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.
That would have crossed the line from being just immoral to being illegal. Not buying the gold bars, but failing to disclose & surrender them during court proceedings.
I would set up a trust in the British virgin islands or Cayman's, transfer the money out there and maybe set up another trust to transfer into if that one was discovered. He was spending the money on strippers and cocaine, no receipts required.
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 ;)
I'd buy an island in a nation that doesn't have an extradition treaty with Australia, buy a tonne of gold, and move to my island. Whenever I need more money, I sell some gold.
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.
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.
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.
In the US, you have to disclose every arrest, criminal proceedings, etc. along with all debts, so this would come out. And they can can deny you for things that aren't convictions. That said bar examiners like a good human interest story as much as anyone else. A former bank robber got admitted to the Washington bar last year after he started doing Supreme Court appellate work while behind bars.
If he had committed a crime, that would be one thing. Taking advantage of a free spigot of money though, that would get him fast tracked as far as the bar is concerned.
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.
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.
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.
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.
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.
> That goes to show the power of what a sysadmin at a bank can have, take money and cover his/her tracks.
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.
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.
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!
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.
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.
"this guy was smart enough to actually represent himself"
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 will not be sad when AI automates away the majority of the legal industry.
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...)
Seems to be more of an issue with the lower court judge than the lawyers
(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.
If you borrow $2k from the bank and can't pay it back, that's your problem. If you borrow $2 million from the bank and can't pay it back, that's the bank's problem.
It's actually called fraud, at least in the US, and will be investigated by the Secret Service. If you experience such a windfall in your account, seek written permission from the bank before spending any of the money.
He didn't find the windfall - they just gave him a large line of credit. You could claim it was fraudulent because he didn't plan on paying them back, but it's not the same as suddenly finding money in your account.
Yep, significant difference. I've seen several stories of people prosecuted for spending improper deposits, but presumably a loan - where risk is implied and defaulting is an understood practice - is a different beast.
He seems to be trying to justify his actions by calling it a loan, but I've never heard of a loan where the bank tells you that you can just start over drafting your account and let it go negative, then pay us back later.
Overdraft lines of credit are definitely a thing and can be arbitrarily large depending on the account holder.
My bank keeps trying to sell me this, I don't see why this would be a good idea. Does anyone here use this?
Also, one time our old bank erroneously withdrew a 6 figure sum from our operating account which put the balance far in the negative. I was stunned that they covered it and bemused to see a 35$ 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 used an overdraft line of credit once, accidentally. Then I turned it off. The bank salesman had sold it to me as “overdraft protection,” and at the time I didn’t know what “overdraft protection” meant, so sure, protection is good, right?
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.
>And if you’re overdrawing on a debit card, then you’re probably poor and those fees are a substantial burden.
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.
The article mentions a bank that now notifies customers in fine print about this practice on the basis that "it is good as long as the customers are notified".
So definitely still happening. (article from 2016)
The article mentions a bank that now notifies customers in fine print about this practice on the basis that "it is good as long as the customers are notified".
So definitely still happening. (article from 2016)
Wow, this is another reason we need developers to study ethics. No one should have agreed to write software that _reordered_ transactions to maximize fees.
In the UK (and presumably Australia) you can get an overdraft on your account and you don't get charged a fee. You get charged interest (like around 18%/year) charged only for the days. So it can be used as a buffer against charges, whilst you keep your money in a higher interest rate account.
I know someone who uses this. He's a contractor and small business owner, so his earnings are high but his cashflow is incredibly variable.
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.
I actually think it is a very good idea for most. I have plenty of money but I generally sweep most into various accounts and keep a minimal amount in my checking. On occasion things will miss and I might write a bad check.
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.
I use it in occasion but have never really thought of it as a line of credit because there is no interest, rather a flat $35 fee. I find it to be useful. Sometimes I miss a deposit and one of my checks takes me in the negative. The overdraft protection keeps me from bouncing a check, which is a crime and you can have a warrant issued for your arrest.
I don't know about Australia, but in the U.K. that's pretty much standard. Most current accounts come with an authorised overdraft limit, even if it's just a few hundred pounds. I've had to specifically state that I don't want one when opening an account.
He says that, but the way he explains it, it sounds like they just didn't have an overdraft limit on his account. To me, there isn't much difference in doing what he did and grabbing a handful of money out of an open cash register because no one is watching it.
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.
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.
Their original job was to protect the currency. They got the job of protecting the president because at the time they were basically the only federal agency with the right capabilities.
I've heard that phrase before but with a few extra 0s. $2m isn't really that much for a bank these days. Besides they probably were able to get a fair amount of that back in the stuff the police took.
Yep, our next president was over 1 billion in debt which is oddly enough a powerful position to be in as they really don't want you to default.
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.
INAL, but I assume that the bank had to have an explicit agreement for that credit in order to have now a solid legal position. Considering that and that to get these money back they now have to build a case against a lawyer, it's safe to assume that they won't try to do it. They face a costly legal battle and are in a weak position, which means a high risk of just loosing even more money.
I am actually wondering how this article is so blog like and still made it onto bbc and makes you think it has some journalistic thought given to writing style and content
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.
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.
No one would get locked up because there is no such thing as morality? There are only ethical systems setup for a certain goal. At least that is true if there is no deity that a) tells us anything, and/or b) that gives a shit about what it said.
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.
Things like this are why it takes me 3 months and numerous trips to the bank to get a home equity loan. I also need to provide proof of what I was going to do with the money. On the plus side I got to witness the loan agent having to use a typewriter in 2016.
> 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.
> 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.
That's my thinking as well. He would have known that there wasn't a chance in hell he could ever pay that back, nor could he reasonably have believed this situation might change in the future. I would expect this, combined with the amount, extravagance, and opportunistic nature of this whole thing, to show intent to defraud. (But I don't know much about Australia's legal system.)
Whilst IANAL, it would seem logical that a court would look at whether the defendant could reasonably have expected to be able to pay back a loan.
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?
What if I play it on blackjack? It may be incredibly poor judgement on my part, by what if I totally intended to win & pay it back, with interest?
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.
"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.
> "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).
well in the UK when you want to take out a loan, the bank is legally obliged to look at your ability to repay and not loan you the money if you don't appear to have the ability to repay. Home owners have collatoral, business have business plans, those are assessed by banks for ability to repay.
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?
But he effectively asked, can I borrow for my next mortgage payment and the bank said "sure". And then he asked for more money and more. He didn't take 2 million $ loan. Just many smaller ones. Which all have been approved by the bank. Just not by any human at the bank.
And you don't think that's a sophistry? Let's be honest he knew full well the bank, if actually asked, would not have approved his borrowing, any reasonable person would.
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 understand that many people don't give that much thought to money, banks, how they work, what they do and what they don't do. People go to bank to get a house. Then just make transfers for the amounts that bank tells them.
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.
If you have money available and feel down that's imaginable thing to do. Even if that money doesn't come from savings. For me that doesn't look like a obvious part of some fraudulent masterplan concieved months earlier.
Are you kidding? What job skills did this guy have that would let him pay back $50,000 he was wasting on expensive cars? And then over a million on that, strippers, and cocaine? The guy had no plan, no responsibility in amount borrowed, wasn't seeking jobs, and ran it up to around what many make in a lifetime.
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.
Sure, maybe he was planning to win the lottery when the payment came due.
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.
He had a business, which he must have opened with money that was borrowed from that bank. Maybe he expected his business would take off and give him more money than what he owed.
The charge he faced wasn't fraud, but that of "dishonestly obtaining financial advantage by deception", which has a number of different facets to fraud. I think his "Oh, I just kept asking for more" thing doesn't really pass the smell test.
It doesn't sound like deception was involved if all he had to do was keep asking for more money, nor dishonesty if they never questioned him when he asked for it.
In some countries (not sure about Australia) it is a crime to take on a loan with no intention of paying it back. This is probably why at the start of the article he says: 'It seems unbelievable but my intention was never to take all the money from the St George Bank and not pay it back.'. Obviously it is very difficult to prove that someone has no intention of paying back a loan.
But he didn't take out a loan. The bank kept giving him money whenever he wanted to withdraw it. That is not a loan. A loan requires explicit agreement and a fixed amount.
He signed a contract when he opened up the bank account. That contract would have included clauses establishing liability for overdrafts, even if the bank account didn't include an overdraft facility.
He was acquitted because they charged him criminally instead of in civil court. He should have had collections go after him while he deals with wage garnishments, not jail time.
It does say he "mistakenly" had this line of credit. At least in the US if $2 million "mistakenly" shows up in your bank account, and you know it's not yours and you spend it anyway, that's a crime.
Now, that's not the same as having a line of credit mistakenly opened, but there's some logic to it being a crime.
Clearly, he was acquitted, so the law must have worked out as you say. I'm just pointing out that it's not completely out of left field for there to have been an investigation and trial to determine if he was guilty of a crime.
The article says why he was acquitted: "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."
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.
> 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.
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.
I don't think whether or not everyone knows the consequences is relevant. You can work out the purely legal or administrative downsides (to you) of lots of things.
It's relevant in the case of defaulting on a loan. Both parties in theory know the risks/consequences and, in usual circumstances, willingingly agreed to the legal framework of the loan.
It's a two party situation if both parties are aware of it. I didn't read any implication in the article that the bank knew about this, it was a mistake either human or software that led to him having the credit line.
so only one party was aware of it, the customer, therefore their responsibility for the borrowing.
So if your friend tells you he's hard up for rent and you loan him 1000 dollars he can decide not to pay you back and it "has nothin to do with morality"? After all, you were aware of the risk that he wouldn't pay you back.
One should never lend money to friends. Make it a gift. Never have an expectation of getting it back. One lending money the person should understand this but not everyone does. In the situation a friends it would be immoral to not try to pay it back. In the situation of the lender being an expert who understand the pricing of loans and understands the risks then it isn't a moral issue.
What if am an expert who understands the pricing of loans and understands the risks, but I make a personal loan to a friend? Is it immoral to not try and pay it back then?
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.
The comparison to a locked house is not apt. It would be apt if I made an agreement with the thief that specified what happens if I willingly decide to leave the door unlocked.
When there is a contract it becomes civil legal matter and morality does not come into play.
Seriously, what an asshole. He "was just unlucky"? No, there was not a single piece of bad luck for him in this whole affair. Something strange happened to him, but it was easy to handle without screwing anything up: just tell the bank they messed up, or even just ignore it. Deciding to start spending the money like crazy was not bad luck, it was bad judgment.
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.
> No, there was not a single piece of bad luck for him in this whole affair. Something strange happened to him, but it was easy to handle without screwing anything up: just tell the bank they messed up, or even just ignore it. Deciding to start spending the money like crazy was not bad luck, it was bad judgment.
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.
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.
So what? It's human nature to bash in the head of a stranger so you can take their food, but I wouldn't accept someone calling it "unlucky" that they happened across a defenseless stranger all alone with some good food.
> 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.
I wonder what would be your take on the whole case if he used the funds to build successful company that paid all the funds back, and paid for strippers and cocaine.
That would be a lot better. I still wouldn't approve of it, but at least he'd be doing something useful with it.
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.
No idea why you're being downvoted, I guess because people feel like fuck the banks, he got a good one over on them!
I hate the financial industry too, but this guy knew 100% what he was doing was wrong morally, and didn't plan on paying that money back. His hardships from his actions are 100% his fault, even though I agree that he is not technically guilty of a crime. I am glad he isn't in jail, but he put himself there.
Institutions like this that have no sense of financial responsibility are an evil in the world. They lend out millions of dollars of other people's money, declare the debts in default (presumably), and when their actions are deemed imprudent and unprofitable, though not technically illegal, they acts like that's just name-calling and get right back up on his high horse. Remind you of any Wall Street bank?
Like with most polarized issues, the truth is that both parties were in the wrong in different ways, and the blame, and thus legal action, should lay distributed between the two.
"both parties were in the wrong in different ways, and the blame, and thus legal action, should lay distributed between the two"
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.
Except that's not what appears to have happened here. I didn't see any suggestion in the article that the bank knowingly lent out the money, most likely a human error or bug in one of their systems caused his account to have this line of credit applied to it.
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.
You know, I'm not saying he's a great guy, but that quoted comment seems very out of line from the rest of the article. "I was just unlucky" seems taken out of context somehow. For example, he said he wouldn't have done it again because of how it destroyed his life and wasn't worth it. So I suspect the "luck" was about some narrow specific component and not the fact that he got arrested. Obviously he knows why he got arrested.
He might got an idea after the fact, but that arrest should have never happened. Like someone around here mentioned, the bank wanting the money back is a civil matter and the bank should have tried to approach him amiably. Everything about it could have gone without the arrest and jail time.
"Remind you of any Presidents-elect?" - you mean he knowingly committed fraud and then said it wasn't fraud? More reminds me of the loser of the election. ;)
> He spends millions of dollars of other people's money
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.
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.
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.
It's pretty unique to people who are studying to be lawyers because most people with 6 months behind bars are convicted criminals (who usually can't become lawyers).
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?
We had to set money aside because all our bills showed a credit - we weren't making thousands of dollars in phone calls every month.
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.
> 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.
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.
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.
> 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.
Indeed. Or to be even more specific, financially responsible people never find out what happens when they draw their checking account below the zero balance line.
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 ;)
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.
242 comments
[ 4.6 ms ] story [ 249 ms ] threadThe guy was immoral. But in the world of banking that doesn't matter.
Only scum. FFS it was theft. There was no moral high ground here! What a dipshit.
https://news.ycombinator.com/newsguidelines.html
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.
> July 2010 to August 2012: Makes more than 50 withdrawals, apparently totalling $1,988,535.25
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. ;-)
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.
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. :)
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.
Luckily this guy was smart enough to actually represent himself - credit to him for that!
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.
[1] https://www.clio.com/
https://www.theguardian.com/technology/2016/jun/28/chatbot-a...
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!
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...)
(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.
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)
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.
Excuse my poor humour :D
Used to be; but now they are part of Homeland Security.
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.
morals for lawyers? unbelievable...
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.
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.
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.
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.
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.
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.
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.
so only one party was aware of it, the customer, therefore their responsibility for the borrowing.
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.
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.
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.
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.
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 hate the financial industry too, but this guy knew 100% what he was doing was wrong morally, and didn't plan on paying that money back. His hardships from his actions are 100% his fault, even though I agree that he is not technically guilty of a crime. I am glad he isn't in jail, but he put himself there.
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...
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)
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...
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.
I suspect it's really not all that unique.
It did give him enough experience to find something worth doing with his life.
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?
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.
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.
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...
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.
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 ;)
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.
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?