Ethics Quiz: The Bank, the Addict, and the Broken Egg

There was a little software problem when Bank of America acquired LaSalle Bank and the two were transferring account data. As a result, LaSalle depositor Ronald Page found that he could make unlimited ATM cash overdraft withdrawals, even though he had only $300 in his checking account.  This tempting state of affairs lasted for seventeen days, and then from December 1, 2008 to May 31, 2009, Page gambled like a man on fire.  Unfortunately for Page and Bank of America—but fortunately for several casinos—Page is a gambling addict. He withdrew, and gambled away, $1,543,104.00

Now the U.S. Attorney’s Office in Detroit says he is seeking to send him to jail for 15 months  after he pleaded guilty to charges of theft of bank funds. He is also going to be required to pay back the money, with interest, guaranteeing poverty for life.

Your Ethics Alarms Ethics Quiz question:

Is this fair?

I don’t think so.

I think he was a victim. In a normal situation, with a normal individual, I would conclude that he simply took advantage of a vulnerable source of cash, and engaged in voluntary and inexcusable theft. He knew that money wasn’t his. He had to know it was a mistake. His proper course was to alert the bank.

But Ronald is not a normal person. He is an addict, and has no impulse control when gambling is available to him. Presenting a gambling addict with a no-limits checking account is like filling an alcoholics swimming pool with vodka. Ronald Page didn’t have a chance. Before this episode, he had no criminal record. Almost any gambling addict could be converted into a felon by a mistake like Bank of America’s.

In tort law, the rule is that “you take your victim as you find him.” That means that the tortfeaser derives no sympathy from the law because a particular victim of negligence was unusually vulnerable. There are a line of cases called “eggshell skull cases”, where someone engaged in minor battery–thumping someone on the head without permission—and the victim’s skull collapsed, because it was uncommonly thin. “Too bad,” says the law. “You had no right to hit him, and you’re responsible for the results.” It was Bank of America’s negligence that caused this tragedy, because it presented a temptation to an otherwise law-abiding citizen which his illness made him unable to resist. Sending him to prison is unjust.

I’d suspend the sentence providing he gets treatment for his addiction and stays out of trouble for a few years. Meanwhile, Bank of America should swallow the loss. This was an eggshell bank account.

What do you think?

_____________________________________

Pointer: James Taranto

Facts: Yahoo!

Graphic: Kingdom Entrepreneur

Ethics Alarms attempts to give proper attribution and credit to all sources of facts, analysis and other assistance that go into its blog posts. If you are aware of one I missed, or believe your own work was used in any way without proper attribution, please contact me, Jack Marshall, at  jamproethics@verizon.net.

26 thoughts on “Ethics Quiz: The Bank, the Addict, and the Broken Egg

  1. That is indeed a tough one, Jack.. I’m well acquainnted with addiction (was addicted to alcohol, kicked it 31 years ago with AA help; kicked nicotine addiction 28 years ago by applying same AA techniques).

    The bank “presented” the opportunity to the addict. But it did not know he was an addict, nd dkd not know it was “presenting”.

    Is a pzzlemet.

    • “Is a puzzlement.” — from “The King and I”. Jack, the reply space does not allow viewing of replies and correcting typos before hitting “Enter”. Space is too small.

    • He is no victim. Addict or not, he is just as responsible as anyone else for his choices. He chose to withdraw money that he knew was not his. Personal responsibility and the ability to know right from wrong does not fly out the window because someone is an addict. That is irresponsible thinking and it is illogical. This man, and other addicts should not get a pass because they have a made up disease. And please rethink the bit about sending him to treatment in lieu of making him pay back the funds he knowingly stole. How on earth could sending the man to GA be ethical? Like all of the other xA groups, Gamblers Anonymous is based on the 12 steps of AA and the 12 steps of AA are undeniably based on religion/God. So, we should send him to church? No way.
      As far as filling an alcoholic’s swimming pool with vodka…go ahead and fill mine up with booze. I won’t drink it, even though I’m an alcoholic. I have the ability to make my own choices, take responsibility for my actions, and do the right thing. I am not a victim and neither is this man. What he did was unethical.

      • I stopped reading at “made up disease.” That’s an ignorant and false statement. Addiction is a real physical and mental disorder, and denying it is like denying that the Earth is round. Try to keep up.

        • The statement is neither ignorant nor false. The disease theory of addiction has not been proven. It is only a theory. No need to be insulting with the “try to keep up” comment. I can keep up just fine. Perhaps what is ignorant is stopping reading because you see something that you don’t like.

  2. Well, one thing in favor of putting him in jail: it keeps him out of the casinos.

    I agree that Bank of America is partially at fault here, but not because Page is a gambling addict; BoA is partially responsible because of the incompetence of allowing these withdrawals to continue for seventeen days and tally up over 1.5 million before shutting it down.

    But I reject the notion that Page is a victim. He had a duty to report the problem and return the money immediately–as would any of us–and his status as a gambler doesn’t exempt him from that.

    Since when does some sort of “victim status” exempt someone from any sort of responsibility? Your take on this situation comes dangerously close to 24: The Coercion Myth along with a touch of 17: Hamm’s Excuse.

    –Dwayne

    (Full disclosure: I’m a Bank of America customer, so the idea that “Bank of America should swallow the loss” equates in my mind to “Dwayne has to pay for it”–and I am most definitely not at fault here.)

    • Gsmblers Anonymous (GA) does not accord the members “victim status”. It definitely teaches responsibility, accountability, and accepting the consequences of one’s behavior. No, I’m not a GA member. (I, too, have been a B of A customer for 25 years.)

  3. Thanks, Jack. The 8th & 9th Steps of Gamblers Anonymous (GA) echo those of AA (no, I’ve never been a gambler). The compulsive gambler seeking recovery must make amends to all persons harmed, wherever possible, except when to do so would harm them or others. I don’t think it’s possible for this guy to repay the bank well over a million $$$. But he definitely needs mental health treatment. Compulsive gambling does fit the classic defition of insanity — repeating the same behav iors over and over and expecting different results.

  4. In tort law, the rule is that “you take your victim as you find him.” That means that the tortfeaser derives no sympathy from the law because a particular victim of negligence was unusually vulnerable.

    There are limits to this principle, and one of these limits is assumption of risk.

    One example is a dude standing on top of a car traveling at about 50 MPH. If the dude is thrown off the car because of a collision, no driver (except the driver of the vehicle on which the dude was standing) would be liable, even if the collision was the fault of the driver of the other vehicle.

    Apply this principle to this situation and…

    • Right. But I see no assumption of the risk. Imagine that he careful monitors his access to cash because of this problem, and BANG! He has a blank check. He never voluntarily accepts anything. I ask alcoholics why they bought liquor knowing what would happen, and they just say, “I don’t know.” there’s not much volitional about it.

  5. I don’t agree. His gambling addiction may excuse him from losing the one and a half million dollars, but it doesn’t excuse him from taking it in the first place.

    He has no impulse control when gambling is available? I don’t think that applies to when he’s standing before his ATM. Perhaps if a three card monte dealer had set up shop right beside Bank of America, then Page would be a victim through-and-through, but as it is, taking the money and gambling it were two separate acts. He has to be accountable for the first one, considering that he knew that all he had to do to avoid feeding his addiction was inform someone of the error.

    If gambling was available when he took the money, when is gambling not available? Even if he was barred from all the casinos and racetracks, he could still start betting with people about when the traffic light was going to change, or some such. But whatever the context of the gambling, it’s quite different from the context in which he acquired the money.

  6. Adding “interest” to the judgment seems excessive to me. The lost “interest” should be BofA’s immediate penalty for poor diligence. The principal amount should remain attached to the individual in case he accidentally wins a lottery somewhere down the road. However, save for that rare occurrence, the money is gone. The guy shouldn’t be held in poverty to attempt to pay back the principal, I hope his future wages are only “symbolically” garnished.

  7. Prosecute him. First, he knows how much he has in the account and how much is deposited each month. Second, he pulled out over $1.5mil, or in excess of $308K each month on average (I counted 6 months, not 7).

    His monthly bank statements should have shown something… if nothing else, absolutely no record of the cash withdrawals he was making. Most would think something was amiss; some would approach the bank with a question.

    Whether he blew the money in a casino or doubled it in the stock market makes no difference, although the latter might make recovering the loss less problematic.

    As to BofA’s culpability for not watching the store… well, if the money lost was recovered from the salary of the dunderhead who let this happen is one thing, dinging the stockholders who had no way of knowing what was going on is yet another. That part is the tough call. Disclaimer: I have no voluntary business dealing with BofA.

  8. BOA has a lot of problems it seems. Advice Goddess Amy Alkon had someone steal something like $13,000 out of her account (I can’t put my hand on the exact figure) by a woman with a fake driver’s license who looked nothing like Miss Alkon and whose signature was different. That and problems friends have had make me think they’re not really on the ball.

  9. Jack, I do volunteer work in prisons with people who have all sorts of substance abuse issues. In addition, I grew up in a family of alcoholics. I say that not to garner sympathy or whatever, but to establish credentials, however unofficial. Addicts know what they are doing, even while they are doing it, they know it. They know it when they are sober, and they know it when they’re drunk (alcoholics, gamblers, drug abusers, etc—they’re all drunks—not very PC, but brutally honest). They are human beings imbued with all that goes into being human and, as such, they command my compassion and concern. But. They know. Moreover, they can stop. Many do stop. But no one can make or compel them to stop. Sobriety might be enforced for a time, but they remain drunks. Until they decide otherwise. Then they’re not drunks. They stop because they have free will, just as they drank (or whatever) because they have free will. What we call addictions are, I am convinced, simply behaviors. Drunks are people with poor impulse control—most have the impulse control of a mousetrap—that’s all it is. Because they are so powerfully drawn to a particular something (alcohol, drugs, gambling, etc.) we assume that that particular something has something to do with it, and say that they are addicted to it, because they keep going back to it. Nah. It’s a means to an end. The point is, that doing something and not doing something are voluntary processes. Addiction? Phooey. Behaviors happen because we make them happen. So-called addicts are those who, for numerous and complex reasons, have a tough time making behaviors happen. Sadly some never do. For those willing to try, the rest of us can offer ideas, advice, encouragement, and support, but nothing will change until the light bulb goes on in their heads. Ronald Page had the same opportunities to do the right thing as everyone does. He elected not to, and it is right to hold him solely accountable. BOA made a big, serious, and sloppy mistake, but it was an honest mistake. The ethical breach was committed by Mr.Page.

  10. Ethics thought: what if Mr. Page, or lets say “Mr. Notsosmart, was just not smart enough to understand what was happening? And let’s say they pulled out money every day, because the ATM dispensed it, and spent it on everyday expenses. Criminal intent? Thoughts?

  11. “But Ronald is not a normal person. He is an addict, and has no impulse control when gambling is available to him. ”

    Gambling is always available. If he has no impulse control why didn’t he commit crimes the way drug addicts do?

    “Meanwhile, Bank of America should swallow the loss. ”

    As a taxpayer I say NO – I don’t want to pay for this.

    • Tell it to the ones whose negligence lost the money—Bank of America.
      (You don’t really think you’re getting it back from a guy who had $300 to his name and will be coming out of jail, do you?”

  12. He’s an adult and considered of sound mind. He withdrew money that he KNEW he didn’t have for the purposes of “gaming”. In doing so, he violated the bank’s trust and placed the burden for his “addiction” on the backs of his fellow depositors. Theft and fraud. He has no excuse. Prison.

    • Agreed, theft, fraud, probably prison, let the courts decide. Meanwhile, you put “addiction” into quote marks as if to deny that it could be. There are all kinds of addictions, alcohol, heroin, sex, Big Macs, cocaine, violence, judgmentalism, crystal meth, you name it. They can be mere habits, and sometimes devolve into compulsion. Medical science recognizes the reality of addiction. So please don’t deny the reality of addictions as if you were and expert — and unless you’ve been there. You’re not qualified.

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