13 Apr No Comments MikeT Checks Forged, Expert Matters

Facts: The bookkeeper of a small corporation located in Somerset County, New Jersey embezzled a substantial sum of money by means of three different fraudulent schemes. The first scheme involved creating a series of checks drawn on the corporation’s business checking account at a large regional bank. He made the checks payable to himself or to his company and forged signature of the president of the corporation on the checks and depositing the checks into an account in the name of his company at another bank. In the second scheme, he created checks payable to a legitimate vendor, induced the president of the corporation to sign the checks and then deposited the checks into his company’s account at another bank. In the third scheme, he stole legitimate checks payable to the plaintiff corporation, forged the plaintiff’s endorsement on these checks and deposited the checks into his company’s account

Testified For: The regional bank.

Subject of Expert Report: Whether the regional bank acted in good faith and with ordinary care and in accordance with the reasonable commercial standards of the banking business by virtue of (1) its selection of only checks in excess of a certain dollar threshold for visual examination of the drawer’s signature and the comparison of that signature to the specimen signature on file at the bank prior to payment and (2) paying checks deposited at another bank that were drawn on the plaintiff corporation’s account at the regional bank that did not bear endorsements of the named payees.

Outcome: The case was tried before a jury who returned a verdict in favor of the regional bank. The plaintiff corporation appealed and the appellate court affirmed the jury verdict.