check fraud

[lipservice]

What is the name of your state? CA

My friend who has a non-profit accepted a check from someone [from PA] [only a acquaintance] for 25,000 who asked him to deposit it in his non-profit account then wire the money to him in Japan. The person promised after he recieved the money he would make a donation to his non-profit.

MY friend deposited the check in his non-profit account. BOA put a hold on the check for a week [because it was a significant amount] then when the funds were available my friend wired the money to Japan to this person.

Well a few days after the wire to Japan. BOA called my friend to say the check was no good and the person to the account is not to be found. Japan bank says they refuse to wire back the money. BOA released the funds before securing them from the PA account.

My friend is now being sued by BOA for the 25,000+
Any suggestions for this sticky situation? ...thanks

My friend is now being sued by BOA

Originally Posted by lipservice

What is the name of your state? CA

My friend who has a non-profit accepted a check from someone [from PA] [only a acquaintance] for 25,000 who asked him to deposit it in his non-profit account then wire the money to him in Japan. The person promised after he recieved the money he would make a donation to his non-profit.

MY friend deposited the check in his non-profit account. BOA put a hold on the check for a week [because it was a significant amount] then when the funds were available my friend wired the money to Japan to this person.

Well a few days after the wire to Japan. BOA called my friend to say the check was no good and the person to the account is not to be found. Japan bank says they refuse to wire back the money. BOA released the funds before securing them from the PA account.

My friend is now being sued by BOA for the 25,000+
Any suggestions for this sticky situation? ...thanks

My friend is now being sued by BOA

My response:

This same, or similar, type of scam has been played out 100's of times on these forums. Your friend remains the "Holder in Due Course" until that check clears. Since it didn't, your friend is "on the hook." In other words, he's screwed.

Obviously, your friend fell for the scam due to his own greed.

IAAL

[lipservice]

This is a non-profit does that change anything? He is the director. Can they bank sue the non-profit? Also the amount of the check was for even more than 25,000, my friend won't tell me the exact amount, but near more like 100,000.

There is the issue that BOA also wired the money to Japan. It seems that the bank should have some liability as it was at their discretion and risk to wire without sufficient funds in the account against the check that was not fully cleared.

As to the director of the non-profit's greed; hardly the non-profit's work is a exemplary medical research foundation.

[Who's Liable?]

Originally Posted by lipservice

This is a non-profit does that change anything? He is the director. Can they bank sue the non-profit? Also the amount of the check was for even more than 25,000, my friend won't tell me the exact amount, but near more like 100,000.

There is the issue that BOA also wired the money to Japan. It seems that the bank should have some liability as it was at their discretion and risk to wire without sufficient funds in the account against the check that was not fully cleared.

As to the director of the non-profit's greed; hardly the non-profit's work is a exemplary medical research foundation.

Tell you what...

I'll send you a check for $50K, and you wire me $40K... and I PROMISE the check will clear... Plus you get to keep $10K for wiring me the rest!!!

[zippysgoddess]

Let's cover this rationally shall we?

Why on earth would anyone think that a perfect stranger would trust them with a large amount of money like that?

Think about it, it should have been a huge tip off right there, that something was up.

Sorry, your friend is stuck, he is in hock to the bank for that nice large chunk of change. No, the bank is not responsible, sorry.

[lipservice]

I was hoping that there was some legal experts. The commentary is weak and certainly not legal. It appears that there are no banking legal experts on this forum.

[zippysgoddess]

How thick is your skull? You have your answer, there is nothing your friend can do, he is responsible for the money to the bank, and that is it. If you don't want to believe us, go pay for a lawyer and find out the same thing.

[Veronica1228]

Originally Posted by lipservice

I was hoping that there was some legal experts. The commentary is weak and certainly not legal. It appears that there are no banking legal experts on this forum.

The legal answer is that Bank of America is not responsible for this situation because per Reg CC they HAD to make the funds available to your friend within a certain amount of time even if the funds were not yet collected from the drawing bank. Therefore, your friend (or his company or whatever) IS liable for this fraudulent check, as everyone else on this thread has explained to you.

I hope this answers your questions and makes the whining stop.

[lipservice]

Since the money was wired to Japan after the five day hold, it seems that section 229.13 and 229.33 have been violated.

Section 229.13 Exceptions
Provides certain safeguard exceptions to the availability schedule for new accounts, large deposits, repeatedly overdrawn accounts, emergency conditions, and other circumstances.


Section 229.33 Notice of nonpayment
States that paying banks are required to provide notice of nonpayment to the depositary bank on all returned checks of $2,500 or more. This notice is to be received by the depositary bank no later than 4:00 p.m. local time on the second business day following presentment.

[Veronica1228]

Originally Posted by lipservice

Since the money was wired to Japan after the five day hold, it seems that section 229.13 and 229.33 have been violated.

Section 229.13 Exceptions
Provides certain safeguard exceptions to the availability schedule for new accounts, large deposits, repeatedly overdrawn accounts, emergency conditions, and other circumstances.


Section 229.33 Notice of nonpayment
States that paying banks are required to provide notice of nonpayment to the depositary bank on all returned checks of $2,500 or more. This notice is to be received by the depositary bank no later than 4:00 p.m. local time on the second business day following presentment.

Reg CC was written to put a limit on the max number of days a bank CAN hold funds. It does not dictate that they MUST hold the funds until the check is collected. You are looking at it the wrong way.

Also, you didn't state who the paying bank is, but it may not matter. Fraud is one exception to Section 229.33 since it cannot always conform to that deadline.

No matter how many sections you throw at me the answer stays the same. As Zippy stated, if you don't believe us go hire a lawyer. Let us know what happens.

[lipservice]

okay, I let you know what happens with the lawyers ect.....

[Who's Liable?]

Originally Posted by lipservice

okay, I let you know what happens with the lawyers ect.....

You do that... and while you're waiting to hear back from the lawyers, make sure you cash the $50K check and send the $40K to me here at:

1059 E. Scam Lane
IScrewYou, Japan
020651

[lipservice]

We just found out that the depositary bank [BOA] was notified 2 days after the deposit that the there wasn't any account for the check. [obviously check fraud].

BOA didn't notify my friend about the check being returned. Comerical Code Section 4202 states that the customer must be notified immeditely if a check [especially this size] is returned.

In addition, my friend just found a receipt given at time of deposit from BOA stating that the funds would be available on 11/08. The wire went out on 10/26

BOA proceeded to wire the 100K to Japan 4 days after receiving notice that the check was no good and the bank's receipt stated that the funds would be availiable on 11/08.

Are the blatant facts enough to assume that it is the bank's negligence, and that the 25k should be returned to the non-profit account. And the 100k check fraud is the banks problem?

Advice is greatly appreciated, however the silly responses diminish the quality of this site. Please respond only if you are a lawyer and know about banking laws. thank you

[Veronica1228]

Originally Posted by lipservice

Please respond only if you are a lawyer and know about banking laws. thank you

Well, that leaves me out. Although I know banking laws since I'm in the industry, I am NOT a lawyer. I guess you'll have to go pay an actual attorney for advice.

Have a nice day.

[Who's Liable?]

Originally Posted by lipservice

We just found out that the depositary bank [BOA] was notified 2 days after the deposit that the there wasn't any account for the check. [obviously check fraud].

BOA didn't notify my friend about the check being returned. Comerical Code Section 4202 states that the customer must be notified immeditely if a check [especially this size] is returned.

In addition, my friend just found a receipt given at time of deposit from BOA stating that the funds would be available on 11/08. The wire went out on 10/26

BOA proceeded to wire the 100K to Japan 4 days after receiving notice that the check was no good and the bank's receipt stated that the funds would be availiable on 11/08.

Are the blatant facts enough to assume that it is the bank's negligence, and that the 25k should be returned to the non-profit account. And the 100k check fraud is the banks problem?

Advice is greatly appreciated, however the silly responses diminish the quality of this site. Please respond only if you are a lawyer and know about banking laws. thank you

"I see" said the Blind man to the deaf woman.