Is it a crime to take out a loan with no intention to repay? This question on Money.SE concerned a person who had taken out a number of loans. He didn't intend to repay these loans in full, planning instead to default and leave the country. Several posters on Money.SE claimed that such actions would constitute fraud or theft or some similar crime. Would they? For the purposes of this question, let us assume: The borrower received a single unsecured loan in the amount of $10,000. The borrower did not misrepresent any facts (such as income, assets, etc) on his loan application. At the time of applying for the loan, the borrower had already made up his mind that he would not fully repay the loan; and there is evidence to establish this. (Perhaps he wrote a diary entry to that effect, or bragged about it to someone.) The borrower has sufficient assets and/or income that he could make the payments without undue burden, if he wanted to. The jurisdiction is California, USA (though if other jurisdictions are different, that would also be interesting). Followup: Suppose instead that at the time of applying for and receiving the loan, the borrower did sincerely intend to make his best efforts to repay it in full, but at some later time he changed his mind and decided that, although he had sufficient available funds to make the payments, he wasn't going to do so anymore; and did in fact stop paying. Would that constitute a crime of any kind? Obviously the borrower could be sued in civil court and have his assets seized, etc, - but the question here is whether he could be subject to criminal sanctions.
If, at the time of application for the loan, the borrower has no intention of repaying, it appears that it is a crime. From California Penal Code section 532: (a) Every person who knowingly and designedly, by any false or fraudulent representation or pretense, defrauds any other person of money, labor, or property, whether real or personal, or who causes or procures others to report falsely of his or her wealth or mercantile character, and by thus imposing upon any person obtains credit, and thereby fraudulently gets possession of money or property, or obtains the labor or service of another, is punishable in the same manner and to the same extent as for larceny of the money or property so obtained. The false representation in this case is that you falsely represent your intention to repay the loan. Variations of your scenario invoke other sections of the law. If the false representation is instead about the ability to pay, then section 532a applies. If it's with regards to a secured loan, it's section 532f Deciding not to repay the loan after the fact appears to be a purely civil matter: nothing in Chapter 8 (false personation and cheats) looks like it applies.
Absent a specified jurisdiction, I'm going to assume the US state of New York. This conduct falls squarely within the definition of extortion under New York Penal Law section 155.05(2)(e): A person obtains property by extortion when he compels or induces another person to deliver such property to himself or to a third person by means of instilling in him a fear that, if the property is not so delivered, the actor or another will: [...] (iv) Accuse some person of a crime or cause criminal charges to be instituted against him; There is a defense under section 155.15(2): In any prosecution for larceny by extortion committed by instilling in the victim a fear that he or another person would be charged with a crime, it is an affirmative defense that the defendant reasonably believed the threatened charge to be true and that his sole purpose was to compel or induce the victim to take reasonable action to make good the wrong which was the subject of such threatened charge. However, in your hypothetical, the customer is just seeking a payout. This defense is meant for situations like a theft victim telling the thief "give me back my property or I'll call the cops;" unless paying the customer is actually a reasonable action to make up for the crime, the customer can't use this defense. If the crime is a federal one, this is also blackmail under 18 U.S. Code &sect; 873: Whoever, under a threat of informing, or as a consideration for not informing, against any violation of any law of the United States, demands or receives any money or other valuable thing, shall be fined under this title or imprisoned not more than one year, or both. If interstate communications are involved, 18 U.S. Code &sect; 875(d) can also apply: Whoever, with intent to extort from any person, firm, association, or corporation, any money or other thing of value, transmits in interstate or foreign commerce any communication containing any threat to injure the property or reputation of the addressee or of another or the reputation of a deceased person or any threat to accuse the addressee or any other person of a crime, shall be fined under this title or imprisoned not more than two years, or both.
In general, the law seeks to make all parties whole. There is no mechanism for profit-sharing between thieves and their victims. Victims of theft are entitled to receive their money back plus the applicable rate of interest (called the judgment rate). They are not entitled to profits or windfalls above and beyond the statutory judgment rate of interest. What if the act of stealing the money has destroyed the owner's business and has left him with a lot of debt and bankrupt? Criminal statutes provide for the return of stolen funds plus interest. Recovery of damages, as you describe, is provided by civil statutes and common law. So, to recover damages, the victim would need to sue the thief in civil court.
That's the entire point of a summary proceeding. You're allegedly found committing an offence, that isn't worth the court's time to hear but nevertheless requires some penalty. The only way to "unambiguously deny liability" is by requesting a hearing and denying liability in the notice of this. The court doesn't care what you say to everybody else, it cares what you say on its record. The reasoning is, if you're so sure you're not guilty of an offence, why haven't you sought to argue this in court? And if you weren't committing the offence, why did the informant serve the infringement notice in the first place? The act is not silent at all on this. If you don't request the hearing and serve such notice by the date required, you are liable to enforcement action - whether you deny liability out of court is irrelevant.
In essence, Schwab is stating that they are not a law enforcement agency and they have neither the interest nor the legal right to pursue criminals. They state that they will assist law enforcement but also tell you that, from their experience, law enforcement while they have the legal right also don't have any interest in doing so. This is completely correct. I'm not going to comment on what you should do to protect yourself from identity theft. With respect to the reverse transfer: you are on very shaky legal ground here - you transferred funds without authorization and you are not legally allowed to do this even to recover your own losses. If you had limited this to just recovering your own funds then you would be extremely unlikely to be prosecuted but by taking more than was yours you have technically committed a theft of your own. That said, it seems unlikely that law enforcement will be interested - Schwab are not making a complaint and I doubt that the original thief will - for obvious reasons. However, its possible (even likely) that this was not the thief's bank account - this is likely to be an innocent third party's account that the thief was using to obfuscate their crime. If so, the money you took (both the original amount and the extra $50) you took actually belongs to that innocent party - your money had probably spent very little time in that account.
In my opinion, your question is no different from "If I steal money from a bank to pay off my credit card in the same bank, can I be held liable for stealing". I think the obvious answer is yes for both your question and the modified one, for exactly the same reason.
You don't need to have an existing relationship with a lawyer to refuse to talk to the police. You can tell the police you want a lawyer before answering questions. Generally speaking, this should result in the police leaving you alone, giving you time to reach out to an attorney on your own timeline. This is of course a bit more complicated if you've already been arrested, but in most cases, you'll still be able to make calls out of jail to try to find a lawyer. If you have serious concerns about this kind of situation, having an attorney on retainer would be a good idea. The business end of the transaction is fairly simple. You would likely sign an engagement agreement with the lawyer in which you agree to pay a modest sum -- $500 or $1,000, imagine, and the lawyer would agree to take your calls when they come in and swoop in to deal with the police as necessary. The lawyer would be required to place your money in a trust account and not touch it until you call him to use his services. If you're expecting the lawyer to go further by actually appearing in court for you, filing motions, defending you at trial, etc., the retainer would likely be substantially higher.
What would happen if this money was not returned? The former employee would, based on the given circumstances, be guilty of theft contrary to section 1 of the Theft Act 1968: (1) A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it... Section 5 defines &quot;Belonging to another&quot; to include: (4)Where a person gets property by another’s mistake, and is under an obligation to make restoration [...] an intention not to make restoration shall be regarded accordingly as an intention to deprive that person of the property or proceeds. Setion 4 states that: (1)“Property” includes money... Although there are statutory defences to theft, at section 2, to acting dishonestly they are not satisfied in this scenario: (1)A person’s appropriation of property belonging to another is not to be regarded as dishonest— (a)if he appropriates the property in the belief that he has in law the right to deprive the other of it, on behalf of himself or of a third person; or (b)if he appropriates the property in the belief that he would have the other’s consent if the other knew of the appropriation and the circumstances of it; or (c)(except where the property came to him as trustee or personal representative) if he appropriates the property in the belief that the person to whom the property belongs cannot be discovered by taking reasonable steps. A very similar set of circumstances arose in the case A-G Ref (No 1 of 1983) [1985] QB 182 The defendant, a police woman, received an overpayment in her wages by mistake. She had noticed that she had received more than she was entitled to but did not say anything to her employer. She did not withdraw any of the money from her bank account. The trial judge directed the jury to acquit. The Attorney General referred a question to the Court of Appeal. Held: [by the Court of Appeal] It was possible for a theft conviction to arise where the defendant had not withdrawn the money. There was a legal obligation to return the money received by mistake.