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Home >> Scams/Fraud
Bank Abetted Fraud: How About Remuneration?
My sister-in-law has been "helping" my mother with her banking, paying bills, etc., since my father passed away three years ago. About two weeks ago, my mother got an overdraft notice from the bank. When we started checking into this, we found out that my mother's savings account, that held $40,000.00, had been depleted and closed, and her checking account was drained. A lot of the debits were from ATM and debit card withdrawals. My mother never had a debit card. Then we found out someone had taken out a $25,000 mortgage against her home, and assigned automatic withdrawals from my mother's checking account to cover the monthly mortgage payment. We then found out that the bank did not have a POA on file when they made the home loan, but my sister-in-law brought them a forged one five months later (two weeks ago).
It appears that the bank had given all these sums of money to my sister-in-law, who had no authority to make savings account withdrawals, debit card posession or usage, or checking account withdrawals. It appears to me that the money was actually illegally obtained from the bank, and they didn't check to see if they were giving the money to the right person, so they put zeroes on all of my mother's accounts to cover their fraudulent losses. The bank is being reluctantly cooperative in providing back statements, information about the mortgage, etc. Should they not have to put the money back in my mother's account that they mistakenly gave to a thief? This sister-in-law has now been arrested and charged with forgery and theft, after we complained to the Sheriff's department.
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 It's unlikely that the bank will return all those funds on its own volition. Your mother, after all, had a responsibility to review her account statements to detect unauthorized transactions such as transfers to pay the bogus mortgage. If your mother wants to push for reclaiming funds from the bank, she may have to get an attorney involved, and could have to sue the bank in court.
We don't argue that the bank is without responsibility in this sad case. On the contrary, if all is as you have said, the bank has a lot of explaining to do, but to determine how much the bank is obliged to repay, your mother may have to take legal action.
Published on BankingQuestions.com 7/03/09
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