Bank Employee Error. Is bank liable?

[dmcfadden]

Kentucky.

Bank teller accepts checks made out to my corporation and allows my secretary to deposit those checks into her own personal account without endorsement. Bank teller's response was that my secretary had stated that she in fact owned the business.

The bank manager has stated that the bank is liable and will return the funds.

During the same time period my secretary was making my cash deposits into her own personal account. Again she stated the cash deposits were from "her" business.

Is not the bank liable to return those funds as well even though they were in the form of cash?

 

[Dandy Don]

Bank is NOT liable to return the cash deposits since there is no way to prove where she got the cash from--which could be anywhere. You can't prove that they came from your company, so be grateful for whatever you DO get.

 

[dmcfadden]

Bank is NOT liable to return the cash deposits since there is no way to prove where she got the cash from--which could be anywhere. You can't prove that they came from your company, so be grateful for whatever you DO get.

Thanks for your reply. I will be grateful for whatever funds I get returned. Would your opinion change if I could indeed prove my secretary got the cash from my company?

The bank teller was accepting the unendorsed corporate checks made out to my company based solely on my secretary's representation that she owned the company. They also accepted the cash deposits into her personal account based upon the same representation....that she owned the company....

 

[Dandy Don]

Yes I would change my opinion, but you need documented proof and I have not seen that yet or at least your explanation does not mention that. A verbal explanation is only your word against hers and the court doesn't really know who to believe. She will lie and say that the cash came from somewhere else.

 

[dmcfadden]

Yes I would change my opinion, but you need documented proof and I have not seen that yet or at least your explanation does not mention that. A verbal explanation is only your word against hers and the court doesn't really know who to believe. She will lie and say that the cash came from somewhere else.

My documented proof consists of computer generated records which record all coins inserted into my vending machines. For instance, I can run a report which tells me that within one particular thirty day period these vending machines received $30,000 in coin. My own banking records will reflect that in that same thirty day period there was only $20,000 of coin deposited into my corporate account. This secretary of course was responsible for making these deposits. The secretary's bank account is at another bank. Her personal bank records would reflect deposits in the amount of $10,000 during that same exact time period. The sheer volume of coin being placed into her personal account caused the bank employees to ask the source of the coin. And again, as she did with the corporate checks, she stated that she owned the vending company.

 

[Dandy Don]

Congratulations to you for excellent record keeping. I was wondering--do the deposit slips at the bank show that the deposits were made in coin format or not? Is secretary's signature on the deposit slips?

I was trying to play devil's advocate and try to see what type of alibi or excuse secretary could come up with to get out of these charges, but it looks like there isn't one and the preponderance of evidence certainly makes her look guilty. Sue the thief and get everything you are due to receive!!

 

[divgradcurl]

Yes I would change my opinion, but you need documented proof and I have not seen that yet or at least your explanation does not mention that. A verbal explanation is only your word against hers and the court doesn't really know who to believe. She will lie and say that the cash came from somewhere else.

But that doesn't amke the BANK responsible for the cash deposits -- it just means that the OP can go after the secretary for the missing funds and have a chance of winning. The OP can't hold the bank responsible for the cash deposits -- the bank shouldn't have allowed deposits of the checks without authorization, so they are responsible there, but how would the bank know where cash was suppossed to come from?

 

[dmcfadden]

Congratulations to you for excellent record keeping. I was wondering--do the deposit slips at the bank show that the deposits were made in coin format or not? Is secretary's signature on the deposit slips?

I was trying to play devil's advocate and try to see what type of alibi or excuse secretary could come up with to get out of these charges, but it looks like there isn't one and the preponderance of evidence certainly makes her look guilty. Sue the thief and get everything you are due to receive!!

The secretary plead guilty to all the charges and is now serving jail time. The bank is willing to assume liability for the conversion of my corporate checks into her personal account. They are not willing to assume liability for the coin deposits. And yes, the deposit slips do indicate whether the deposit is in the form of check, cash or coin. The bank has admitted allowing her to convert the corporate checks into her personal account because she simply stated she owned the vending company. The bank also has stated they accepted the coin deposits believing she owned the company.

I'm just wondering how successful I would be in having the bank refund the total amount of the coin deposits.....

 

[divgradcurl]

I'm just wondering how successful I would be in having the bank refund the total amount of the coin deposits.....

You could certainly ask, but the problem is you can't trace where a particular coin came from like you can a check. She could have just emptied out the area under the cushions of her sofa and ended up with the coins, for all the bank knows.

The bank is willing to help you with the checks because it is clearly their error. However, with the cash, since there is no way to track a particular bill or coin, there could be the issue of what money in her account is money she stole from you and what money is actually hers lawfully -- the bank doesn't want to be the arbiter of THAT.

The bank may help you out if they want to keep you as a customer, but more than likely you'll need to file a lawsuit against the employee to get the money back.

Why isn't the police involved, or are they?

 

[dmcfadden]

You could certainly ask, but the problem is you can't trace where a particular coin came from like you can a check. She could have just emptied out the area under the cushions of her sofa and ended up with the coins, for all the bank knows.

The bank is willing to help you with the checks because it is clearly their error. However, with the cash, since there is no way to track a particular bill or coin, there could be the issue of what money in her account is money she stole from you and what money is actually hers lawfully -- the bank doesn't want to be the arbiter of THAT.

The bank may help you out if they want to keep you as a customer, but more than likely you'll need to file a lawsuit against the employee to get the money back.

Why isn't the police involved, or are they?

Yes, the police are involved and the secretary is now serving jail time. The bank actually inquired of the secretary the source of the funds since the coin deposits into her personal account was averaging $1,000 (one thousand dollars) per day. The secretary responded that she owned the vending company. Her actual and legitimate payroll checks were also being deposited into her personal account which clearly showed the vending company to be a corporation and the signatory on the payroll check was me. I'm not sure how her bank can accept liability on the corporate vending checks going into her account yet deny liability on $1,000 per day in coin going into her account after they had pointedly asked her the source of the coin. As a non-lawyer I am clueless, but it seems to me they would be responsible for every dime once they learned the checks, the coin and the cash belonged to a corporation and was being placed into a personal account.

 

[ALawyer]

You may have some recourse against your insurance company if there is a business owner's policy as many of these policies cover theft up to some dollar limit. The insurance company would also seek contribution from the bank as it enjoys subrogation rights, and the insurance company lawyers are very good at that sort of thing and might bring the rest of your claim along so you might get the balance beyond your insurance limit.

As for the bank being liable, it is usually a factual matter -- did they know and should they have known, and/or were they negligent and if so, were you guilty of negligence that contributed to your losses and failed to mitigate them and if so, when? Here, given the fact that she was depositing coprorate checks into her personal account at the same time as she deposited cash, I would say they were on notice. Who was on the resolution for the corporate account? WHAT DID THEY DO TO CHECK? (If she deposited checks in the corp and cash in hers, possibly different story.) Also, the statute and case law of your state will impact the strength or weakness of the claim.

You need a GOOD corporate litigator to assert the claim on your behalf. The bank's lawyers and/or its insurance company do not want to have to INCUR THE EXPENSE OF defending the case either and it is worth something considerable to settle and avoid litigation.