You can be generous to people who you expect generosity from, and stay away from crooks and selfish people who won't repay you back. For example, Jesus said "resist not evil" but he also said to avoid evil, and he stayed with his disciples which were good guys. Being generous and loving doesn't mean to be naive pussywellows who let other people step all over them. That's just a projection and image of nice-guy goodie two shoes spirituality, and not what spirituality really is.
Truly being generous means to give people what they need as lessons to enlighten. Letting crooks get away with stealing your money is a bad lesson to give people -- perhaps the most generous and loving thing your friend can do is demand his money back, to teach them a lesson that they shouldn't mooch off of other people and act selfishly. That is for their highest good, or else they'll be running huge karmic debts all over the place.
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