Get rich quick, repent at leisure?

September 3, 2008 9:24 AM

Is it possible to take out huge sums of money as cash advances and then flee the country? Don't worry, I have zero interest in actually doing this, but I was talking to a friend who claimed that one could apply for a bunch of credit cards at once, max them all out, and then skip out to Thailand or somewhere and live off the $150,000 or however much you got. Is this true? And if so, why aren't more people doing it?

It seems like it would be illegal, except maybe if you declare bankruptcy? I know the bankruptcy laws got a lot stricter a few years ago, but if you just had the cash in a suitcase or something, it'd be pretty hard to repossess, right? And you could always claim you lost it gambling, or whatever.

Over on Fatwallet forums, people talk about doing an App-O-Rama, and routinely get six-figure lines of credit limit (combined, from getting lots and lots of credit cards in one day). Whenever I get a new credit card, which is rarely, the credit limit is well over $10k.

What am I missing here? Does Bank of America have a crack team of assassins to track down the cheapskates (thieves) that actually do this?

posted by allen8219 to work & money (21 comments total)

Extradition treaties.
posted by aramaic at 9:29 AM on September 3, 2008 [1 favorite]

Withdrawing huge amounts of cash at once is not very easy. If you want $150,000 in bills, you have to explain what you want it for and the explanation has to make sense.

Also, if you showed up in Thailand with $150,000 in cash, you'd live in luxury for about 8 hours.
posted by Class Goat at 9:32 AM on September 3, 2008

Actually, if you showed up in Thailand with $150,000 in cash, it would be seized by Thai customs.
posted by Class Goat at 9:34 AM on September 3, 2008

After your money runs out, Thailand is probably not as fun as you think it would be.
posted by Mr_Zero at 9:35 AM on September 3, 2008

If you went to an ATM and started repeatedly withdrawing $500 at a time, I'm pretty sure that most credit card companies would immediately freeze the account. Hell, I've had calls from companies over relatively small foreign purchases...I'd imagine they have failsafes in place for multiple cash withdrawals.
posted by JaredSeth at 9:39 AM on September 3, 2008

but if you just had the cash in a suitcase or something, it'd be pretty hard to repossess, right?

No, cash in a suitcase is probably the easiest thing to repossess- "Hey you with the suitcase of cash, give that to me right now." There was a story in the US awhile back about a foreign man who worked for years in the US, saved thousands of dollars in cash, and then attempted to leave the country with it. Some government bureau took the cash because he didn't claim the cash in customs (according to the article below, you have to claim 10k or more), and he was having a really hard time getting it back. Here's the latest update- he'll get "some" of the cash back. Ouch.
posted by ThePinkSuperhero at 9:40 AM on September 3, 2008 [2 favorites]

Even with high credit limits, the amount of money you can get via cash advance is severely limited. How many credit cards could you possibly be approved for? Multiply that by 2-5k and you're not looking at much payoff for doing something totally illegal ...
posted by shownomercy at 9:47 AM on September 3, 2008

Is this true? And if so, why aren't more people doing it?

My guess - and its really only a guess - is that this isn't that difficult to do, but that there are some additional consequences that make it less attractive. Specifically:

(1) If you did it, you likely could never return to your home country without facing the legal and financial consequences. Sure, it sounds great to piss off to Thailand for a few years living high on the hog - but forever? I don't think many people are really willing to do that.

(2) $150K isn't that much money for your average Westerner to live on, even in Thailand, unless you are willing to radically alter your lifestyle. Sure, millions of people in the world live on a fraction of that, but their lives are considerably more difficult than just about everyone on MeFi. So that makes it much less attractive.
posted by googly at 9:54 AM on September 3, 2008

I think this would work quite well. You would indeed have a hard time getting a chunk of cash as high as you are thinking of, but at one time I did have at least $50,000 worth of credit that I could have cashed out at any time with one of those credit card checks they like to send to you. There's no reason that you couldn't just deposit the checks and then transfer the total to a foreign bank. You don't have to have a reason for it - it's "free" money.

I sincerely doubt that you would be extradited for such a small crime - but you might want to consider the beat down that your family is going to get from all of the creditors when they realize that they can't find you.
posted by The Light Fantastic at 9:57 AM on September 3, 2008 [1 favorite]

Extradition treaties, anti-money laundering laws and a whole host of other banking security issues would keep one from doing this is my guess.
posted by notjustfoxybrown at 10:26 AM on September 3, 2008

You could avoid extradition by going to any of the grey countries on this map.

Here's what I think would work best. First, be a citizen (dual or otherwise) with a poor but relatively stable country like Yemen, so that you have a right to stay once you arrive. Have relatives there so that you don't have to start your life from scratch. Best of all would be to have a family member who works in the tourism industry or otherwise has some reason to have a steady flow of US dollars that need to be converted to the local currency.

Now, turn your credit lines into cash via money laundering. Travel to the coastal area of your getaway country by private boat. Then, rendezvous at sea with an inconspicuous local vessel, such as a fishing boat. After you arrive, travel quietly to your family's home. Slowly convert the dollars to the local currency via your relative, and invest most of it in local property and business to keep people in the area happy with your (modest-seeming) newfound wealth. Let the family members do the great majority of the spending, and make sure to pay your taxes on time and in full.

Things to avoid: traveling to the getaway country by air; spending dollars; buying luxury items.

With some planning and luck, you can be out of the US with the cash before the government is on to you. With less luck, you can at least do it before they get to you. Once you're in a non-extradition treaty country with the cash, all you have to do is avoid getting robbed by criminals or the government and you're home free.
posted by jedicus at 10:33 AM on September 3, 2008 [4 favorites]

Would this work:
1. Max out all your cards with purchases. Purchasing it at retailers that may give cash back would be great...not too many retailers do that, but if you use the ATM function (read "cash advance") of your CC, you have options to get cash back at some retailers.

2. Return the purchases, elect for cash back.

3. Do this purchasing/returning over a period of few months so that you accumulate debt, but not restrictions on cash advances.

4. Put your money into a thai bank that has a branch in the US.

5. Go to Bangkok.

6. Withdraw ALL your money.

7. Figure out how to hold on to that money securely.

Can that be done? If not, what can happen? Sure the US CAN extradite you of necessary...but will they really chance messing up diplomatic relations over some boner that stole $250K (a LOT of credit cards) from credit card companies.
posted by hal_c_on at 11:25 AM on September 3, 2008

I knew a guy back in law school who did something along these lines. He had graduated from the university we went to and was going back to Indonesia (one of the grey countries on the list).

He charged a PS2 and other small electronics and clothes on his debit card and other credit cards. He then maxed the cards out at the duty free shops in Singapore. When he got to Indonesia, he called all the companies and reported the cards stolen.

I heard this all secondhand, but the mutual friend me and this guy share says nothing happened to him.

While he wasn't carrying boatloads of cash, he did have enough consumer goods to make a decent profit if he sold the items on the black market.
posted by reenum at 11:26 AM on September 3, 2008

So I am seeing a couple issues here, some surmountable, some less so.

Thai customs seizing the money seems like a manageable problem. You wouldn't need to get the money out all at once, and you could keep some of it in a safe deposit box (accessible by a trusted family member or something... that could be an issue itself, I suppose).

Getting a lot of credit and turning it into cash also seems very doable. Like I said, the folks over at Fatwallet make it sound pretty routine, and they definitely have it in cash. The whole App-O-Rama scheme is to take 0% APR money and put it in CDs and bonds, then pay off the loans and keep all the interest. So that's not a problem, either (assuming you have good credit, which I am comfortable assuming).

So I guess the key issue is bankruptcy. If I maxed out all my current cards on lattes and ps3 games (so many lattes!) and then couldn't pay my bills, I wouldn't go to jail, right? As far as I know, there's no debtors' prison in America. If the average American finds himself/herself in unsurmountable debt, that's what bankruptcy's for, isn't it? Obviously the creditors get screwed here, and it's all very immoral... but why wouldn't it work?

The Light Fantastic - family members aren't liable for your debts, unless you're married.
posted by allen8219 at 11:56 AM on September 3, 2008

Hmm, this page suggests that the credit card issuers can challenge the validity of your bankruptcy. http://www.moranlaw.net/plastic.htm
posted by allen8219 at 11:59 AM on September 3, 2008

Bankruptcy won't necessarily disolve all your debts, just resturcture them. In other words instead of going to prison you would just be paying your debts off with interest for a long long time. Good luck getting a house or car loan.

Not only that, you have to be careful that a court doesn't see your actions for what they are -- a scam vs. an honest financial failure. In that case, you might find yourself fighting charges of fraud and money laundering. Welcome to Federal PMITA prison.
posted by dzot at 12:18 PM on September 3, 2008

The Light Fantastic - family members aren't liable for your debts, unless you're married.

This is true, but I know from experience that it doesn't mean that they won't be harassed.
posted by The Light Fantastic at 12:31 PM on September 3, 2008

Wow, I am glad this is not my plan. Working for a living, though not necessarily ideal, has the key advantages of being (a) legal, (b) ethical, (c) free from PMITA-focused action (not that there's anything wrong with that).

So I think it's pretty clear that there is not an awesome loophole that will lead to a MeFi 5-year windsurfing party in Phuket. Alas.
posted by allen8219 at 12:44 PM on September 3, 2008

I know someone who applied for, then maxed out several (6 or 8?) credit cards, used the $ to buy a rental property, paid the cards for the 6 months of free interest, then went to a bank and said "See, I can carry this payment, why don't you write me a mortgage." So, they did. This was at least 15 years ago.

Maxing out cards and leaving the country would be intentional fraud. It's not enough money to get you far enough to be worth the risk. In fact, with the flow of information these days, you'd probably get shut down pretty fast. Cardholder #2 would know that you just cashed out card #1.
posted by theora55 at 12:47 PM on September 3, 2008

I've done the APP-O-RAMA. If you've got good credit, you can pull out a good mid 5 figures. Once you pay it back, you can extend your credit lines and get up into the 6 figures. There is no reason why you can't pull it all out from all the lines at once. I yanked almost my entire credit line over 5 cards and didn't hear peep from the credit companies about it.

That might help with the 'can you get the money' part. The answer is yes. It's going to take a couple of weeks to get the money though. The card companies do some quick credit checks and then issue what amounts to a cashiers check... takes about 10 days to get to you. Then you'll have to take it to your bank and make them clear it. They may put a hold on it. I usually make them verify it over the phone so I can clear the funds the same day.

As for getting it out of the country, I have no idea. Same deal with extradition or declaring bankruptcy.
posted by kookywon at 4:35 PM on September 3, 2008

I would think the reason this doesn't happen more often is because the type of person who would do it probably wouldn't be smart enough to pull it off. It's the same reason so many people are in jail. Many crimes are relatively easy to get away with but your average criminal simply isn't very bright.
posted by bda1972 at 9:27 PM on September 4, 2008