Can you sue the Bank if somebody Embezzles from you?

An embezzlement case before the Connecticut Appellate Court this week may more clearly delineate the rights of account holders and the responsibilities of banks, but whatever the outcome, one thing is clear: business owners, pay attention to your bank statements.

In 2012, a New London County jury found that Bank of America was 95% responsible for damages suffered by St. Bernard School after an employee embezzled more than $800,000 by setting up a secret account with Fleet Bank, later acquired by Bank of America.

According to published reports, the embezzlement began in 2002 when Salvatore R. Licitra Jr., 47, formerly of East Lyme, set up a bank account named “Saint Bernard’s High School Norwich Diocese Camp Sunshine, c/o Sal Licitra.” He used this account to accept checks from third parties as well as to divert money from legitimate St. Bernard’s accounts via checks which were sometimes unendorsed. Additionally, he created fraudulent bills and paid them with legitimate St. Bernard’s checks made out to the Camp Sunshine account.

The embezzlement continued through Bank of America’s 2004 acquisition of Fleet Bank and up until Licitra lost his job in 2006. After the scam was discovered in 2007, he was arrested.

St. Bernard then sued the Bank of America claiming that the embezzlement was due to the negligence of Bank of America. The bank claimed that St. Bernard had waited too long to make its claim under the terms of its deposit agreement with the school. James Devine, the trial judge, ruled that the time limit cited by the bank was in fact a violation of Connecticut’s state laws which say banks owe their customers a duty to keep their money safe. The Bank of America has appealed this decision, and arguments will be heard this week.

Regardless of the outcome at the Appellate Court, business owners from sole proprietors to bigger businesses should heed the underlying message: even if you have a bookkeeper, pay close attention to your bank statements and keep close tabs on your checking account.

If you have any questions contact the

Law Offices of Gregg W. Wagman at:
70 Howard Street Suite C
New London, CT 06320
860-444-0100 office

wagman@attorneywagman.com

Serving the Eastern Connecticut region including the Northeastern towns of Thompson, Putnam, Brooklyn, Colchester, Willimantic, Marlborough, Lebanon and Plainfield and the Southeastern towns of Old Saybrook, Old Lyme,East Lyme,Waterford, New London, Groton, Salem, Ledyard, Montville, Mystic, Norwich, Voluntown, Preston, Stonington, North Stonington and New London


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