I'd probably call them to get some documentation that I'd
tried to rectify the situation, but if they still want to keep giving me a
line of credit I'd be buying up assets like crazy.

You'd be a fool to turn down unlimited zero-interest credit.

~~~
pavel_lishin
> _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.

~~~
morgante
It's not clear how much effort he went into corroborating with the bank. I'd
certainly at least call them to confirm before spending the money.

------
scandox
The big story for me here is: don't rely on your lawyers. Not unless they cost
enough to rely on. Form a strong idea of your own case and your own defense.
Even if you're not representing yourself.

~~~
yomly
Yep this is my takeaway from the story. I will not be sad when AI automates
away the majority of the legal industry. Really really terrifying that one's
access to justice is dependent on their access to finances.

Luckily this guy was smart enough to actually represent himself - credit to
him for that!

~~~
Pigo
This has been my reason for being against the death penalty for many years.
It's hard to justify when the OJ's of the world get a pass due to wealth or
celebrity.

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.

~~~
bluejekyll
Hmm. This is actually an interesting application for AI. Is anyone working on
this? There is a huge amount of case law that could be entered into the
corpus.

~~~
saint_fiasco
DoNotPay is a chatbot that can help people with simple legal cases like
appealing parking tickets.

[https://www.theguardian.com/technology/2016/jun/28/chatbot-a...](https://www.theguardian.com/technology/2016/jun/28/chatbot-
ai-lawyer-donotpay-parking-tickets-london-new-york)

------
dugditches
Listening to it on the radio, the guy just seemed so apathetic. That it seemed
almost like a Satire skit.

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.

~~~
coldtea
> _He bought several expensive cars, spent time in Thailand, and started
> buying celebrity memorabilia and art?_

Why not? He had a nice experience, and even avoided any long term jail
sentence. What's not to like?

~~~
mathgeek
Morally, there are several things not to like. Of course, this is arguably no
more or less morally sound than someone who legally games the financial system
and buys the same lifestyle. Lots of grey areas, I suppose.

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.

~~~
010a
I'm not sure I feel comfortable talking about morality when banks are
involved.

~~~
lucastx
“What is the robbing of a bank compared to the founding of a bank?” -- Bertolt
Brecht

------
netizzio
Sounds like the bank is just incompetent.

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.

~~~
deeth_starr
This. They usually figure it out later if it's in their benefit. You've got
one month to catch an error on their part.

------
pcr0
Nice to see the turnaround from strippers and cocaine to attending law school
and helping other people out.

~~~
kelvin0
Well he simply switched groups he was 'helping': he used to be helping
Strippers and Coke dealers (financially), now he's helping others with his
newfound law insights and retelling of this story.

~~~
tonyedgecombe
Those others might well be strippers and coke dealers.

------
cup
It's hard to be sympathetic to banks when you know if you make a financial
mistake they'll never compensate you.

The guy was immoral. But in the world of banking that doesn't matter.

------
ben0x539
> My six months behind bars gave me a unique perspective on jail.

I suspect it's really not all that unique.

~~~
bluejekyll
Well, it's unique in that most people still don't spend that time in jail, and
then on top of that he was able to get out without any criminal record.

It did give him enough experience to find something worth doing with his life.

------
dgreensp
> I was just unlucky I guess that it happened to me.

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.

~~~
yequalsx
A loan is a two party relationship and both parties have responsibilities.
Also there are known consequences to default. Defaulting on a loan has nothin
to do with morality as far as I'm concerned. If you are fine with the
consequences of default then do so. It's not immoral as everyone knows the
risk/consequences.

~~~
alogray
Sure -- but typically the result of defaulting on a loan is not debtor's
prison unless you happen to still be living in 1820.

~~~
yequalsx
Yes. I was commenting to what the parent commenter wrote. He/she seems to
think strategic defaults are immoral.

------
slyall
A couple of other examples:

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...](http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10829144)

Student given "unlimited" overdraft, spends $4 million on handbags and
clothes:

[http://www.stuff.co.nz/business/world/80263909/Westpac-
admit...](http://www.stuff.co.nz/business/world/80263909/Westpac-admits-
simple-mistake-gave-Christine-Jia-Xin-Lee-a-5m-overdraft)

------
astannard
and then wasted the rest

~~~
retube
"I spent half my money on gambling, alcohol and wild women. The other half I
wasted.”

------
sflcnetwork
It's unbelievable how the bank didn't notice for that long. That goes to show
the power of what a sysadmin at a bank can have, take money and cover his/her
tracks. Unfortunately for this guy he was in no such position.

~~~
apapli
They definitely would have noticed, but anyone who cared at the bank was a
beneficiary - more loans equals higher commissions.

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.

~~~
raesene6
I didn't see any indication in the article that the bank knew, and as there is
no way this loan would pass their audit checks, I really doubt anyone got
commission for it.

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.

~~~
apapli
Possibly. I still believe this issue is best looked at through a bank culture
lens rather than a technical one.

Although I'll agree with you that the solution will require changes most
likely to both.

------
jlebrech
they weren't charging him interest? if so, why waste money on things that
don't yield a return on investment. you could day trade and just put it back
in the account. and that way you probably wouldn't get arrested.

~~~
jomohn
>you could day trade and just put it back in the account.

That way he would have spent just as much money, but sitting in front of a
computer instead of being coked up with strippers.

~~~
rconti
Ironically, despite having all the money he could spend, he STILL ended up
starting a business!

~~~
bluejekyll
Sounded more like a front to try and explain the money/lifestyle, he didn't
seem to be trying earn anything from it.

------
nurettin
So how did the bank screw up like this? They deal with so much money, you and
your grandchildren could make a living from the rent they pay for a single
branch office. Yet they are unable to purchase the skill set and competence to
stop giving people unbalanced credit or stop international fraud at scale.

------
deeth_starr
I'm not sure about Austraila, but he likely wouldn't pass the bar in
California. I would suggest he picks another profession.

Edit: admitting to amoral behavior, drug use, etc. Those are grounds for the
bar to not let you practice.

------
vijayr
_They were all armed like they thought I might be a mad gangster._

 _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?

------
crimsonalucard
I would've put that money in the sp500. Depending on how long he could hold on
to that credit he would've made a lot of profit that he could keep.

------
user5994461
I'm not sure I understood the story.

Is it that he would transfer money from his account, and it always succeeded
even if there was no funds???

~~~
fuzzy2
Yes. This is called Overdraft:
[https://en.wikipedia.org/wiki/Overdraft](https://en.wikipedia.org/wiki/Overdraft)

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. :)

------
1011_1101
About a year or so from now there will be a "Hollywood-based-on-a-true-
story"-Adaptation of this.

~~~
teddyh
[https://en.wikipedia.org/wiki/Blank_Check_(film)](https://en.wikipedia.org/wiki/Blank_Check_\(film\))

------
lucidrains
Stories like these make me a disbeliever of basic income.

~~~
scott_karana
Hah, fair!

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 ;)

------
devoply
Apparently he had all his fun in 2 months.

~~~
coldtea
2 years. More than most people of his age (or much older ages) get to have.

~~~
bryanlarsen
From the story, the first few months were legitimate, and then the next 12
months were just mortgage payments and only the last few months were crazy
partying.

------
kosei
I don't understand how you could take out $2m and expect not to go to jail or
to have any consequences for your actions. That blows my mind.

~~~
mikeash
They gave it to him. It was a mistake, but you're allowed to accept a gift
like that. I think he was deeply in the wrong to do so, but not in a "go to
jail" sense of wrong.

------
vxNsr
I feel like his main crime may have been tax evasion... Luckily neither the
prosecutor nor the judge noticed...

~~~
TheCoelacanth
Money that you borrow isn't income because you have to pay it back later. Now,
if the loan gets forgiven, then he would owe taxes on it.

