We have a business customer who we know has been out of the country for a few months. His business partner who has come into town from another state is managing the business (convenience store)during his absence. The business partner came in on a Friday, ten minutes before closing to deposit a personal check drawn on another bank supposedly written by the person out of the country in the amount of $60,000. He was depositing into his personal account and said it had something to do with buying property in Georgia. A hold was placed on the funds for 7 business days. The week during the hold, the branch manager was on vacation. Upon her return, she looked at the check and noticed it did not look like the signature and knew the man was not in the country. She was able to contact the customer by phone and he said "yes, he wrote the check" although he could not tell us what bank or the check number. Senior management does not want to release the hold because the customer also stated that he "signed a bunch of checks before leaving"

If we release the funds, is the bank liable after speaking to the customer? Do we have reason to not release the funds? We realize the check probably should not have been taken at the time, however we think that is why he came in on a Friday just before closing. Should we have the customer who is out of the county send us an email stating he wrote the check so we have this in writing. We also have seen the payroll checks are not being signed by the authorized person on the business account.

The reason this seems so strange for us is we know that the customer not in the US at this time is in Africa. He went to get his family out of Yemen due to violence there. I just don't know what to think.

The paying bank has until their midnight deadline to return a check with a forged drawer signature.

are you saying the manager contacted your customer who is in Africa & he said he wrote the checks ? if so, then there isnt a problem since he authorized them. but maybe I'm not following the story ?

You are correct, he did say over the phone he signed the check. (although we are pretty sure he did not) But there is no evidence of this conversation. I am wondering if we should ask for this in writing to cover ourselves?

The issue is not between you and him and anything he gives you is meaningless. The issue would be between the other bank that tries to return the checks and your bank. If the midnight deadline has passed, tell me again what is your risk on these items??

If this all makes you this uncomfortable, start closing accounts or refusing deposits.

The issue is we have placed holds in the past and after funds are released the check is returned and the released funds are gone. If the check was deposited on July 17th, what is the paying banks deadline? Maybe I should know this, I just have too many hats on these days.

The paying bank has until midnight of the banking day following the banking day of presentment to return a check. If the paying bank received the check for payment on July 20, it would have to return the check by midnight Tuesday evening, July 21. It's now the 28th, a full week later.

I was always told that the only person who can say its fraud is the person that owns the signature, if he is not claiming fraud, what is the problem?

What he tells the bank of first deposit doesn't mean anything. It is what he tells the bank on which the check is drawn.

The issue is we have placed holds in the past and after funds are released the check is returned and the released funds are gone.

Then either you didn't hold the checks long enough, it was returned for a different reason, or you accepted a late return.