Legal Question in Banking Law in Maryland

Counterfeit Check

I recently sold my car over the Internet, and the buyer paid me with a cashier's check. The buyer over-paid me by $9,700, and informed me to simply wire him that amount via Western union. I waited a few days to make sure the check was legitimate, and then wired him the money. A few days after that, all my accounts at my bank (Tower Federal Credit Union) are freezed, and I am informed that the cashier's check was counterfeit. It took my bank a week to tell me is was fake, and I was using my account each day after I deposited the check. I am now faced with paying off the $9,700 because it can't be retreived since it was transfered through Western Union. My bank is treating me very poorly, and even gave me a hard time when I told them I reported the counterfeit check to the FBI and Secret Service. Is there any way I would be able to fight off the bank and contest the amount they are forcing me to pay?


Asked on 7/01/02, 1:22 pm

1 Answer from Attorneys
G. Joseph Holthaus III Law Offices of G. Joseph Holthaus

Re: Counterfeit Check

As to the purchase money check, ultimately the liability lies with the drawers bank, that is the person's bank upon which the purchase money check was written for the price of the vehicle. You have an action on this check against this bank.

Notwithstanding, you may also have a depositary matter to pursue against your bank. A question to be addressed is whether your depositary bank cleared the check, that is that the bank deposited the funds into your account without recourse and beyond any claim of recoupment. Once settled, the check becomes their liability as to any further encumbrances. Any evidence of dishonor during negotiation may, depending on the date of the stamp set upon the drawer's check and the particular banking institution that rendered such, affect the negotiability of this check.

My question is, "Upon what basis were you able to inform your bank that the check was fake?" And, more importantly, "What did the bank do upon your notice?" Moreover, where is the vehicle and what has been done to repossess it?

G. Joseph Holthaus

(410) 799-9002

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Answered on 7/07/02, 11:25 pm


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