A past secretary for our company stole blank checks on my company trust account and a book of checks for my horse farm. The check theft apparently occurred while she was in our employ, until early in 2006.
In checking my accounts online I found lower balances than expected and I looked at the checks that had been cashed and was shocked that about $6,400 was stolen from my account due to checks she forged. They ranged from $30 to $900 and there was more than a dozen of them. The signatures were nothing like mine.
The forger was an accountant before she worked for me at a big local hospital and then was an accountant for the county. I notified the bank as soon as I discovered the forgeries and filed the necessary papers and a warrant for her arrest. She has now been arrested. The bank told me then if I closed the accounts on which she wrote the forged checks and opened new accounts, they would replace my money. Now they are refusing to do so. A Vice President told me that the bank where she deposited the checks should replace the funds. This doesn't seem right to me as her bank didn't have my signature to check to see if the checks were valid when they deposited them into her account. She apparently withdrew the money quickly.
My bank replaced the money for only two of the checks, about $900 and now says they won't replace the rest, about $5,500.
Which bank is responsible to replace the money, the bank who cashed the check for her where she had an account or my bank that removed the funds from my accounts? What recourse do I have, and if I retain an attorney, could I sue the bank for my legal fees?
Consult an attorney, but the prospects for recovery of your funds, except from the forger (who may not have assets to repay you) are rather slim. Bank depositors, particularly those in business who hire others to help them keep their books, have a responsibility to have controls in place to detect forgeries and other dishonesty by those employees. The Uniform Commercial Code, section 4-406, includes language that limits your bank's responsibility when an ongoing series of forgeries takes place. It's the so-called "same wrong-doer" rule. Your bank's legal or security department undoubtedly looked at its options when it learned of the string of forgeries, and decided to limit what it reimbursed you.
The other bank (where the checks were deposited) probably has no responsibility to reimburse you.
Section 4-406 is not a "black and white" rule. It provides for some added responsibility by your bank, under limited circumstances. An attorney can review your case and advice you of your chances of recovery might be.
Check carefully your state's version of that section of the Uniform Commercial Code. Most states have a one-year limit on claims against a bank for paying checks with an unauthorized signature (including forgeries). If, as you say, the thefts ended in early 2006, it may be too late to recover on any of the earlier forged items, but that will depend on when you notified the bank of the problem.
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Consult an attorney, but the prospects for recovery of your funds, except from the forger (who may not have assets to repay you) are rather slim. Bank depositors, particularly those in business who hire others to help them keep their books, have a responsibility to have controls in place to detect forgeries and other dishonesty by those employees. The 