Using that money would be theft.

Absent a basis in fact to believe the money is rightfully your friend's, the criminal laws treat this as theft. They certainly help motivate people to do "the right thing." And as banks eventually trace nearly all of these misapplications, the "friend" will likely be caught.

Just in case "your friend" intends to skip the country and attempt to retire in a place with no extradition treaty, there are lots of cases when after the bank finds the mistake and learns the "early retiree" is in, say Brazil or Afghanistan, although there may be no extradition, it indirectly enlists the assistance of local folks to collect it from the friend (often thru shady investigators and corrupt local officials). Those guys don't pay much attention to due process and have ways to "encourage" the new retiree to pay back the ill gotten gains.

(Reviewed 12-08)