6 Loopholes That Got Exploited With Zero Mercy
There's no story as satisfying as that of the underdog defeating the big bad boss. And you don't need to crack open a book to get that gravy. Every day, real people train, study, and ... uh, carefully read the fine print so they can safely and legally screw with the authorities. And while exploiting legalese doesn't sound that epic, hundreds of people have been saved by loopholes that hide in plain sight -- the kind that are safe as long as they remain obscure and some attention-starved idiot doesn't start blabbing about them in a desperate attempt to look smart. Wait, oh shi-
You Don't Have To Pay Off Your Student Loan Debts If You Flee The Country
For being the land of wealth and opportunity, the U.S. sure plunges a lot of people into serious debt -- medical debt, payday loan debt, got-called-a-pedo-by-a-billionaire legal debt. But it's student loans that have truly become the American eagle around everyone's neck. In 20 years' time, the average student loan has doubled, and by 2022, Americans will be burdened by a collective $2 trillion getting siphoned out of their income. But until now, few of these college eggheads have figured out the tried and true method of dealing with debt collection: Skip town. Or the country, in this case.
Some Americans are choosing to flee to go live in jungles or caves or wherever the undersecretary of Education won't be able to track them down and break their legs. But you don't need to get a fake passport and an improvised dye job in a truck stop bathroom to escape. Just getting on a plane is often enough to make it completely disappear. That's what dentist David Donelson discovered when he drifted to Dubai after his divorce left him destitute and in debt up to his dentures. Merely by leaving the country, his lawyer managed to drastically reduce his monthly student loan payments by thousands of dollars.
This is thanks to a little-known tax break called the Foreign Earned Income Inclusion, which lets U.S. taxes ignore the first $100,000 you make each year abroad. Since loan payments are calculated based on a percentage of your adjusted gross income, it can act like a poverty invisibility cloak. Make less than 100k a year (art grads, looking at you), and the IRS will think you're making zero money, and since calculating a percentage from zero summons Algernon, the god of death and calculus, the student loan office will just leave you alone.
It gets even better. Unlike debt fugitives, expats won't be getting chased down drainpipes the moment they return to the U.S., and they're allowed to come back for up to 35 days a year without losing this tax break -- plenty of time to catch up with everyone and have time left to do a few smug victory laps around your alma mater.
Of course, the debt won't go away. In fact, since you're not even paying off the interest, it'll embiggen instead. But this isn't about erasing the debt; it's about outliving it. Once you've established your fiscal exile, you have two options: Stay out until you're dead, or keep letting the algorithm believe you're broke as hell and have the debt expunged. So if you're about to finish college, follow these rules and you'll never have to think about paying off your loans. All while you're abroad, making a little money and only flying back home for the holidays or when you need your laundry done. So not all that different from staying in college, really.
Related: 6 Hilarious Loopholes Normal People Used To Beat The System
A Grocery Store Tycoon Claimed His Own Kidnapping As A Business Expense
Discount supermarket Aldi knows how to pinch a penny, whether that's through looking like Cold War bomb shelters, switching out beef with cheap horse meat, or getting their fish sticks from North Korea. The chain is dedicated to making sure nobody pays a cent more than they have to. All this in honor of its late founder, the only man who ever treated his own kidnapping as a tax break.
Along with his older brother Karl, Theo Albrecht built a bargain empire by refusing to waste any money on frivolities like marketing. Or shelves. This ethos quickly made Theo the second-richest man (and the second-richest Albrecht) in all of Germany. But in 1971, Albrecht was abducted by Heinz-Joachim Ollenburg, a lawyer / gambling addict, and his accomplice "Diamond" Paul Kron, professional nickname-haver. At least, they were pretty sure it was Theo. Albrecht wore such cheap suits that his assailants demanded to see his ID before deciding he was worth kidnapping.
Once they brought him to their lair / law office, the bargain-conscious mogul continued to live up to his reputation by haggling the kidnappers over his ransom. He managed to bid them down to 7 million Deutschmark (roughly $2 million), which was then delivered by the Bishop of Essen, who we imagine got a lifetime supply of surprisingly good $6 sacramental wine out of it.
After 17 days, the Aldi emperor was set free. But he wasn't done getting his money's worth. Albrecht reasoned that since the theft of company property can be listed as a business expense, so should theft of company founders. Before the end of year, he filed for tax relief from the government, went to court, and convinced the state to let him write off the entire ransom. What happened to the kidnappers? The bumbling duo was quickly caught and ordered to hand over the money, meaning that Albrecht theoretically could've turned a profit off his own kidnapping. Except that, to this day, only half of the 7 million Deutschmarks have been recovered. That's the thing with Aldi deals -- they often wind up being half off.
Related: 5 Brilliant Loopholes People Used To Cheat The System
British Rail Workers Went On A Piss Strike
Say what you will about government bureaucracy, but at least it never docks your pay for shitting too long. And it was exactly this corporate clock-watching that scared British rail maintenance workers when the government announced that the London Underground would become part of a public-private partnership. So the workers devised an ingenious plan to counter this PPP with too many pees of their own.
Even before the merger, workers were feeling the squeeze on their benefits and perks, but it was the repeal of "job-and-knock" that was the final drop that ruined the Y-fronts. Because you can only clean rails once each shift, the maintenance teams worked with an informal system wherein they just went home (or knocked off, as the Brits say) if they managed to finish work early. This didn't comply with the dead workhorse ethic of their new corporate overlords, so management banned the practice, forcing too-efficient teams to traipse back to the depot and sit on their hands until the clock told them they were done not-working.
The workers decided to fight back, but since many of their comrades were non-union freelancers, striking was too dangerous. So the crews organized a "work to rule" industrial action, a loophole whereby they would follow every single company rule to the letter and let the bureaucracy shut down work for them. And the crews knew exactly where the company protocol was weakest: the groin.
Instead of just whipping out their little tube and peeing on the rails, the mostly male workforce started a "piss strike," having the health and safety officer escort them along the dangerous rails back to the bathrooms. And since management was too cheap to hire more than one such officer per shift and the rules dictate that all workers have to be within view of one, the entire workforce had to return to the depot with a single pee-er. Once relieved, they'd all conga back to the rails, whereupon, like the road trip from hell, another worker realized they needed to go, restarting the whole pee-cycle.
Not only was management unable to fire anyone for literally taking the piss, but the strategy was so effective at disrupting the Underground that they folded in a single day, conceding to many of the workers' demands. In the end, the privatization of the London Underground was reversed. This was not due to the worker's strategic incompetence, but a decade of normal private sector incompetence, leading to an expensive state bailout and renationalization.
Related: 5 Insane Ways People Trolled The System (And Won)
An Economist Won The Lottery 14 Times By Playing Every Single Number
Stefan Mandel didn't have good luck. After all, he was born a capitalist with a head for numbers in Cold War Romania. Unfortunately, his odds of escaping abject poverty were about as good as lighting striking the corpse of Lenin, causing him to reanimate and cancel communism. But Mandel calculated that it was actually more like winning the lottery 14 times, and he liked his chances.
After obsessively reading the works of 13th-century math stud Leonardo Fibonacci, Mandel figured out a way to win the lottery without doing any gambling. He developed an algorithm that could determine blocks of numbers guaranteeing at least five out of six winning numbers. Together with two investors, he bought the many tickets necessary to cover all the possible combinations. It worked like a charm (not that he needed one to win), earning him the biggest prize of all: enough money to bribe an official to get his family the hell out of Romania.
By the time they had arrived in Australia, Mandel had made his most genius realization: Winning the lottery wasn't a problem of mathematics, but logistics. Since most lotteries let you print and fill out your tickets at home, all he had to do (and hear him out) was print a ticket for every, single, number. The math was ridiculously easy. Mandel calculated that the lottery payout just had to be three times the number of combinations (which in the best cases came down to "only" a few million tickets) before he was mathematically unable to lose money. All he had to do was round up thousands of people and convince them that his technically legal loophole that took government money and offered an immediate return on investment wasn't the world's most obvious Ponzi scheme.
But success speaks for itself, and everyone loves a winner. In ten years, Mandel claimed that his method won him the lottery 12 times. But with the Man getting wise to his nigh-impossible winning streak, he decided to go out with one big score: the Virginia State Lottery, with a $27 million prize. From Australia, he "used 20 to 30 tons of paper" to generate 7.1 million tickets, shipped them all to the U.S., and paid couriers to drive around the state discreetly submitting them at gas stations and grocery stores -- as discreetly as you can while handing over bricks of 10,000 tickets, at least.
In the end, they only managed to submit about 6 million of the tickets, meaning Mandel had to actually play the lottery for the first time in a long time -- with 6 in 7 odds instead of 1 in 7 million. Mandel and his Australian investors didn't just win the main sum, but most of the lesser prizes as well.
And now it's time to reveal the real con. Mandel never got rich from winning the lottery. Even with the massive Virginia winnings, each investor only made $1,400, barely enough to cover a trip to Disneyland. But Mandel wasn't a gambler; he was an economist. He charged his collaborators exorbitant consultant fees -- $1.7 million for the Virginia Lottery alone.
Of course, you and I can't get rich off this technique, since it's the reason you're no longer allowed to print lottery tickets at home. Everyone loves a winner, except the house. After his loophole was closed, Mandel gave up treating gambling as a business and finally started acting like a real lottery winner, taking all his money and retiring to a tropical island.
Malaysia Couldn't Control Its Newspaper Men When They Made "News" That's Not On "Paper," Man
Malaysia's censorship laws are a bit like visiting your grandparents -- everything's fine as long as you don't badmouth the government, wear something they think is too sexy, or mention Israel (you know, those grandparents). As you can imagine, that kind of control really chafes journalists (the pro-government part, not the anti-nudity). At least, until they discovered that, also like your grandparents, their government didn't know how to work the internet.
Malaysia maintains control of its media by literally taking away its freedom of the press. For newspapers to legally own a printing press, they need to be granted a publishing license by the government, which is up for review every single year. Fail to be pro-government enough, and next year you'd be back to publishing seditious talk on bathroom doors like everyone else.
But at the dawn of the 21st century, the Malaysian government made a big mistake. In order to attract tech bubble money, it passed laws promising it wouldn't mess with freedom of speech on the internet, figuring that since there was a ban on porn, it would never take off there anyway. What they hadn't predicted was something as radical and alien as a news ... website? Wild stuff. With the backing of the Southeastern Asian Press Alliance, Steven Gan and Premesh Chandran founded the website Malaysiakini, with the message "Conceived by journalists who are unhappy with the sorry state of our mass media."
And just like that, the government's press monopoly wasn't worth the paper it was printed on. Attempts to bully Mayasiakini into shutting down started immediately. Their journalists were declared "traitors" by the prime minister, their site was the constant target of cyberattacks, and in 2003 their offices were raided and their servers confiscated on charges of hurting the government's feelings.
Nothing could stop Malaysiakini, though, as people were so desperate for alternative news sources that it was like the arrival of Pepsi in a world where Coca-Cola was jailing political opponents. The site not only thrived, but became one of the ten most visited websites in Malaysia (which, again, doesn't have porn). It's still one of the most trusted news sources in the country, making Malaysia the only place in the Universe where information is considered more trustworthy if you say you got it off the internet.
Related: 5 Wild Loopholes People Used To Beat Rigged Systems
A Gay Couple Gender-Bent The Rules To Get A Marriage License In 1971
When Jack Baker and Michael McConnell met in the summer of 1967, it was like fireworks. But when Jack proposed that they move in together, Michael, a nice proper boy, told his beau that "you have to find a way for us to get married." Two gay men. In America. In a time when sodomy laws hadn't been updated since they were burning men at the stake for having a lisp and washing their faces.
So Jack did the most romantic thing a lover could think of: He enrolled in law school to find a loophole that would let them legally live happily ever after. First, Jack had himself adopted by Michael -- the only way gay couples back then could take each other's names, and more importantly, their inheritances. And in 1970, the McConnells discovered a massive oversight in Minnesota's marriage statute: It technically didn't say anywhere that two people of the same gender couldn't get married. So they went to get their marriage license ... and were flat-out rejected. They then took that case to the U.S. Supreme Court ... and were flat-out rejected.
If the system wasn't going to play fair, Jack and Michael reasoned, they weren't going to either. Jack devised a new plan. Since only one party had to be present to obtain a marriage license, he changed his name to the gender-neutral / '70s spanking fetish porn name Pat Lynn. Then they traveled to Blue Earth County for the nuptials. Michael walked in, let the clerk make an un-woke assumption about the name "Pat," and three signatures later, Michael and Jack McConnell were wearing white circlets and holding each other's hands as they celebrated their union in front of God and country.
"Wrong on two counts, dork."
Not that their troubles were over by a long shot. Their marriage shenanigans had cost Michael his job at the University of Minnesota, and the IRS still refused to acknowledge their union, claiming that only a man and woman were worthy of receiving the most sacred marital rite, the tax break. Worst of all, they discovered that the Blue Earth dirtbags had never officially registered their marriage license when they had discovered it was Michael and Jack, not Michael and Pat.
But they had the proof, and each other, and for the next half century, the McConnells fought tooth and nail to have their love (and that of gay couples everywhere) recognized by the U.S. government. They helped turn Minnesota into a hub of gay rights, and when same-sex marriage was legalized nationwide in 2013, it happened in part thanks to legal precedents they had established.
In 2018, a district judge finally recognized their 1971 marriage, making Michael and Jack McConnell the longest-married gay couple in the world. And if they can teach young couples anything about marriage, it's that getting a piece of paper from the government doesn't prove your love. But bamboozling a bunch of bureaucratic homophobes into giving you that piece of paper sure does.
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