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A curious thing here is that, if this article is correct, the man spent 16 months in prison, and had repaid the amount stolen by then. It seems reasonable to as

A curious thing here is that, if this article is correct, the man spent 16 months in prison, and had repaid the amount stolen by then. It seems reasonable to assume that if he had not invested his stolen money in real estate he would not have been able to repay his debt to society so cleanly. I wonder if in the end he didn't make a sizeable profit from all of this.

thinkingemote 3y ago
This got me confused. Says he "repaid the proceeds of his scam to cover the city’s insurers". Does that mean it was lower than the amount stolen and just the amount the city paid the insurance? So he paid the premium but not the total amount covered? edits: another source says he settled with the insurance company which implies its less than the total amount.
- toogan 3y ago
  Typically when you have damages and are insured, then the insurance pays you and then goes after the original claim to get their money back. That is, the party that had the original damage leaves the claim to the insurance which then deals with getting the money back from the perpetrator while the original victim already got their money from the insurance. This also moves the risk of the perpetrator not being able to pay the damage. Now the victim does not carry that risk anymore. The insurance does. Which is their value proposition.
mrtksn 3y ago
That's actually pretty common criminal activity in banking, where an employee will take money from accounts of clients and "gamble" it on high-return short term investments. Obviously I won't be naming Banks here but what usually happens is: 1) If they succeed in their investment they put the money back and walk out rich. Their venture can be detected during an audit some time later but if there's no money missing the worst that will happen is that they will be fired because banks are very sensitive on their reputation and they don't want people to hear that its possible for a such thing to happen. They also don't want the insurance and other regulatory bodies to hear about this. 2) If they are caught before returning the money(this could be audit, customer complaint or a whistleblower) they will be given the option to return the money and get fired. If they can't return the money, then a formal investigation and criminal case is initiated. 3) If they lose their investment, they will flee and trigger an audit. They won't be able to resign and leave gracefully because the process of using this money involves periodically putting it back at strategic times to avoid trigger an audit due to discrepancies, therefore it's very risky to keep coming back to work if you don't have the ability to put the money back at short notice. This is one of the reason for people in banking having mandatory 2 weeks time off at a time in many jurisdictions. Stealing needs maintenance and maintenance needs access. I also wouldn't call it "repay his debt to society" because due to money that he stole, he made the public transport more expensive and housing less affordable.
- deleted 3y ago
  [deleted]
- nicgrev103 3y ago
  Isn't this literally what banks do? Take peoples deposits paying a minimal interest rate and then invest that money to earn a return higher than the interest rate they pay the customer (they actually will also borrow more money on the back of your deposit). So, when it's the bank doing it it's ok but a bank employee doing it independently for personal gain it's an issue. The book deal aspect was interesting also. So, the guy profits and has a potentially lucrative book deal with minimal jail time.
  - mrtksn 3y ago
    Yes but banks do it within a legal framework that moderates the risk(at least in theory) and people know what they are signing into and what are their guarantees. You don't see too many banks collapsing, don't you? When it happens, its a big deal like with the SVB earlier last year. It's also what Sam Bankman-Fried and others did in exchanges that acted as unregulated banks. The system is not perfect and there are many scandals but if you compare it to what happens in crypto exchanges, its a day and night difference. Running a machine as intended and screwing up is different from pretending doing one thing and actually doing something else and screwing up. This is also why bankers and fund managers don't usually go to jail when they lose clients money. It's not illegal to suck at your job as long as you follow the rules.
    - lotsofpulp 3y ago
      >You don't see too many banks collapsing, don't you? When it happens, its a big deal like with the SVB earlier last year. "Moderating risk" = depending on the US federal government bail you out? There really is no need for the charade of banks now that electronic databases are very solid technology. Their whole role in transmitting and keeping an account of money is surely reproducible by the federal government at very little cost (maybe even lower cost due to not needing FDIC and all that infrastructure) without having to pay a middleman.
samirillian 3y ago
Yeah, I mean, real estate in BC (where he bought one of his properties) is notoriously corrupt, and lucrative. Most real estate bought in BC is paid in cash, often by some dizzying maze of LLCs or whatever the Canadian equivalent is. Essentially money laundering and investment rolled into one.
- sbarre 3y ago
  > Most real estate bought in BC is paid in cash, often by some dizzying maze of LLCs or whatever the Canadian equivalent is. This is provably false. It's not "most" real estate, it has only recently approached 30% or so, and only in hot markets like Vancouver and Victoria. There's a money laundering problem in Canadian real estate for sure, but let's try to be reasonably accurate in our statements, shall we?
  - margalabargala 3y ago
    Holy cow. 5% would be high. 30% is dizzying. You're saying that if I pick a random recently sold BC property, there's a one in three chance it's bought with cash? That's not a money laundering problem, that's a money laundering infestation.
    - sbarre 3y ago
      Again, not across all of BC, but in hot markets like parts of Vancouver and Victoria.. It sounds high but it seems to be normal enough? I found this with some quick Googling: https://www.thestreet.com/housing/a-surprising-number-of-homes-are-bought-for-cash https://www.thestreet.com/housing/a-surprising-number-of-hom... https://www.washingtonpost.com/business/interactive/2023/all-cash-buyers-housing-market/ https://www.washingtonpost.com/business/interactive/2023/all...
    - beambot 3y ago
      1 in 3 U.S. Homebuyers Are Paying All Cash, the Highest Share in Nearly a Decade Just over one-third (34.1%) of U.S. home purchases in September were made in cash, up from 29.5% a year earlier and the highest share in nearly a decade. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. https://www.businesswire.com/news/home/20231108812516/en/1-in-3-U.S.-Homebuyers-Are-Paying-All-Cash-the-Highest-Share-in-Nearly-a-Decade https://www.businesswire.com/news/home/20231108812516/en/1-i...
belter 3y ago
You could say he graduated to Banking. "Why didn’t any Wall Street CEOs go to jail after the financial crisis?" - https://features.marketplace.org/why-no-ceo-went-jail-after-financial-crisis/#audio-title https://features.marketplace.org/why-no-ceo-went-jail-after-...
Waterluvian 3y ago
He likely paid interest on the money too. That interest is part of what he stole.
deleted 3y ago
[deleted]

thinkingemote 3y ago

This got me confused. Says he "repaid the proceeds of his scam to cover the city’s insurers". Does that mean it was lower than the amount stolen and just the amount the city paid the insurance? So he paid the premium but not the total amount covered? edits: another source says he settled with the insurance company which implies its less than the total amount.

toogan 3y ago
Typically when you have damages and are insured, then the insurance pays you and then goes after the original claim to get their money back. That is, the party that had the original damage leaves the claim to the insurance which then deals with getting the money back from the perpetrator while the original victim already got their money from the insurance. This also moves the risk of the perpetrator not being able to pay the damage. Now the victim does not carry that risk anymore. The insurance does. Which is their value proposition.

mrtksn 3y ago

That's actually pretty common criminal activity in banking, where an employee will take money from accounts of clients and "gamble" it on high-return short term investments. Obviously I won't be naming Banks here but what usually happens is: 1) If they succeed in their investment they put the money back and walk out rich. Their venture can be detected during an audit some time later but if there's no money missing the worst that will happen is that they will be fired because banks are very sensitive on their reputation and they don't want people to hear that its possible for a such thing to happen. They also don't want the insurance and other regulatory bodies to hear about this. 2) If they are caught before returning the money(this could be audit, customer complaint or a whistleblower) they will be given the option to return the money and get fired. If they can't return the money, then a formal investigation and criminal case is initiated. 3) If they lose their investment, they will flee and trigger an audit. They won't be able to resign and leave gracefully because the process of using this money involves periodically putting it back at strategic times to avoid trigger an audit due to discrepancies, therefore it's very risky to keep coming back to work if you don't have the ability to put the money back at short notice. This is one of the reason for people in banking having mandatory 2 weeks time off at a time in many jurisdictions. Stealing needs maintenance and maintenance needs access. I also wouldn't call it "repay his debt to society" because due to money that he stole, he made the public transport more expensive and housing less affordable.

deleted 3y ago
[deleted]
nicgrev103 3y ago
Isn't this literally what banks do? Take peoples deposits paying a minimal interest rate and then invest that money to earn a return higher than the interest rate they pay the customer (they actually will also borrow more money on the back of your deposit). So, when it's the bank doing it it's ok but a bank employee doing it independently for personal gain it's an issue. The book deal aspect was interesting also. So, the guy profits and has a potentially lucrative book deal with minimal jail time.
- mrtksn 3y ago
  Yes but banks do it within a legal framework that moderates the risk(at least in theory) and people know what they are signing into and what are their guarantees. You don't see too many banks collapsing, don't you? When it happens, its a big deal like with the SVB earlier last year. It's also what Sam Bankman-Fried and others did in exchanges that acted as unregulated banks. The system is not perfect and there are many scandals but if you compare it to what happens in crypto exchanges, its a day and night difference. Running a machine as intended and screwing up is different from pretending doing one thing and actually doing something else and screwing up. This is also why bankers and fund managers don't usually go to jail when they lose clients money. It's not illegal to suck at your job as long as you follow the rules.
  - lotsofpulp 3y ago
    >You don't see too many banks collapsing, don't you? When it happens, its a big deal like with the SVB earlier last year. "Moderating risk" = depending on the US federal government bail you out? There really is no need for the charade of banks now that electronic databases are very solid technology. Their whole role in transmitting and keeping an account of money is surely reproducible by the federal government at very little cost (maybe even lower cost due to not needing FDIC and all that infrastructure) without having to pay a middleman.

samirillian 3y ago

Yeah, I mean, real estate in BC (where he bought one of his properties) is notoriously corrupt, and lucrative. Most real estate bought in BC is paid in cash, often by some dizzying maze of LLCs or whatever the Canadian equivalent is. Essentially money laundering and investment rolled into one.

sbarre 3y ago
> Most real estate bought in BC is paid in cash, often by some dizzying maze of LLCs or whatever the Canadian equivalent is. This is provably false. It's not "most" real estate, it has only recently approached 30% or so, and only in hot markets like Vancouver and Victoria. There's a money laundering problem in Canadian real estate for sure, but let's try to be reasonably accurate in our statements, shall we?
- margalabargala 3y ago
  Holy cow. 5% would be high. 30% is dizzying. You're saying that if I pick a random recently sold BC property, there's a one in three chance it's bought with cash? That's not a money laundering problem, that's a money laundering infestation.
  - sbarre 3y ago
    Again, not across all of BC, but in hot markets like parts of Vancouver and Victoria.. It sounds high but it seems to be normal enough? I found this with some quick Googling: https://www.thestreet.com/housing/a-surprising-number-of-homes-are-bought-for-cash https://www.thestreet.com/housing/a-surprising-number-of-hom... https://www.washingtonpost.com/business/interactive/2023/all-cash-buyers-housing-market/ https://www.washingtonpost.com/business/interactive/2023/all...
  - beambot 3y ago
    1 in 3 U.S. Homebuyers Are Paying All Cash, the Highest Share in Nearly a Decade Just over one-third (34.1%) of U.S. home purchases in September were made in cash, up from 29.5% a year earlier and the highest share in nearly a decade. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. https://www.businesswire.com/news/home/20231108812516/en/1-in-3-U.S.-Homebuyers-Are-Paying-All-Cash-the-Highest-Share-in-Nearly-a-Decade https://www.businesswire.com/news/home/20231108812516/en/1-i...

belter 3y ago

You could say he graduated to Banking. "Why didn’t any Wall Street CEOs go to jail after the financial crisis?" - https://features.marketplace.org/why-no-ceo-went-jail-after-financial-crisis/#audio-title https://features.marketplace.org/why-no-ceo-went-jail-after-...

Waterluvian 3y ago

He likely paid interest on the money too. That interest is part of what he stole.

deleted 3y ago

[deleted]