I own an LLC business with a ficticious name. The business has a separate tax ID and a business checking account. An associate of mine was given authorization to use this account for paying bills and depositingchecks. He began depositing the checks made out to my business into his personal account. He endorsed the checks by writing "For deposit only...". The bank told me he could do that since he was a signer on the account. Is this true? If not, what law cites this?
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You've got a dishonest associate and a misinformed banker on your hands. Unless those checks were payable to your business associate, he could be charged with a special kind of theft called "conversion". The bank could be liable to you, as well.
Talk to an attorney as soon as possible. You and your attorney need to start the process of making claims against the parties that issued the missing checks and considering legal action against the bank and your business associate. Talk with your accountant or business advisor about better controls over accounts receivable payments, to help prevent a recurrence of your associate's actions. You might also start looking for another bank relationship.
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You've got a dishonest associate and a misinformed banker on your hands. Unless those checks were payable to your business associate, he could be charged with a special kind of theft called "conversion". The bank could be liable to you, as well.