How long after a check has been paid do you have to return it as fraud?

Depends on what is wrong with it.

A customer has recently noticed that a couple of checks were cashed and were not written by him and wants us to return them now after 4 years as fraud.

You'll have to check your UCC but normally the statute of limitations is three years.

Oops! If the customer is claiming that checks drawn on his account were paid but not authorized by him, that's a one-year statute of limitations in most states. See your state's version of the Uniform Commercial Code, section 4-406(f) -- numbering may vary from state to state.

In addition, you may be able to shorten that one-year period by contract.

Well, I suppose since you use the verb "try", in theory one could "try" returning anything, anytime, and hope the depositary bank doesn't cry "Foul". But am I missing something in the conversation? If this is simply a matter of forged signature, it would seem that the midnight deadline applies, and the real question is whether your customer can demand reimbursement from the bank for wrongful payment. (And after 4 years, I'm thinking just about any state would say, "Nah.")

Or am I misunderstanding the question?

The bank has until midnight to return for fraudulent signature, the customer has 1 year to legally request compensation from his bank. I'm not aware of any statute that allows for a claim after 4 years. Of course, depending on the relationship, his bank may choose to reimburse, regardless of time that has passed.

John - oops - I'm getting old and need to stop making off the cuff responses without looking them back up I guess

Could I interject my own situation into this question? I recently was made aware from a customer that checks that were presented to us last month were fraudelent. The culprit took our bank routing number and our customer's account number and applied it to a series of checks that were subsequently all paid. Our customer realized this in their recent statement. Do we (my bank) have the ability to send the checks back as contefeit or is it too late to return?

Sorry, but you have the midnight deadline to contend with. If you don't follow that rule your bank has to 'eat' the cost.

depends if the item is remotely created or not. If remotely created, the BOFD has some liability now related to these type of checks. I don't have a link, but you can search in BOL forums, John B. has done a post about it already. If a true forgery (fake signature, etc), sorry, midnight deadline is yours to deal with.