$ 1.2 million bank error buys a house, and an arrest, official says

This was the type of windfall that investors penned for every rally on Wall Street: $ 1,205,619.56 in February, ending a 911 dispatcher’s brokerage account in Louisiana.

But the next day, when Charles Schwab tried to recover the money he had mistakenly deposited in Kelly Spadoni’s account, officials said, about a quarter of the money had already gone. For about a month, the company said, calls, emails and text messages to Ms. Spadoni went unanswered.

According to the Jefferson Parish Sheriff’s Office, the funds were transferred to another account and used by Ms. Spadoni to purchase a house and a Hyundai Genesis SUV. The Sheriff Office said he was arrested on April 7 on fraud and theft charges and fired as a dispatcher.

In a lawsuit filed in federal court in New Orleans against Ms. Spadoni, Charles Schwab said it was believed that only $ 82.56 was taken to Ms. Spadoni’s Fidelity Brokerage Services account, but a software glare caused it to be mistaken for seven. Had caused to move. Figure amount.

“I think most people understand how much money is in their bank accounts,” Sheriff Office spokesman Capt. Jason Rivarde said in an interview on Monday. “When you’re expecting $ 80 and you get $ 1.2 million, there’s probably something wrong there.”

According to officials, Harvey, La. Ms. Spadoni, 33, has been charged with bank fraud, illegal transmission of illegal funds and theft of more than $ 25,000. He was a dispatcher for four and a half years in the parish, outside of New Orleans.

Ms. Spadoni’s attorney, Bobby Edmonds, said in an interview Wednesday that he was still investigating various aspects of the case.

He said, “We will respond to the pleas that are on file in a timely manner and are ready to sort things out and are in the interests of my client.” ”

Ms. Spadoni was released on $ 150,000 bond on Thursday, according to Captain Rivarde, who said a vast majority of the missing money had been recovered.

A spokesman for Charles Schwab said in an email Sunday night that the company was fully cooperating with the authorities in an effort to resolve the issue, but declined to comment further.

The error requires the recipient of the wired cache to return it.

James j. Angel, An Associate Professor of Finance at Georgetown University’s McDonough School of Business said they were examples that typically involve a recipient who does not have a “natural claim” to wealth.

“In general, if it’s not yours, you’ve got to give it back,” he said, insisting that he was speaking in general, and not commenting on the Spadoni case in particular. . “Someone who is not expecting it, he has not requested it, and it suddenly shows up? It was clearly an error.”

But a major exception is the decision of a federal judge this year. In 2020, Citigroup mistakenly wired $ 900 million to a group of lenders who intended to make a small interest payment on behalf of beauty company Revlon, but instead paid them in full.

Some lenders, who sued Revlon and Citi for repaying the loan, refused to return nearly $ 500 million. In February, Judge Jesse M. of the US District Court in Manhattan. Furman ruled that the recipient Did not return cash Because they believed that the payment was made intentionally.

Dr. “The Citigroup case is definitely an outlier because they had a previous claim on the money,” said Angel.

Columbia Law School Professor John C. Coffee Jr. said that whoever gets the money has a legal obligation to try to restore it.

“Even if Schwab was negligent, that did not give him rights over the property he got,” he said. ‚ÄúThese cases come up every now and then. Bank delivery truck cars crash, and money comes after them, and the police and others want you to give it back. “

According to Schwab, Ms. Spadoni opened a brokerage account in January, and the additional cash was added to the transfer request made in February.

Realizing the mistake, Schwab tried to retrieve the money through a computer system, but got a message that said “cash is not available,” the lawsuit said. A second attempt was also rejected, and Schwab received a message stating: “Inadequate funding, work directly with the customer for a solution.”

An employee of Schwab called Ms. Spadoni four times, but was unable to leave a message during two of those attempts because her answering machine was full, the lawsuit said. A corporate attorney for Schwab then called Ms. Spadoni to the sheriff’s office, but was told he was unavailable, according to the lawsuit, which she then sent several text messages to.

In her lawsuit, Schwab said she had begun an arbitration proceeding against Ms. Spadoni with the Financial Industry Regulatory Authority, but it would take two months to resolve the case. The company said it filed the lawsuit because it wanted to ensure that Ms. Spadoni did not spend the money transferred accidentally before the arbitration hearing.

“When you take something that is clearly not yours,” said Captain Reward, “it will be theft.”

Christine Hauser contributed reporting and Kitty Bennett contributed research.

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