A friend who has a non-profit received a check from someone for 100K who offered to make a donation to the foundation. He was asked to wire the rest to Japan. He deposited the check it was held for 5 days then wired on the sixth day. The check was no good [fraud]and the bank seized the 25K that was in the foundation plus demands payment for the remainder 75K. It appears that the bank did not safeguard my friends foundation and since it was such a large check that Section 229.13 should protect him from this loss. Greatful for any advice...

I work in my bank's fraud area, so I'm familiar with the fraud you describe(I'm afraid it's becoming a classic scam), but I'm afraid I can't place the legal citation. When I googled 229.13 and "nonprofit", I got a reference to Iowa laws on committing mental patients--probably not at all what you're referring to. Can you help with more info?

No way. How can you possibly believe your friend is entitled to $25,000. Thats like saying I wrote a check to a Las Vegas casino and lost all the money gambeling so the bank owes it back to me because they negoiated my check and didin't protect me from the loss. Your fried participated in and got taken in a scam.

The bank is a processor of transactions and not a police force. They will try and stop fraud where possible, but cannot possibly be responsible for every check that passes through the bank on a daily basis.

What your friend should do is immediately make some arrangements to repay the $75,000 owed to the bank. Its your friend that has defrauded the bank out of the money, and he owes it back.

It is unbelievable that as much publicity this type of scam gets people still fall for it.

We just found out that the depositary bank was notifed 2 days after the deposit that the check was an invalid account. 4 days later the depositary proceeded to wire the 100k to Japan. without informing my friend. Is this the bank's negligence who should be held responsible.

We just found out that the depositary bank was notifed 2 days after the deposit that the check was an invalid account. 4 days later the depositary proceeded to wire the 100k to Japan. without informing my friend. Is this the bank's negligence

Yes, and you can print this thread out and show it to the judge at the trial. he is obligated to rule in your friends favor.

btw, you must be a good detective. are you posting these from the bank lobby? first post at 4:20 and then you "just found out" at 4:51.

Not in the bank's lobby... the facts are: A check deposit of 100k was made on 10/24. A receipt was given to my friend [who has the non-profit] stating that the funds would be availiable on 11/08. The depository bank was notified on 10/26 that the check had no account attached [obviously check fraud].The depository bank wired the money to Japan on 10/31. My friend was not notified by the bank that the check was returned. Was the bank negligent? Should my friend recieve back the 25K that they took from the account?

Your friend would do himself a great big favor at this point of time by engaging an attorney and not rely on the advice of friends. For this amount of money, there is a good chance that he may face criminal charges for fraud. Not only from the bank, but if I was on the board of directors of this non-profit, I would be in contact with both the local DA and a civil attorney. Sounds like a case of misappropriation of funds.

This is the second time I have heard of fraudulent checks in this amount with the request for funds to be transfered to Japan.

Perhaps our Nigerian friends have developed a taste for sushi?