What's the point of having checks at all instead of just mailing cash, if stolen checks can be fraudulently cashed with no recourse?
So he received the checks and mailed them to his bank but they were intercepted in the second leg and cashed out. Sounds like the fault is with the banks that cashed out the checks without adequate verification.
Something's off here. IANAL, but I think the law is pretty clear that the bank that pays the forged endorser is on the hook for the loss. Maybe the checks were made out to cash or left blank, which if true seems like it would be clear negligence on the part of Paychex.
>In a court filing, it tried to wipe its hands of the matter, claiming that it had no fiduciary responsibility to Mr. Handy and that he had taken possession of the checks before the thief stole them.
Doesn't looks as clear cut as the title makes it to be.
> Without knowing the type, nobody can tell the I.R.S. later on what taxes to collect, if any, or tell the participant what he or she may owe. And guess what. With paper checks, you can just put words on them that help explain or signal what kind of account the money came from and where it’s supposed to end up.
Oh the irony.
How often is this happening? If criminals are aware that 401k transfers are done using cheques in the post, and some of the addresses these are typically sent to, then I'm expecting this to be a very common type of fraud. Yet the practice of 401k cheques in the mail continues? Weird.
Seems straightforward to track down who cashed it and with what entity, and issue another check or do a wire transfer.
A couple of hinky issues here --
The statement from Mr. Handy indicates an amount of $114,000. That's very significant. However, the NYT mentions only $14,000. That's still a large number but, you know, an order of magnitude smaller. Where's the other $100K?
Also, what about enhanced scrutiny for such a large deposit/withdrawal? Aren't banks supposed to file extra paperwork if you're exceeding $10,000 or something? What happened, did the thieves go to an idiot branch or ATM or something? Can you drop into the CHECKS CASHED store on the corner in the ghetto and have your $14,000 [$114,000] worth of fraud?
Once when I took a girlfriend to see a film, we returned to find the car door slightly ajar. She had left her purse on the floor and it was still there. All good? Weeks later, it turned out that someone fraudulently filled and cashed a check that belonged in her checkbook. They had entered my car, found her checkbook, extracted the last one in the book sequence, and replaced everything without a trace. It's true that you need to safeguard your checks!
In Mr. Handy's case, what type of checks were they? Like an ordinary bank draft? There are cashier's checks and money orders too. You'd think that if this was such an important financial transaction that we'd be working with cashier's checks and certified mail. It also strikes me as so weird that they expected Mr. Handy to essentially be the middleman to receive checks he couldn't cash. They weren't made out to him! Why mail checks to him like he's a third party or mule!
Yes, NYT, this would've been far better accomplished by electronic means. There are a lot of things in your article that don't add up. Are we entirely sure that Mr. Handy is telling the whole truth here? Surely there are more irregularities to be uncovered!
The fact that this was a rollover doesn't seem particularly relevant? I must be missing something.
Imagine I write a check and send it to a friend, but a thief intercepts it and cashes it.
First, this is fraud, meaning a criminal matter to be referred to the police. Surely the bank has records of exactly who cashed the check, and it would be trivial to file charges against the offender?
Secondly, the bank's inability to correctly authenticate the person cashing the check surely puts the financial responsibility on the bank, not the owner of the account?
What happens with check fraud normally? If someone writes a fake check and successfully withdraws money, isn't the bank liable?