Even allowing for such a contrived example, would it be so bad if the money was taken from John Smith? The contract writer was an idiot, sure, but John Smith is an idiot too for just taking the money and expecting to be able to keep it. To say otherwise is to say we want to encourage people to take money they didn't earn, to avoid reporting it to an authority, because they'll be able to get away with it. It is also to say that the punishment for stupidity is whatever happens to be the consequence, rather than a fair punishment reasoned out by society.

(I am against prosecution in this case, but I think he should have most of the money confiscated)