Imagine you’re Maloney & Porcelli, a fancy steakhouse in midtown Manhattan that relies on the wining and dining of hotshot business people.  Now imagine those hotshots stopped showing up because their cash-strapped employers no longer reimburse them for wining and dining.  Well, that not-so-imaginary scenario is probably what spawned Maloney & Porcelli’s Expense-A-Steak. 

Here’s the idea: you enjoy a pricey meal at Maloney & Porcelli, you type your total bill into the website’s expense report generator, and it creates fake receipts to help you submit a phony expense report that’s likely to be accepted by your accounting department, who will then reimburse you.  The fake (although very realistic) receipts-- for common items like office supplies, cab fare and mozzarella sticks-- all add up to the exact amount you entered.  Genius!  Of course you don’t actually have to eat at the steakhouse to play around with the expense report generator.  In fact, if you haven’t tried it out yet, I suggest you do so now and then return to finish reading this post.  Here’s the link again.

Okay, welcome back.  Fun, right?  It’s a brilliant idea that’s brilliantly executed and sure to be a viral hit. 

That being said, could this funny stunt get Maloney & Porcelli into trouble?  In my opinion, yes.  The site is so well executed and certain to be shared that it seems likely some corporate jackasses will actually use Expense-A-Steak to scam their employers.  Those jackasses will get caught and get fired.  Then attention will turn to Maloney & Porcelli, who paid to create Expense-A-Steak.  The funds stolen from a single company might not be enough to justify legal action, but a handful of defrauded companies could easily band together and file a class action suit against the restaurant.  And then it’s up to the courts. 

Now to predict how the courts might decide, let’s look at a couple precedents: Napster and YouTube.

If you recall, Napster’s file-sharing framework wasn’t in and of itself illegal.  Copyright owners could’ve easily used it to share their own files without arousing any legal issues.  However, the file-sharing activity on Napster was illegal because copyrighted material (music) was exchanged without the permission of copyright owners (the record labels).  And even though it was Napster’s users who violated copyright law by sharing music, Napster paid the price.

YouTube has a similar story.  The site is used to post all types of video, and most of that posting is legal.  But YouTube/Google was held accountable when users posted episodes of The Daily Show and The Colbert Report (Viacom’s copyrighted content) to the site without Viacom’s permission.

Side bar: If users are violating the law, why do websites take all the flak?  Well, it’s because those websites are the ones who get sued, not the individual users.  It’s much easier to take legal action against a single entity (like a company) than against dozens, hundreds or thousands of unaffiliated individuals.  The other reason is that businesses generally have more money than individuals.  Case in point: Viacom waited to unleash its suit until after Google’s deep pockets had officially acquired YouTube.  Thus, websites bear the legal brunt because they’re easier to target, and easier to get money out of when they lose in court. 

The overall messages of the Napster and YouTube suits are A) If your site can be used to do something illegal, you need to try to prevent it.  And B) if your website is host to illegal activity, it’s your responsibility to stop it.

So that brings us back to Expense-A-Steak.  Maloney & Porcelli is doing nothing to prevent fraudulent activity.  A simple line like “For entertainment purposes only” or an explanation of applicable laws would be a visible attempt to discourage misuse of the expense report generator.  But there’s nothing.  There’s also no language on the site disclaiming the restaurant’s liability if the site is used for nefarious purposes.  Without either of these, the steakhouse is openly inviting people to break the law, and handcuffing itself to them as they do.

If and when people get caught using the expense report generator to defraud companies out of thousands of dollars, they’ll immediately point the finger at Maloney & Porcelli, who will probably be forced to foot the bill and the bad press.  In short, Expense-A-Steak is a fun, creative, infectious idea that will have to earn Maloney & Porcelli a pretty penny to make all its liability worthwhile.