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#2221660 - 09/16/19 07:54 PM Not his business!!
Anonymous
Unregistered

We had a bad actor open an account titled John Smith DBA XYZ Company. John Smith had obtained a check (fraudulently) payable to XYZ Company and deposited that check into our institution. Now the company that wrote the check, along with XYZ Company are contacting our institution claiming the check was stolen and was not endorsed by XYZ Company.

Our account was opened in good faith (or so we thought) and we accepted the check as such. John Smith used most of the funds, transferring them to his own account at another institution. The funds have since been depleted from that bank.

What recourse does the Payee Bank have against us?

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#2221664 - 09/16/19 08:09 PM Re: Not his business!! Anonymous
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,685
Illinois
Your legal counsel will be the best source of answers to your questions and a lot will depend on state law and what documentation you relied on to conclude that John Smith had the authority to use the trade name XYZ Company. Also, was the check payable to XYZ Company, Inc. or just XYZ Company? Wass the bank presented with a properly filed assumed name affidavit or similarly required document to use a trade name in your bank's jurisdiction.

Laws vary by jurisdiction so we will not be able to answer your question with anything but speculation.
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