50 Interesting Loopholes People Took Advantage of

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1 Japanese Navy Loophole

Japanese Navy Loophole

The Imperial Japanese Navy became as massive as it did because of the Washington Naval Treaty, which was meant to restrict their navy size. Many of their battlecruisers were made into aircraft carriers as a loophole against the Treaty.

2. Cruise lines pay almost no taxes thanks to a maritime law loophole called “flags of convenience.” Despite being headquartered in Miami, Royal Caribbean Cruises and Norwegian Cruise Line have all of their ships registered in the Bahamas. Carnival Cruise Line has all of its ships registered in Panama.

3. Loopholes used to be slits in the castle walls from where archers used to fire their arrows. That’s why finding the loophole is finding a way to circumvent security measures in place.

4. During a trial, serial killer Ted Bundy put a woman on the stand and then asked her to marry him. She said yes. There was a loophole in Florida law where a marriage proposal accepted under oath was legally binding.

5. In 1896, New York passed the Raines Law to reduce Sunday drinking. The law had a loophole allowing bars to serve alcohol only with a meal. Staff added a sandwich to every drink order, then took it away, serving it to the next customer. The sandwich often lasted all day and was named the Raines Sandwich.

6 Pudding Loophole

Pudding Loophole

An entrepreneur exploited a loophole of a Healthy Choice pudding promotion. By purchasing 12,150 Healthy Choice puddings totaling $3,140, he was able to earn 1,253,000 frequent flyer miles. He also donated all of the puddings and received an $815 tax deduction.

7. A developer in Tennessee was denied a permit to put a sex club next to a Christian School so, they decided to make it a “Swinger’s Church” because of a loophole in the local law.

8. In 2014, American funk band Vulfpeck released a completely silent album on Spotify and asked their fans to play it on repeat while they slept. They earned $20,000 in royalties before Spotify closed the loophole.

9. After Steve Jobs discovered a loophole in California law that allowed a 6-month grace period before requiring a license plate on a leased car, Jobs would lease the same Mercedes-Benz SL55 AMG every six months in order to avoid having a plate.

10. A legal loophole in the UK allows alcohol to be sold without a license on a train in motion. An unlicensed distillery exploited this by setting up in a disused railway building, obtaining a steam train, and selling gin to customers while they rode it back and forth from the distillery.

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11 Kenneth Robinson

Kenneth Robinson

A man named Kenneth Robinson found a loophole that allowed him to buy an abandoned $330,000 house for just $16. His story enraged neighbors for the 7 months he lived there until Bank of America claimed ownership.

12. George Soros used a loophole to defer paying taxes and instead reinvested his money. Following this rule, after 40 years a Hedge Fund manager could amass $15.9 billion as opposed to $2.4 billion (amount if taxes were paid when the money was earned).

13. Famous French writer Voltaire teamed up with a mathematician to exploit a loophole in the French lottery that set him up financially for life. French government shelled out massive prizes for the contest each month, but an error in calculation meant that the payouts were larger than the value of all the tickets in circulation. With this in mind, Voltaire, La Condamine, and a syndicate of other gamblers were able to repeatedly corner the market and rake in massive winnings. The scheme left Voltaire with a windfall of nearly half a million francs, setting him up for life and allowing him to devote himself solely to his literary career.

14. The 1972 Novel “The Day of the Jackal” showcased an easy method of obtaining a fraudulent British passport, which was later used by the IRA and the KGB. The book’s protagonist – the Jackal – trawls three village graveyards looking for the headstone of a baby boy who, had he not died, would have been about the same age as the assassin. Taking the details of the late Alexander James Quentin Duggan to the Central Registry of Births, Marriages and Deaths, the Jackal buys a copy of the deceased’s birth certificate – all the proof he needed to successfully apply for a passport. This loophole went unclosed until 2007 and may have resulted in up to 1,500 fake passports being issued each year.

15. In 1947, German logician/mathematician Kurt Gödel told Albert Einstein that he discovered a loophole in the Constitution allowing the US to become a dictatorship. However, Einstein prevented Gödel from revealing the proof because he knew it would hurt Gödel’s chances of gaining citizenship.

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16 Liver Transplant Loophole

Liver Transplant Loophole

Steve Jobs used a loophole in the UNOS (United Network for Organ Sharing) registration system to get his liver transplant before others. Having a private jet on standby allowed him to register for a liver transplant in every transplant clinic in the country. The loophole has since been closed.

17. One of the main usages of Agent Orange in Vietnam was to destroy crops in friendly territory to force people to move to cities. Agent Orange is still legal in warfare, due to a loophole.

18. Gambling for cash is nominally illegal in Japan, but a legal loophole allows for pachinko gambling. Pachinko balls won from games are exchanged for “special prize” tokens which are sold for cash to a separate vendor off-premises. These vendors then sell the tokens back to the Pachinko parlor.

19. Unmarried Iranian people who have sex or even date and hold hands can be arrested, fined, or flogged. Sigheh or temporary marriage is a loophole to this. Under this Arabic law, people can marry for a few minutes or as long as 99 years.

20. In 2016, France blocked an attempt by Belgium to issue a 2-euro coin commemorating the anniversary of the Battle of Waterloo (which France lost). Using a loophole in Eurozone guidelines, Belgium simply minted a 2.50-euro commemorative coin and put it into circulation anyway.

15 Most Controversial & Costly Blunders in History

21 Issei Sagawa

Issei Sagawa

A cannibal named Issei Sagawa has profited from his crimes. After murdering and eating his classmate in 1981, he was released due to a loophole. The Japanese wanted to detain him and the doctors even said he should be in prison, but they couldn’t legally detain him without the court documents from France (his victim was a French citizen), which France refused to turn over. He has since then translated his fame into books, talk show appearances, and even softcore porn films in which he bites his co-stars.

22. In 1740, Christina Johansdotter, a suicidal Swedish woman, exploited a loophole in dogmas. Suicide leading to Hell and infanticides being punishable by death, she decided to kill a child since repenting for a crime granted forgiveness, thus leading her to heaven after her execution.

23. Lord Byron kept a pet bear in college. He did this via loophole abuse. The university forbade keeping dogs, meaning he couldn’t keep his beloved pet with him, but there was no mention of bears in their rules. He would even walk it around the grounds on a chain.

24. In 1825, the Baron of Renfrew, one of the largest wooden ships ever built, set sail from Anse du Fort, Quebec to London, England. Her mission was to be scrapped for wood on arrival in order to exploit a loophole in British lumber tariffs. In the 19th century, these taxes had reached 275% of the value of the timber cargo. She sunk 650 miles off the shore of England.

25. In the Roman Empire, to increase the dwindling population of the upper class, families with three children were given tax exemption. Many sought loopholes to get the benefits without the burden of three kids, resulting in a network of government spies and informers to catch them.

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