What exactly is illegal about what he did? Basically as I see it the bank extended him 1.5million in credit, which he of course had no ability to pay back. BUT if everyone who got in over their head in debt was in prison well, they’d have to build more prisons!
What is the legal thinking here? If I try to charge 1.5million on my credit card and it goes through I am going to prison? 
Heh. Dude got busy quickly. 
If the bank errs: You are in trouble.
If the customer errs: You are in trouble.
If you charge it knowing ahead of time that you have no intent to ever pay it back – yes, that’s fraud, and you can go to prison.
You don’t go to prison if you tell the bank about the mistake and pay the money back. Take $1.5mil and gamble it away, you’re going to prison.
The bank didn’t extend him credit, the bank failed to prevent him from removing tons of money from ATMs. It was a mistake, just as if the ATM tech failed to lock the front, and anyone could just open the door and take out stacks of $20s. The fact that he used his card is somewhat beside the point, he knew for damn sure that money wasn’t his, and he had no agreement with the bank to take it.
Wouldn’t the fraud have to be some kind of material misrepresentation?
If a man with no assets and no income asks for a loan and is entirely truthful, and the bank gives it to him anyway he is guilty of fraud? What about the famous NINJA mortgages where the borrower had no ability to make payments?
He likely figured he’s double/triple his stake, return the 1.5 to the bank, and toss the teller a blue chip as a tip.
If he’s entirely truthful about his intent to never pay it back, then no – no fraud.
Generally if a bank makes an error in your favor, it’s not payday. It’s not your money, even though it wasn’t your error. In this case there was no agreement for the bank to extend this guy credit, he was just taking advantage of an error. A similar case would be if you deposited a check for $10.00 and suddenly found that the bank had credited your account $1,000, and then you withdraw it. The bank made a mistake and you know it’s not your money.
I suppose the credit card analogy might work similarly if you have a credit limit of $1000 and for some reason the limit doesn’t kick in and you find your self with a bill for $1.5M. In that case, however, you are going to get billed for the balance plus interest. I don’t know if it would be treated as fraud.