Apparently an employee at our local bank was able to see cashiers checks that hadn’t cleared and moved the funds into his account.
Who was he stealing from…the bank or the payee? Do banks have to monitor them and treat them as unclaimed property?
It happened over two years ago and so far there has been no prosecution… any idea how that could be?
The cashiers check is a legal obligation of the bank to make payment when properly endorsed and presented for payment. Generally if the original is lost or misplaced, the bank will require a security bond before replacing it. Essentially it’s as good as cash. Since the bank is still liable for payment, the theft was from the bank.
Generally most States require banks to escheat unclaimed funds to the State after a certain number of years. If the check is subsequently presented, the payment is made by the State.
Generally most prosecutors won’t bother pressing charges unless “lots of money” (or publicity) is involved. These crimes are really small potatoes in the overall scheme of things.
Also there may be some kind of deferred prosecution agreement in place, or the cashier is cooperating as a witness in a bigger or more complicated investigation. Or they may have simply dropped it in exchange for the cashier making restitution to the bank.
Occasionally when theft/embezzlement happens at private institutions and corporations they opt to handle it in other ways rather than in a way that makes what happened public, which is what a prosecution would do. They have their reasons for doing it that way. When they do prosecute there generally is up to 7 years before they have to. You’d be surprised at how often internal thefts are not prosecuted.
I have no way of knowing if that is what your bank is doing.
How did you find out about it?
What happens to unused cashier’s checks? Like if I had my bank make one from funds in my account, then didn’t use it for its original intent and deposited back into my account the next day. Is there a record of that cashier’s check, as there would have been in my regular checkbook?
I would imagine that bank would have some kind of log that on date T, I withdrew $X for a cashier’s check made out to Another Party, (equivalent to a cash withdrawal, plus maybe a fee for the check?), and then on T+1 I re-deposited it as unused. Or even if it was later the same day - I would expect both transactions to be logged. But does the bank record the payee of Another Party, or just the amount? Are cashier’s checks numbered?
Yes to all that. How long they keep records is another matter.
My first impression was to say that one would be stealing from the payee, as they are the owner of the funds, but my second impression is that this is a legal question I’m not qualified to answer.
Now, why no prosecution? That one’s easier. Lawsuits are a matter of public record, aren’t they? Imagine an employee embezzles a cashier’s check worth $X thousand. Imagine this is reported in the papers. Imagine explaining to your board of directors that a very rich customer ceased their $Y thousand relationship with the institution because they don’t trust you any more.
One more thing to clarify - personal checks can be verified by the bank it’s drawn on, for example they can call the account holder to verify that it is a legitimate check. But they cannot verify other bank’s checks. Cashier’s checks have a more centralized identification, and Bank A can verify that a CC drawn from Bank B is legitimate. I don’t know if it’s changed more recently, but there is a day or two lag in this, so a CC drawn the same day might not be verifiable to a computer system. However, you could of course sign a check you drew out to yourself as in this scenario.
That depends on what will happen if the bank is then presented with the cashier’s check that according to their records was already paid. If the bank will still pay it, then the bank is out the money. If the bank will refuse to pay it, the bearer is out the money. I don’t know exactly how cashier’s check work on a fundamental enough level, or the law surrounding them, to be able to say if the bank has a legal choice on whether to pay it or not.
If the cashier’s check has been destroyed, the calculus changes slightly. The bank will be out the cash still, but they’ll have cleared up a liability in the process and have the same net worth. Since the bank was given money to create the check in the first place, it isn’t out anything except the further investment income that could be generated by the cash needed to satisfy the liability. In that case, the criminal is ultimately more wealthy at the expense of the previous bearer, but it’s hard to say that they stole from them because the previous bearer was out that money regardless.
I guess that doesn’t answer the question at all. But it’s something to think about.
I used a cashier’s check to buy a car. The funds were ultimately drawn from my checking account. The bank simply guarantees payment. I think they either withdrew my funds in advance or froze them; I can’t remember which. But it was my money. If someone fraudulently cashed the check, they stole the money from me, not my bank.
The cashiers check method was just a semi-informed theory, thus the “apparently”.
That something happened is clear because the bank sent a letter to every account holder way back when.
The word I’m having a problem with is “most”.
I was in a city once where I needed a check for a purchase but there were no branches of the bank I use. We went to over 10 different banks and though I had cash in hand none of them would issue me a cashiers check because I did not have an account with them.
My bank won’t sell anyone without an account a money order. Which is odd seeing anyone can buy a money order at a Walmart, post office, or grocery store.
Yeah, I haven’t dealt with bank money orders in over a decade, but at the time they were treated identical to a cashier’s check. The only difference as far as the bank is concerned is that a payee’s name was mandatory on a CC, and a money order could be printed with someone’s name or left blank.
Anyone know why the limit on money orders is only $1000?
One time I tried to deposit a money order into my personal account. They had a conniption because it was made out to “cash” instead of to my name. Perhaps I’m aging myself but paying people with checks and MO’s made out to cash used to be a thing.
Money orders don’t really give a proper paper trail; it’s a laundering prevention thing.
Made out to “cash” is a bearer instrument, so anyone who possesses it can negotiate it. The teller didn’t know this, so they were confused.
Yeah but the limit was $1000 (and in some cases $750) as far back as the late 60’s. I’m not so sure the government was as concerned about laundering then as they are now.
The government wasn’t a big fan of money laundering in the 60s either. They’ve just gotten a little tighter about it. This particular limit became tighter just cause of inflation, so they didn’t have to do anything. It’s the equivalent of removing the 500 dollar bill (or 500 Euro note) from circulation except because laziness, in a kind of sideways way.
In my experience, nothing good ever comes from involving the courts. And to an outsider, the results are so /random/.
There was an employee, in a position of trust, stealing cash money (wages) from other employees at a company I worked for. And he was found guilty with no court penalty
The thing about very rich customers is that they understand that you decide to take someone to court or not depends on how you want to spend your money. You can spend money paying somebody to make statements and be a witness: or you can put the money into an investment or a nice holiday. Sometimes you have to prosecute or loose your security staff: sometimes you have to not prosecute or the union takes everybody out. Prosecuting just because a crime has been committed is a rookie move.