"Neither a borrower nor a lender be" is an old saying worth sticking to among all foreign teachers in China, some of whom have been in China awhile and have adopted the dishonest Chinese culture of not repaying their debts on purpose, as practised by bottom-feeding Chinese.
What you describe can easily happen to foreign teachers in China who are too quick to trust their fellow foreign teachers. Some foreigners here have developed an insatiable taste for expensive rye and fast women, especially in the big cities, where they find their salaries are not high enough to pay for their expensive pursuits. Laowai bar flies will often try to dupe their fellow foreign teachers in order to obtain additional funds. Never ever oblige them!