I own Oblivion on the Xbox and my friend has a saved game on my hard drive. When he plays he just runs around questing and killing things (he doesn't have the patience to RP lol) and naturally he accrues a large bounty and never has the money to pay for it so he eventually just pays the time for the crime, but when he gets released he gets free stuff added to his inventory!!! I can't remember what the name of the item was, but I do remember it was an enchanted robe, not a rare one, but the fact that he gets free stuff for being thrown in jail really confuses me haha. I have tried many times to copy this phenomenon, but to no avail.

Any ideas what this could be? Or has this happened to anyone else?

he might have already had the robe, if not i really have no idea, considering i never do that stuff.

I thought that too, but we loaded up an autosave that wasn't long before he was arrested and found that it wasn't in his inventory to begin with. I find that very strange O.o