The charity thing is probably a legit mistake. I have a vague recollection of an email chain where he asked how many 911 hashlets were sold, someone told him the number, and he was like, "o shit."

Fraud has to be premeditated. Misappropriation is intentional. I don't think this was either. He probably botched the part of the system that was supposed to put a cap on the sales, and he probably had all sales money go into the same account as regular hashlet sales. By the time he realized that he sold too many, the money was spent, and all he had left was the $10k he actually did set aside for charity.