FW lawyers and other professionals - Petition to assist FW members suffering from retailer lawsuit

corporateclaw said:   mikef07 said:   schop said:   mikef07 said:   

The problem is if they catch a person who robs 8 houses (can't prove it on the the 8), but then catch him on the 9th then he just uses the proceeds from the 8 to pay what fines and restitution for the 9th. ANother situation would be to run multiple scams. If you get rich of 3 or 4, but get caught on the 5th who cares. You got the money now.



Life is messy. If 1-8 aren't proven they didn't happen. Otherwise if you are caught speeding they can assume you've been speeding since 16, for a total fine of...infinity dollars.

Legally yes, but they happened. The point is if there is no jail as a deterrent and only fines and community service many would be willing to take more chances. Using ill gotten gains to pay off things when you get caught isn't that bad of a gig, thus the point of jail.

Rob a bank for $100K x 8 times, get caught on the 9th. Oh well pay the $100K back, maybe a $100K fine, some community service. It was worth it. Might as well keep robbing banks. Very simple example, but you get the point.

Jesus Christ, what?
Somebody is full of irrelevant analogies. Are analogies used in court?

ChaseDestructor said:   corporateclaw said:   mikef07 said:   schop said:   mikef07 said:   

The problem is if they catch a person who robs 8 houses (can't prove it on the the 8), but then catch him on the 9th then he just uses the proceeds from the 8 to pay what fines and restitution for the 9th. ANother situation would be to run multiple scams. If you get rich of 3 or 4, but get caught on the 5th who cares. You got the money now.



Life is messy. If 1-8 aren't proven they didn't happen. Otherwise if you are caught speeding they can assume you've been speeding since 16, for a total fine of...infinity dollars.

Legally yes, but they happened. The point is if there is no jail as a deterrent and only fines and community service many would be willing to take more chances. Using ill gotten gains to pay off things when you get caught isn't that bad of a gig, thus the point of jail.

Rob a bank for $100K x 8 times, get caught on the 9th. Oh well pay the $100K back, maybe a $100K fine, some community service. It was worth it. Might as well keep robbing banks. Very simple example, but you get the point.

Jesus Christ, what?
Somebody is full of irrelevant analogies. Are analogies used in court?

Actually yeah all the time.

I have been in court many times and have heard analogies. I suggest you go listen to opening and closing arguments. I suggest you listen to a cross examination.

He treated her like a pet...

It was as if she were his property...

He beat her like a punching bag...

Stuff like this is said all the time in court.

bgur said:   ChaseDestructor said:   
Somebody is full of irrelevant analogies. Are analogies used in court?

Year, they call them precedents.
Precedents are set by outcomes (such as the Chius railroading). Not analogies.

Is this board populated by pre-law freshmen?

The recent Supreme Court health care debate was full of analogies, such as mandating that all Americans eat broccoli to promote interstate commerce.

RonK said:   In other words, the act of placing the order (knowing their motivations and knowing they knew the order would be rejected) constituted the deceit.So, if Nordstrom had shipped out the items, the brothers then obtained full refunds but CashBack remained, then it's not a crime? Why not? All that this changes is that their methodology is slightly altered but they are still taking advantage of the same exact computer glitch.

Again, there is nothing ambiguous about it and scale of the operation really serves to underscore the intent to get something for nothing at Nordstrom's expense.I don't think that there is any doubt that the brothers fully intended to profit from the CashBack and had no interest in the merchandise. The issue is whether their underlying action a crime. If the underlying action isn't a crime, then your intent to fully engage in it doesn't turn it into a crime either.

mikef07 said:   
CARE TO RECANT COUNSELOR?

Buy the book. Ironically the title says the opposite of what you did.
Legal Reason: The Use of Analogy in Legal Argument said: ] Legal Reason describes and explains the process of analogical reasoning, which is the distinctive feature of legal argument. It challenges the prevailing view, urged by Edward Levi, Cass Sunstein, Richard Posner and others, which regards analogical reasoning as logically flawed or as a defective form of deductive reasoning.

monarch20 said:   ananthar said:   
I don't see how the any fraud can be alleged anywhere. In theory the CC companies can allege that cardholders got a cash-advance disguised as a purchase but it is up to them to decide what is a cash advance and deny rewards/points accordingly. Furthermore, if the CC account never defaulted the CC company suffered no harm as a result of the disguised cash-advance.

This is the same situation the Chui's are being charged with fraud. The CC companies are making a mistake of categorizing it as a purchase instead of a cash advance and we are exploiting that. If you bought from the mint with the intent of buying coins use/collection, then its not fraud. Once you start buying with the intent to exploit the credit card issuer's mistake it becomes fraud. Do it once, its okay.. Do it more with a different intent, its fraud..

The big difference is that the CC issuer suffers no actual economic damage from the misclassification of the cash advance as a purchase, since the Mint actually paid the CC fee normally associated with a purchase (and normally absent from cash advances) meaning that the CC issuer is still making money. This alone eliminates any criminal claims that involve the "taking of property". The fact that the CC issuer could have made even more money and were tricked into making less money is not a crime under the law, otherwise most buisness transactions in which the seller makes a big profit without disclosing to the buyer that they could buy the same item for less (eg by using a coupon code) would be criminal.

The other big difference is that in Chius case there was an absence of any "consideration" in the transaction. Generally a buisness tranactions in which both parties receive something of value (even if the value is greatly divergent) cannot be considered a criminal act (absent of actual fraud/misrepresentation), even if one party tricked the other into making a poor exchange (with advertising) or took advantage of a sale price that is obviously a pricing error.

The reason CC issuers would like to classify cash equivalent purchases as cash-advances is to avoid under-cutting their cash advance fee buisness. But there is nothing in the credit card agreement that says I may not indirectly get a cash advance by buying something with the CC and then turning the item I purchased into cash. All the credit card agreement says is that the CC issuers reserves the right to classify a purchase of certain defined cash-equivalents as a cash-advances and collect a cash advance fee inaddition to the purchase fee. In fact it is probably illegal for a CC issuer to arbitrarily classify purchases as cash-advances without disclosing in advance precisely what kinds of purchases can be re-classified in this manner. It is doubtfull if they even could define it in a way that would depend on what the purchaser subsequently did with the purchased item (rather than being based simply on the type of item purchased). Finally if the CC issuer does not re-classify the purchase as a cash-advance within the billing cycle, it is probably illegal for them to do so at any point thereafter. Even if they had a right to classify the purchase as a cash-advance under the credit card disclosure, the disclosure is always phrased as the CC issuer "may re-classified as a cash-advance", so there is not even a civil claim that the CC issuer can raise if they fail to re-classify a transaction as a cash-advance within the billing cycle. On the other hand the card holder may have a civil case against the CC issuer if a purchase is in-correctly classified as a cash-advance.

RonK said:   I think it is you who doesn't understand intent. One doesn't have to know what they are doing is a crime to have criminal intent; or, in other words, ignorance of the law is not a defense.This statement is too broad to be accurate. Ignorance of the law can actually be a compelling defense -- it all depends on the type of crime with which you are charged. There are a number of offenses out there that you can only be convicted of if your conduct is intentional, willful and, many cases, reckless. It is true that willful blindness won't be a defense to such a charge, but if a person is genuinely ignorant that the underlying act is a crime and the offense is predicated on the conduct being intentional, willful or reckless, then ignorance of the law would, in fact, be a compelling defense.

This doesn't necessarily mean that the person would get to walk away, as there could be other offenses that he/she would be guilty of that are not predicated on intentional, willful or reckless conduct. Nevertheless, a broad statement that "ignorance of the law is not a defense" is not universally accurate.

geo123 said:   RonK said:   I think it is you who doesn't understand intent. One doesn't have to know what they are doing is a crime to have criminal intent; or, in other words, ignorance of the law is not a defense.This statement is too broad to be accurate. Ignorance of the law can actually be a compelling defense -- it all depends on the type of crime with which you are charged. There are a number of offenses out there that you can only be convicted of if your conduct is intentional, willful and, many cases, reckless. It is true that willful blindness won't be a defense to such a charge, but if a person is genuinely ignorant that the underlying act is a crime and the offense is predicated on the conduct being intentional, willful or reckless, then ignorance of the law would, in fact, be a compelling defense.

This doesn't necessarily mean that the person would get to walk away, as there could be other offenses that he/she would be guilty of that are not predicated on intentional, willful or reckless conduct. Nevertheless, a broad statement that "ignorance of the law is not a defense" is not universally accurate.

That is a good point, but it applies in most instances. Almost nothing in the world is 100%, but using "I didn't know that was illegal." ain't gonna work very much. Not to mention if you use this defense you better be real sure you never said a word to anybody or sent an email that contradicts that.

Even in a traffic example one could say "I did not know the sped limit was 35mph" and if there was no sign stating as much then ignorance of the law would be a solid defense.

Intent is where I think these brothers got screwed. It is my opinion they had intent to rip off Nordstrom. One does not need to be a lawyer to form an opinion on what they think the brothers intended to do.

mikef07 said:   ChaseDestructor said:   Used in court by folks with and for feeble minds.

You mean like a jury?

So basically your post that analogies are not used in court was WRONG??

BTW I am willing to gather that a professor at Harvard Law knows and is smarter about law that you. I could be wrong, but I doubt it.
Possibly. I'd take an IQ test against him.

And yes, you are right, analogies are used in court. By simpletons.

mikef07 said:   geo123 said:   RonK said:   I think it is you who doesn't understand intent. One doesn't have to know what they are doing is a crime to have criminal intent; or, in other words, ignorance of the law is not a defense.This statement is too broad to be accurate. Ignorance of the law can actually be a compelling defense -- it all depends on the type of crime with which you are charged. There are a number of offenses out there that you can only be convicted of if your conduct is intentional, willful and, many cases, reckless. It is true that willful blindness won't be a defense to such a charge, but if a person is genuinely ignorant that the underlying act is a crime and the offense is predicated on the conduct being intentional, willful or reckless, then ignorance of the law would, in fact, be a compelling defense.

This doesn't necessarily mean that the person would get to walk away, as there could be other offenses that he/she would be guilty of that are not predicated on intentional, willful or reckless conduct. Nevertheless, a broad statement that "ignorance of the law is not a defense" is not universally accurate.

That is a good point, but it applies in most instances. Almost nothing in the world is 100%, but using "I didn't know that was illegal." ain't gonna work very much. Not to mention if you use this defense you better be real sure you never said a word to anybody or sent an email that contradicts that.

"I didn't know [it] was illegal" is never going to work and ignorance of the law is never a defense, let alone a "compelling defense." Criminal intent (known as mens rea), is an element of certain crimes, and as such, must be proven to sustain a conviction for that crime. However, there is a difference between not having the specific intent to commit one or more of the underlying acts and being ignorant of the law that could render those acts criminal. Fraud, for instance, requires an intent to deceive; it doesn't require knowledge of the fraud statute or that a particular act or acts constitutes fraud. First-degree murder requires a specific intent to kill along with pre-meditation. There are cases of so-called "honor killings" that occur in the United States amongst tribal immigrants who may have no knowledge of U.S. law and believe the murder was permitted and justified under their native laws. This lack of knowledge as to the actual law would have no bearing on the criminal outcome of such a case.

RonK said:   "I didn't know [it] was illegal" is never going to work and ignorance of the law is never a defense, let alone a "compelling defense." Criminal intent (known as mens rea), is an element of certain crimes, and as such, must be proven to sustain a conviction for that crime. However, there is a difference between not having the specific intent to commit one or more of the underlying acts and being ignorant of the law that could render those acts criminal. Fraud, for instance, requires an intent to deceive; it doesn't require knowledge of the fraud statute or that a particular act or acts constitutes fraud.We are saying the same thing here but are phrasing it differently. Ignorance of the law can be a compelling defense because if you genuinely don't know that something is illegal, you often can't form an intent to commit the crime, which can be an element of the offense.

Cash structuring, for instance, is illegal if you structure your cash deposits to intentionally avoid reporting requirements. If, however, you are not willfully blind to the reporting requirement, are genuinely ignorant of it and are depositing cash amounts just under the reporting limits for reasons that have nothing to do with structuring efforts, then you aren't guilty of structuring. You obviously have no criminal intent and one of the reasons that you can't have such an intent here is because you are not aware of the existence of the structuring statute, so you have no reason to intend to circumvent the reporting requirements under a statute that you don't know exists.

geo123 said:   RonK said:   geo123 said:   RonK said:   In other words, the act of placing the order (knowing their motivations and knowing they knew the order would be rejected) constituted the deceit.So, if Nordstrom had shipped out the items, the brothers then obtained full refunds but CashBack remained, then it's not a crime? Why not? All that this changes is that their methodology is slightly altered but they are still taking advantage of the same exact computer glitch.

Again, there is nothing ambiguous about it and scale of the operation really serves to underscore the intent to get something for nothing at Nordstrom's expense.I don't think that there is any doubt that the brothers fully intended to profit from the CashBack and had no interest in the merchandise. The issue is, is their underlying action a crime. If the underlying action isn't a crime, then your intent to fully engage in it doesn't turn it into a crime either.

If the intent is the same-- that is, to obtain the CashBack benefit given to purchasers, by virtue of engaging in conduct that is not (and not intended to be) a purchase but which will knowingly result in a mistaken payment of CashBack as if there was a purchase-- then it is a crime regardless of the order going through or not.I agree. The issue is, if it would've been a crime regardless of whether the brothers had been banned by Nordstrom and regardless of whether the orders had shipped out, then the brothers' knowledge that "the order would be rejected" is not an element of the offense, correct?

By the way, what is the specific difference between this situation and the Mint situation? As I previously posted, I never did the Mint deal and never even tried but thousands if not tens of thousands of people on Fatwallet and FlyerTalk did. If you adopt the government's argument used in this case, people here exploited credit card issuers' failure to catch and recognize the cash advance nature of the charges and paid out CashBack on phantom purchases (purchases that did not result in the customers obtaining any tangible goods or services), in a way that's analogous to Nordstrom not realizing that they were paying out CashBack on phantom orders.

Yet, I think that most people (including those of us who, like me, never did the Mint deal and don't have a dog in the Mint discussion either) out there would say that the Mint deal is not even close to being fraudulent, at least in the criminal sense. What is the exact distinction?

The point about Nordstrom rejecting the orders and the Chius knowing this is not an "element" of the crime. However, it is probative to proving deceitful intent because the Government would argue there was no legitimate purpose to the placing of the orders but to take advantage of the CashBack mistake.

As regarding the transactions with the U.S. Mint, I really don't see any similarity because there is nothing to indicate that credit card issuers (and there are many) were knowingly making a mistake in treating U.S. Mint purchases as "regular" purchases instead of something else. Obviously, the card issuers knew the charges were coming from the U.S. Mint which more than likely meant some type of coin purchase (being collectibles or otherwise). The cardholder agreement permitted the card issuer to treat certain purchases as "cash equivalents" (and presumably, not grant rewards for them) if it so chose, but if the issuer didn't elect to do this then it could hardly be said to be a known mistake of the issuer or a deceitful representation on the part of the cardholder. Also, I am not sure why you would refer coin purchases as "Phantom Purchases" since they appear to me to be "purchases" in every sense of the word, including fees paid to the card issuer by the merchant.

mikef07 said:   Let me know when your billing rate hits $1000/hr.
Intelligence is measured by how much you bill by the hour?

Nikola Tesla declared bankruptcy and died penniless. Quite sure he was smarter than everyone you know and your harvard buddy that likes analogies.

ChaseDestructor said:   mikef07 said:   Let me know when your billing rate hits $1000/hr.
Intelligence is measured by how much you bill by the hour?

Nikola Tesla declared bankruptcy and died penniless. Quite sure he was smarter than everyone you know and your harvard buddy that likes analogies.

Good point, but a non lawyer should not know more about what goes on in court than a lawyer. I'll definitely take the word of the lawyer I know (who both uses analogies and says they are used )over you. As for his competence level as a lawyer his billing rate speaks for itself.

Thank you also to Geo and RonK over the last few posts. It makes for an interesting read to understand how ignorance of a law can and does work.

geo123 said:   ]Nordstrom is arguing that the brothers took advantage of a vulnerability of its computer system, which failed to realize that no real goods or services had been purchased and still awarded CashBack. Why can't credit card companies make the same exact argument that cardholders took advantage of a vulnerability of its computer system, which failed to realize that no real goods or services had been purchased (and that, instead, cardholders were obtaining cash advances) in the Mint situation and still awarded the CashBack.

I don't think Nordstroms is arguing that, but the government is. They (by charging them) are saying that there was intent to defraud Nordstrom and that while there was a vulnerability the brothers crossed that line (as far as the law goes) and schemed Nordstrom out of money and that a reasonable individual (rational) would know that they were not entitled to this money.

geo123 said:   RonK said:   Again (and respectfully), I believe you are confusing ignorance/knowledge of the criminal law, itself, with the intent requirement contained in a given law. I have never said that not knowing something can't form the basis of a defense. Rather, it is the notion of being ignorant of the law with which you are being charged as somehow being a defense to that charge with which I take issue. In your example, you are correct that someone would need to know of the financial reporting laws in order to possess the specific criminal intent to be guilty of structuring. However, being ignorant of the crime of structuring (if you knew about the reporting requirements) is not a defense to a charge of structuring.Just as respectfully, I think that we are saying that exact same thing here. In my example, if you don't know about the reporting requirement, you cannot form the requisite intent required to be guilty of structuring.

But that is ignorance of some other law, not the crime being charged. If you were to say that in some instances ignorance of certain laws can be used to show the absence of intent required for a defense to some other crime, that would be an accurate statement. If you don't know the reporting requirement you can still be guilty of not reporting. If you don't know that avoiding the reporting requirement is a crime, you can still be guilt of structuring. Applying that premise to this case, the Chius didn't have to know what they were doing constituted a crime to be guilty of committing said crime.

RonK said:    Applying that premise to this case, the Chius didn't have to know what they were doing constituted a crime to be guilty of committing said crime.


That is how it has been explained to me and I hope this comes across as I mean it to:

The Chius would have to prove that they did not know what they were doing as in not knowing they were doing this to get Cash Back.
The government would only have to prove that they knew what they were doing (intent) and that the sole purpose of the orders was to not get charged, not receive merchandise. Even though the Chius could say "yeah we knew what we were doing (as in we knew we would not get charged and we knew merchandise would not ship), but did not think it was against the law" they would still be held liable. That is where ignorance of the law would not come into play.

geo123 said:   mikef07 said:   I don't think Nordstroms is arguing that, but the government is. They (by charging them) are saying that there was intent to defraud Nordstrom and that while there was a vulnerability the brothers crossed that line (as far as the law goes) and schemed Nordstrom out of money and that a reasonable individual (rational) would know that they were not entitled to this money.I understand what the government is arguing or at least I think that I do. I think that the issue here is that it is not entirely clear what it is that the government considers to be a prosecutable offense. As I have previously pointed out, for instance, without there being more to the "lost articles" issue, I am not sure that I am seeing much of a distinction between what the brothers did (at least based on the limited facts that we now know) and the Mint situation. Hence, if you cannot tell with certainty where the line is, how do you know that you haven't inadvertently crossed it?

In general, when it comes to criminal prosecutions, I have a problem with prosecutions based on novel legal grounds. A primary goal of criminal laws is to deter certain types of conduct. If the scope of conduct that we deem to be unlawful is imprecise, then the laws either deter too much conduct, including conduct that is perfectly legal, which is not in our country's interests, or too little, which means that the laws aren't serving their purpose. Again, based on the limited facts that we know here, unless there is more to the "lost" merchandise issue, the criminal charge against the brothers seems to be based on a dangerously broad use of the term "fraud."

As I mentioned above, while I've never done any of the things that the brothers did and also never did the Mint deal, this discussion is largely academic to me but I have no doubt that there are plenty of people reading this to whom the discussion is anything but theoretical. Many of them thought that they knew where the line was that they couldn't cross, only to suddenly find out that the government may end up disagreeing with them without providing much guidance on the distinction.

P.S.
For the record, I never did the Mint deal for reasons that had nothing to do with any concerns that there was something fraudulent about it (I can't come up with anything fraudulent about it). It was just too much trouble for me, as I didn't want to have a ton of coins stored at the house, etc...

As for the mint I guess I don't know so I won't pretend to.

mikef07 said:   Even though the Chius could say "yeah we knew what we were doing (as in we knew we would not get charged and we knew merchandise would not ship), but did not think it was against the law" they would still be held liable. That is where ignorance of the law would not come into play.This is correct and I think that we all agree with that. I think that what the disagreement is about is whether their underlying act actually amounted to a crime (as opposed to a potential civil offense proving which, by the way, I don't think would've been a slam dunk).

As I previously mentioned, although I've never done anything like this myself and, therefore, do not have a dog in this fight, the criminal prosecution here surprises me, although perhaps it is true that the brothers' prior history of "losing" multiple online orders in combination with earning CashBack on cancelled items (which, in and of itself, in my humble opinion does not seem sufficient to sustain a criminal charge) had something to do with it. I think that there are grounds for a civil suit (which doesn't seem like it would be a slam dunk) but, unless there is more to "losing" online orders, criminal prosecution seems like a big stretch.

In all fairness to the government's case, however, we certainly don't know anything about their past, which could've been a been factor in both the prosecution and the plea deal. If, for instance, they both have prior convictions for something like credit card fraud in the course of which they were stealing CC numbers, then both the prosecution and the plea deal don't seem nearly as unreasonable.

As for the mint I guess I don't know so I won't pretend to.Well, this is the elephant in the room. If another Mint deal comes along, what does this case tell us about where the line is that they can't cross? If we can't identify specific differences between the two, then how do we know where that line is?

ChaseDestructor said:   geo123 said:   As for the mint I guess I don't know so I won't pretend to.Well, this is the elephant in the room. If another Mint deal comes along, what does this case tell us about where the line is that they can't cross? If we can't identify specific differences between the two, then how do we know where that line is?
Therein lies the problem. Nobody is going to risk "churning" anymore if it means ending up (pun intended) in prison having your sphincter violated.Club Fed is not all that scary.