A law office gave their ex-employee checks made payable to my physical therapy clinic. The ex-employee cashed those checks without endorsements on the back. Who is responsible for this? Which bank should be held liable -- the payee's bank or the bank that allowed the check to clear without an endorsement?
If your business never received the checks or the value from them, you are still entitled to payment by the law office. If you make your claim, the law office should enter a claim with its bank that the checks were paid without proper endorsement, and that bank will enter a claim against the bank that took the checks for deposit or cashed them for the employee.
In this case, the bank that accepted the checks first is liable, unless it can recover the funds from its customer. You will need to start the ball rolling by working with the law office to complete an affidavit that you never received the funds or endorsed the checks.
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If your business never received the checks or the value from them, you are still entitled to payment by the law office. If you make your claim, the law office should enter a claim with its bank that the checks were paid without proper endorsement, and that bank will enter a claim against the bank that took the checks for 