If your bank makes you

Operational Risk Insurance Forum rich erroneously, hold your

By Ram Garg
breath and control greed
July 2, 2009
factor
If you see a $100 note on street, "finders keepers" is the general rule.
But how about a bank error in your favor? Or unexpected and
unexplained banks check of $ 1 million in your post box?

You now thinking to go and buy ticket for your dream travel plan?

Stop dreaming ! there are very strict rules about these windfalls and
they aren't in your favor.

Unexplained windfalls

There are four well published real cases.

1. New-Zealand Westpac case:

A New-Zealand couple Leo Gao and Kara Young, who ran a BP petrol
station on the outskirts of the city, could hardly believe their luck when
they checked their account at Westpac bank on 5 May 2009, hoping to
find their request for a NZ$10,900 overdraft had been accepted.
Instead, the bank had deposited 1,000 times that amount NZ$10m. The
man and his girlfriend reportedly withdrew as much of that money as
they could, locked the doors of their failing business and fled the
country with about $2.3 million.

Both of them are still (2nd Jul 09) on an Interpol wanted listed.

2. A couple Jailed for Missing $175,000 Bank Mistake

A Pennsylvania couple’ $1,772.50 deposit to their FNB Bank account

showed up as $177,250. The couple instead of telling the bank,
withdrew the money, quit their jobs and moved to Florida.

The couple considered the money ‘a gift from God’ and gave away
thousands of dollars, including $25,000 to a Florida church shelter for
the homeless.

The two were arraigned on theft and other charges and jailed in lieu of
$100,000 bail in January 2009.
 Operational Risk Insurance Forum

3. A clerical error by the state in USA

Late in March 2007, the state's accounting system was handling money
for the Department of Human Services which was intended for the
Hennepin County Medical Center (HCMC), when an errant keystroke
issued the check worth nearly $2.6 million to Walker instead of the
hospital. Walker’s account number varied from HCMC's by just one
number.

Walker and her boyfriend, Charles Lockhart, went on a spending spree,

buying several vintage and luxury automobiles, jewelry, retirement
accounts and a U.S. Treasury bond worth $500,000. She also used
$100,000 to pay off a student loan.

The Hennepin County attorney's office charged Walker, with four

felonies in the case, including theft by swindle and concealing the
proceeds of a crime.

4. Commerce Bank and Woodlawn Trustees

A New York City man, Benjamin Lovell, was mistakenly given access to
the $5.8 million account under a man with the same name. The bank
confused the man with the other customer, who has the same name.

The 48-year-old Lovell said he tried to tell officials at Commerce Bank

that he did not have a $5 million account. He says he was told by the
bank that the money was his and he could withdraw the money. Lovell
blew some of the withdrawn money on jewelry and cash gifts to friends.

The man was arraigned on grand larceny charges and ordered held on
$3 million bond or $1 million cash bail.

So, the next time you

receive a bank error in your
favor, go to the bank and
give the money back. Do
not spend it and, by all
means, do not quit your
job.
About author: Ram Garg is a risk management and insurance
professional. He is reachable via e-mail at gargram@gmail.com