Instead, Westpac transferred $10m after a clerk put the decimal point in the wrong place.
Gao transferred the money overseas to 23 bank accounts before fleeing from New Zealand. Despite the best efforts by Westpac and authorities to recover the money, $3.7m is still missing.
Mr Mansfield said the bank had liquidated Gao's property.
"They've left him with no assets or livelihood," he said, referring to Gao's bankruptcy earlier this year.
Justice Anthony Randerson responded: "Well, have they? We don't know what he's done with the $3.7 million. For all we know, he's still got it and the funds are available."
Mr Mansfield suggested that another conclusion could be that Gao had spent the money.
Justice Rodney Hansen said that was for Gao to establish.
"Either he has got to refund it or make reparations or show that it is beyond his ability to refund it. Otherwise, the only inference to draw is that he has got the rest of the money salted away somewhere."
Justice Graham Lang was also curious.
"3.7 million is a lot of money to spend over a short period of time."
Mr Mansfield said he had no information about where the money was, and could not ask for time off his client's sentence for reparation payments because there had been none.
He said it was not unusual in fraud cases for stolen money to be lost forever.
"We are left to speculate whether he has got access to the funds or if he's spent it. With respect, it matters little."
Mr Mansfield said the court should apply a special sentence to a special set of circumstances. He said Gao's offending was "opportunistic" and unsophisticated.
Crown lawyer Kate Bicknell disagreed and pointed out to the court that Gao used 23 bank accounts and 39 transfers to move the money overseas to prevent authorities stopping him.
"This offending did have the hallmark of sophistication."
The Justices have reserved their decision.
