Interesting....
I have dealt with a situation like this in the past with rule violation but the amount was only 40k and the group was griefing the sim in the name of the law so I booted them after my 3 strikes you're out warnings and I don't believe I refunded them. This was back when I was just managing sims and the sim owner decided to give him back 60% of his money considering the mess his group caused on the sim and the sim owner was supposed to give back around 22k and put in 1 too many zeros and gave back 220k and the guy only refunded him 153k of the money back.....in some cases a refund isn't deserved and in this one the guy ended up swindling us in the end.
This was a bit far fetched but she said they were constantly breaking rules. Was this in her covenant that she would not refund? If it was they have no argument here. If not, then yes, blatant abuse of power and she should be strung up on the gallows for it. I don't know, this one can go both ways for me.

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