Woman charged with blowing AU$4.6m overdraft on 'a lot of handbags' A 21-year-old woman has appeared in court in Sydney accused of taking advantage of a Westpac Bank glitch which saw her accidentally granted an unlimited overdraft against which she allegedly withdrew AU$4.6m, "part of which she spent on luxury handbags", as news.com.au puts it. Chemical engineering student Christine Jiaxin Lee …
"dishonestly obtaining financial advantage by deception and knowingly dealing with the proceeds of crime"
WTF? They have THAT on their statute? ..and even if they do, how can any of it possibly apply?
Who do they allege she deceived? The bank gave her the money.
Proceeds of WHAT CRIME? The imaginary deception which NEVER OCCURRED?
"failed to notify the bank that she was not entitled to the money"
Oh! That's her "crime"? Like when those corporations lower their prices, interest rates, or whatever to steal eachother's customers but fail to notify their established victims that they are no longer entitled to the money then?
Or just give our money away for the hell of it. Oh look, you've noticed we've been handing your money out to all and sundry without bothering to check for your authorisation? Well you've been identity thefted then. Tough shit sucker.
Talk about one "law" for them and another for us. The bank seems to have plod on their pocket. Taken a few years for the bank to find the right palms to grease though - by the sound of things. She should sue. Slander, defamation, wrongful arrest and malicious prosecution.
...then dig up the patio and go and live somewhere less corrupt.
If someone gives you something by mistake, and that mistake it quite obvious to any sane person, then you don't get to pocket it, and run away crying "Too late, your mistake! It's mine now!" That's not how the law works.
This woman had no reasonable, sane, expectation of a AU$4.6m overdraft. Taking it and ignoring attempts to contact her is theft. Classic "Not thinking the thing through" and "If I ignore the situation it'll go away" behaviour.
You can criticize the bank for its mistake, and the length of time taken to pursue the matter. But you don't get to steal from someone just because they are careless and incompetent.
This woman had no reasonable, sane, expectation of a AU$4.6m overdraft.
That's the fun part, I think - it wasn't an overdraft. She remained in credit throughout :).
As for sane expectations, cool, so she could plead temporary insanity? If she were a professional banker she would indeed get away with squandering other people's money without consequences - after all, we've seen that during the Wall Street originated global crash.
You can criticize the bank for its mistake, and the length of time taken to pursue the matter. But you don't get to steal from someone just because they are careless and incompetent.
Once upon a time, if the bank blew it and gave you too much money, as in this case, it was yours unless you were kind-hearted and decided to return it. The onus was on the bank to take due care and this more or less helped enforce it. Things have turned around a bit.. now it's your fault if the bank screws up in your favor. Come to think of it, it's your fault whether it's in their favor or yours. My, how times have changed....
Well no. When they cock up and the client steals lots of money, it's the client's fault.
Sure, it's fun to laugh at the banks. And also, they've fucked up big time. So they're also to blame, for incompetence and putting massive temptation in someone's way. But you can't claim that the money is magically yours, just because the bank have messed up. And if her account is showing an overdraft, then she should also know it's a loan. Taking out a loan you have no intention or ability to pay back is basically fraud - at least if you plan it that way. But that intent is hard to prove, the bank are also responsible for checking your ability to pay an unsecured debt, and there was no intent to begin with here, as it was the bank's cock-up, presumably discovered accidentally.
HP once paid my company an £120,000 invoice twice. It took me most of a month to persuade their payments department that they'd made a mistake, and did they want their money back. Had I not bothered, and knowingly kept the cash, that would have been theft.
You are right except the lady did not take the money. The bank extended a loan to her and she accepted. It is not a gift. Also, the bank did not incorrectly deposit $4M to her account which she the used. The bank extended a credit facility to her and she accepted.
We can question her judgment for accessing so much of the fund and what she used it for. We can also consider whether or not she expected she would be able to repay it. But your argument that what se did was theft because she used money given to her which she was not entitled to is off base.
I don't buy that argument. The definition of theft in the UK is to take property belonging to somebody else with the intention to permanently deprive them of it.
Taking a bit more overdraft than you're allowed, not believing your luck and getting an extra few nights out is not theft. The bank screwed up, tough titty.
Taking millions of dollars of money that's not yours, systematically over a long period of time, because someone else has obviously screwed up, knowing that you'll never be able to pay it back is another matter entirely.
There's a point at which any reasonable adult has got to say to themselves, there will be consequences. Sure, the bank offered her a loan. But we're all adults, and we know what loan means. Loan means: Repayment. With interest.
If she successfully argues that she can't count. Or was too stupid to be able to manage her money, or too stupid to realise that it wasn't her cash allowing her to literally spend millions - then fair do. I just spent the cash until the card was declined, that's how I manage my finances - could be a valid defence. Execpt when you start taking out thousands of pounds in cash, or buying Gucci handbags. Then you surely know what you're doing.
My cash card only allows me to take out £500 a day. So to get a million in cash out of my bank, I'd have to daily go to the cash machine, and take out the full whack, for 200 days! That would be, by any reasonable definition, a calculated act.
The bank fucked up. No sympathy. They put huge temptation in her way. But she took it. At some point, giving in to that temptation was a choice.
If I find £1,000 in cash somewhere, that money isn't mine. Keeping a fiver you find is fair enough, it's impossible to trace. Good luck to you. If you find £1,000 though, someone's going to seriously miss that.
Doh! Sorry. Basic counting error.
There's a higher limit for withdrawals from branch, although in that case you might have to fill out a form (to get larger amounts), and you'd have thought they might notice. There's also cashback on debit card transactions (if they do that in Oz), and of course they may have higher ATM limits. I'm sure I could get mine raised, but have never needed to.
The point being that it takes conscious effort to get large amounts of cash out of a bank account. Which requires thought, which implies planning, and at some point that planning may become criminal. What you need to determine "mens rea" - i.e. Did you know your actions were wrong.
"<snip> make withdrawals "on numerous occasions that totalled $4,653,333.02" between July 2014 and April 2015."
"Although fraud cops began an investigation into the matter in 2012, it wasn't until March this year that an arrest warrant was issued"
So, the cops knew that she had access to this money two years before she did? I'm confused.
Where can I get one of these time machines? I would happily sell my house just to rent one for long enough to go back in time and put £1000 on Leicester to win the premier league. Its a shame that the bookies won't make a mistake like that again. I'll even bet a fiver that Christine Jiaxin Lee would like to use some of her overdraft to do the same, just so that she can pay off her overdraft.
So she spent a lot of money on designer handbags... that's fine.
When she thought she was going to get cuffed she tried to skip town... OK.
But how was she planning to get her loot out of the country if the airline only allows one piece of hand baggage...?
Mark 85,
Making a mistake is not a crime. And remember that the banks weren't checking carefully, but also the mortgage applications require you to say you can pay the money back. So you have to lie in order to get the money. Also, in a housing market with prices rising at silly rates like 10% a year, it's not that big an issue. If you can't pay after 5 years, you just sell, and everyone gets their money back - with you making some profit.
My brother quit as a mortgage underwriter in 2006 because he was sick of arguing with his bosses about whether to put through applications that were, in his opinion, dodgy. But even if you could prove that company did commit fraud, it wouldn't be on the people they lent to. It would be because they were then packaging up the mortgage debts and selling them on as CDOs - if you could prove that they were lending in cases where they believed the mortgages were riskier than they actually were.
Anyway the subprime mortgage crisis is not really a tale of fraud, but of market failure. There were two problems. The theory of CDOs was that you often packaged good mortgage debt with bad, in order to make the bad more sellable. Then even in a crash the good would still keep paying, and the repossessions would cover most of the loss of the bad. You sold the debt at a discount, so it was theoretically exremely low risk. Hence the AAA ratings. Unfortunately, this turned out to be bollocks.
The theory was actually correct though. Most of the UK packaged mortgage debts (CDOs) are still paying back at better than the worse predicted failure rate. So they weren't fraudulent, the calcs were correct and a lot of it was actually worthy of its AAA rating. There was some high risk paper, that was trading at bigger discounts, so you'd make more profit it it went right, but that wasn't AAA and so nobody could complain if it went wrong.
The second problem was that the market failed. Everyone panicked. Nobody trusted anybody else anymore. The banks wouldn't lend to each other, as they were scared the other banks were holding loads of worthless paper, and might go bust at any time. Which of course meant nobody would admit to what they were holding, which reinforced the crisis. Since nobody properly understood these CDOs, nobody was able to value them, so they became unsellable. Even though it's turned out that most of them were in fact correctly valued. So if you had a load, and needed cash, you had to sell at 50% of book value (to companies that have made a very nice profit since) - but that meant you were burning through twice the amount of reserves you needed to for a given amount of cash, which meant you didn't have enough reserves. That's why the banks needed bailing out. Most of them were in fact perfectly fine, but a crisis of markets and confidence made their survival impossible - hence we needed Central Banks to save the day. Which is why most of them have paid back all those loans. Hence the oft-quoted line about giving the banks money is bollocks, we lent them money because they were solvent (but illiquid) - which is the job of a Central Bank. Some we re-capitalised, and took shares in compensation.
Anyway the subprime mortgage crisis is not really a tale of fraud, but of market failure
Absolutely not. The subprime mortgage crisis is a classic example of what happens when regulators as well as rating agencies don't do their job at all and let banks sell something that would not have stood up to even the most cursory examination - which is why everyone was actively looing the other way.
Yes, people have to make a promise of repayment, but if you start rewarding people for mortgages without ANY check on the feasibility of such a repayment you are willingly creating a mirage of value where none exists, and we all know what the end result was.
You might want to read The Big Short or watch the film made of it, which is actually quite an interesting way to make the key concepts understandable for everyone). Not that this mattered much, Wall Street has by all indications already resumed causing trouble - now they have found a way to divert the attention (why do you think those tax haven reports keep showing up?) I'm sure it won't be long before we get hit again.
When you ask the bank for an overdraft, if they think you can repay it, they will agree it and charge a small fortune for using it. If you exceed the limit, they will charge you a large fortune but crucially can still let you keep spending up to the maximum they think you can afford to repay. If you're the kind of person who assumes you can keep spending until your card is declined, the bank will let you because you're a cash cow and the total fees outweigh the debt write offs.
Sounds like this time, the customer kept spending and the bank kept letting her. The crime is reckless lending by the bank, not fraud by the customer.
Reckless lending isn't a crime. Though it's obviously a stupid thing to do. It's interesting as to whether the customer committed fraud. You have to prove intent to prove fraud. And this was a cock-up by the bank apparently, not a deliberate plan by the customer. On the other hand, if you're making your tenth, twentieth or thirtieth withdrawal of $10,000, which you know doesn't belong to you, and you can't pay back, surely at some point you're doing it with the intent of stealing it. The first time is a lucky accident, and a windfall. Can you still say that by the 20th?
If I give you the bag with my wallet in by mistake, instead of the one with your birthday present, does that give you right to spend all my money?
Oddly the law is not, "finders keepers". At least not in the UK, I can't speak for Australia.
> On the other hand, if you're making your tenth, twentieth or thirtieth withdrawal of $10,000, which you know doesn't belong to you, and you can't pay back, surely at some point you're doing it with the intent of stealing it. The first time is a lucky accident, and a windfall. Can you still say that by the 20th?
This may be a good point assuming that the client in question is capable of keeping the tracks of money and things.
Do you really think it's a reasonable expectation given that she, well... apparently blew a note-worthy portion of these millions on fancy handbags of all things? She's a valley girl. :D
What's a bank overdraft? It sounds like it's a little more than the "overdraft protection" we have on bank accounts. Indeed, it sounds like a massive line of credit.
Here, if you have overdraft protection, the bank either fronts you money for an enormous interest rate (but still less than bouncing a check) or transfers money from your savings if you have any. It's generally not a good thing to run your checking account in the negative for too long because the interest adds up. Is that not the case in the UK/Australia? When you get paid, do you just reduce the negative balance but forever owe to the bank?
I haven't used mine in ages, and I think the bank took it away a couple of years ago. But when I first opened my account with them I had £50 of free overdraft. This meant that if I made a small mistake, I could borrow £50 - so long as my monthly salary was paid into the account. That was free.
I did briefly also have an agreed overdraft. I think this was about £200. So I could spend this extra money. But at the end of every day I'd be charged interest on it. I think it was about 10% (when the base rate would have been around 5% at the time). So whatever a day's worth is of that.
There was once an error with their cash machine software. I was £10 overdrawn, but instead of showing O/D £10 - the machine showed O/D £10,000.00! Which caused me a moment's panic, I can tell you.
There's a third type, which is the unauthorised overdraft. Some banks or accounts don't have one of these. In which case they'll just bounce the cheque, your debit card will be refused, as will direct debits and cash withdrawals. Mine would allow this. But every time you went into the unauthorised O/D they'd charge you a £10 fee, the interest rate was something like 50% annualised - and they would also charge you £20 to send you a letter to tell you to pay it back, if you were above your authorised limit for more than a couple of days.
When I lived in Belgium, I don't think even rich people were allowed overdrafts. I can't remember if it was a legal issue, or just that the banks didn't do them. Even credit cards were different. You couldn't put debt on your card, as you can in the UK. It didn't take money out of your account when you spent on it, but all the outstanding money came out of your account on the last day of the month.
In Overdraft protection is a scan am its garbage.
In most of the rest of the world overdraft is a credit facility you apply for like you would a credit card. It allows you to over draw your checking account up to a certain level. So with a $10k overdraft you can have a negative balance up to $10K and the bank charges an interest on it like any other loan.
Usually you are not able to draw above that balance.
Here in the USoA you pay for overdraft protection only because the banks are scamming us. Instead of denying transactions as NSF they charge us for an overdraft on a per transaction basis and also charge us for overdraft protection, a small fee to transfer funds from our savings account to our checking account to prevent the checking from going into OD.
A few years ago before the feds cracked down on them the banks would order our transactions to maximize the overdraft fees. If a $1 transaction today causes our account to go into overdraft. Their system would reorder the processing of the transactions so that the largest transaction that is pending is processed first. A lager transaction 48 hours ago that is processed before a $1 cent transaction today so that all the transaction for the past 48 hours incur overdraft fees. At $35 per transaction this amounted to charges of over $20Billion.
She did not take or keep money that was not rightfully hers. She took advantage of an offer of credit - the same as millions of people do when they take out a mortgage or take a credit card that was offered to them. My bank has offered me various overdraft limits over the years which I have never asked for, and which have no obvious connection to what I would be able to repay in a reasonable time, so there is no reason at all to believe that you are not entitled to an overdraft limit that you have been unilaterally given.
You might argue that it is illegal to take out a loan that you have no intention of repaying - but could that be proven in this case? She may have had a genuine belief that one day (after she becomes a rock star or movie actress) she would easily be able to repay a $4 million overdraft (and if inflation speeds up any more she may well be perfectly correct even if she works an ordinary job).
She took advantage of an obvious mistake. Not obvious I'm sure, when she took the first couple of hundred of free overdraft.
Maybe she's just not competent, and kept spending. But you'd have to be pretty bloody stupid to not notice once your overdraft has hit your monthly salary. And it stretches credulity, once it's passed your annual salary.
But surely at the point when you look, notice you're overdrawn but not being charged interest, or are but the limit's not stopped growing - you make the decision to try and make your first $1,000 purchase or cash withdrawal. Surely at that point, you're doing it knowingly. It takes quite a lot of effort to spend or withdraw millions in cash. My daily cash machine withdrawal limit is only £500. And I think anything more than £1,000 over the counter has to be booked in advance, and a form filled out.
Any other argument is just sophistry. Although the bank put serious temptation in her way. So it's not like they deserve any sympathy. And they deserve to lose most of the cash when she inevitably declares bankrupt.
What if she had used it to make a shrewd investment or two, and doubled her money? I daresay that if everyone commenting here had access to that much credit (without worries that we'd get in trouble for using it) I'll bet a couple people would make such shrewd investments. Others would make bad investments, or blow it all in Vegas, or be afraid to touch it and leave the credit there (I wonder what having an untapped $4 million credit line does to your credit rating?)
The bank screwed up, and while she should have known and I'm sure did know that it was a mistake on their part, it sure as heck wasn't theft. I don't see how they can charge her any differently than if some rich guy came in, applied for a $4 million credit line to start a new business, and had the business fail. He owes the money, and if he can't pay it back will negotiate the debt down or be forced file bankruptcy. Heck, if the rich guy in question was Donald Trump he'd get that credit line for a corporation, and not personally guarantee it, so if the investment failed the corporation would go bankrupt and the bank would be SOL.
So what should happen is that she should be served with an order to pay it back per the terms of the credit, and so long as the debt can't survive bankruptcy she'll end up filing bankruptcy and the judge will make her hand over all her handbags and whatever cash she might have stashed somewhere. The bank will learn the cost of making mistakes, as they should. And after 7 years (or whatever the time limit is in Australia) the black mark of a $4 million bankruptcy will drop off her credit report and she'll eventually be able to get a mortgage loan. Presumably for a house costing much less :)
"Maybe she's just not competent, and kept spending."
She's 21 years old, and she spent a lot of money on hand bags, I would think someone with clear criminal intent would be a bit more creative in their spending, and disappear before the cops got on her trail.
I'm more inclined to think naive here rather than criminal mastermind
Isn't an overdraft essentially a pre-approved loan, with a limit?
So if the bank gave the punter a higher "credit limit", and the punter went on a shopping spree, there is no crime committed. The bank simply has to call in their loan, which banks do all the time. If the punter refuses to pay, then they go after a debt judgment.
Where is the crime here? That she spent it on tat? All of Essex would be in the slammer on those grounds. Maybe she tried to skip out without paying?
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