26 Feb No Comments MikeT Checks Forged, Counterfeit Check, Expert Matters

Facts:  The plaintiff law firm received from a new client what purported to be a cashier’s check drawn on a Canadian bank.   The foreign cashier’s check on its face claimed to be “payable through” a U.S. affiliate bank of the Canadian bank.  The U.S. affiliate bank listed on the face of the check did not exist.  The client directed the plaintiff law firm to deposit the check and wire transfer a substantial portion of the proceeds to the account of the client in Japan.  The law firm deposited the check and the next day reviewed its online banking statement and concluded that the deposited check had cleared.  The bank employee responded that “the funds were available.”  Believing that the deposited foreign cashier’s check had cleared, the firm wire transferred the funds.  The deposited foreign cashier’s check was subsequently returned unpaid by the Canadian drawee bank as a counterfeit.

Client: The plaintiff law firm.

Subject of Expert Report: Whether or not the defendant bank failed to act with ordinary care and failed to act in a commercially reasonable manner by not outsorting and manually reviewing large dollar foreign checks before forwarding the checks for presentment for payment to the foreign bank.

Outcome: The case settled during discovery.