Not Guilty of Bank Fraud After Overdrawing $2.1 Million

Case of Moore v R [2016] NSWCCA 260

The accused Mr. Moore was found Not Guilty after he successfully appealed a Guilty verdict in the District Court for charges of “dishonestly obtain financial advantage by deception” (s192E(1)(b) Crimes Act 1900 (NSW), and a further charge of “dealing with proceeds of crime” (s193B(2) Crimes Act).

The amounts of financial gain totalled over $2.1 million dollars. He initially received a term of imprisonment of 4 years and 3 months, which was overturned when he was acquitted on appeal in the Supreme Court of the Court of Criminal Appeal.

During his appeal, he was granted bail and released in the community. He was acquitted because Mr. Moore ‘s conduct was found not to be deceptive- in fact it was authorised due to a bank oversight.

The Facts of the Case

He opened an account with St George Bank in 2010. The account allowed him to have a negative balance, allowing him to withdraw cash and make direct debits in amounts exceeding his account balance. Over nearly 2 years, each time Mr. Moore withdrew and direct debited money from his account (increasing the negative balance). The bank charged an interest with a bank fee.

He accumulated a negative balance of over $2.1 million by the time the bank closed his account.

In just one of the months, the bank charged interest of $32,689.17. Following a search of his house, police found numerous items, including, signed pictures from Guns N’ Roses, Foo Fighters, Usher, an Amy Whitehouse signed frisbee, Aston Martin DB7, Maserati Sedan, Alfa Romeo.

It was accepted that Mr. Moore knew he wasn’t able to repay the negative balance accumulated each time, but he continued to increase his negative account and spend the money anyway.

He was eventually found not guilty of the charges because the Court found that he was only doing what he was permitted to do by the bank. Even though it was due to the bank’s oversight in not closing the account in the circumstances of this case.

For more information on his case see News Article on Mr Moore.

The Law on Fraud

To be guilty of the offence of dishonestly obtain financial advantage, the prosecution must prove, beyond reasonable doubt, every single one of the following elements of this offence:

• Deceptive: This means that he knew, or realised the possibility of the makings of certain communication to the bank to be untrue (but made them anyway), or he wasn’t authorised to make each withdrawal or direct debit from the account; And
• The Deception Caused the Financial Advantage of $2.1 million, and he intended to do this, or realised the possibility of this occurring but did it anyway; And
• He was Dishonest in obtaining that money: This means he knew that he wasn’t entitled to that money. A defence to this is where he honestly believed he was entitled to the money, in which case, he cannot be found to be dishonest about it.

The Real Issue In This Case

The Moore’s conduct here was found NOT to be “Deceptive” for the following reason:

• Here Mr. Moore’s conduct was permitted and authorised on each occasion, reflected in the terms and conditions of the contract when he opened the account with the bank. In other words, even though he was dishonest (knowing he couldn’t repay the amount but still continued to take the money), he didn’t do anything he wasn’t authorised to do; And
• There was no evidence that Mr. Moore communicated anything untrue to the bank.

For defences to this charge, see Defences to Dishonestly obtain Financial Advantage by Deception.

Can a Bank Recover Money it Mistakenly Gives?

Where a bank makes a mistake, known as a bank error in your favour, generally, the bank is entitled to recover that money from you. It can do this through the civil law, which is expressed in David Securities Pty Ltd v Commonwealth Bank Australia (1992) 175 CLR 353 at 376. That case recognises that any mistake is sufficient of itself to give rise to an entitlement to recover moneys paid.

In this case of Mr. Moore, the Bank’s mistake was not in paying Mr. Moore, rather, it was in continuing to lend him the money. In the end, the bank were able to recover the money by recovering some of his property valued in excess of $1.2 million.

While the bank recovered the money back, the prosecution were unable to secure a guilty verdict against Mr. Moore. This is because he didn’t commit a criminal offence under the charges he faced.

An Example of being Guilty to this offence

Mr. Moore would have been found guilty to the offence of Dishonestly Obtaining Financial Advantage by Deception if he had lied to the bank when initially opening the bank account. Alternative, he would also have been found guilty, if he had communicated untrue information to the bank in order to cause the continued lending of the money.

For another excellent article on this case, see Sydney Criminal Lawyers Article on Mr. Moore.

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