I got such good responses from my last post(just like I told my manager I would), my manager asked me to ask another question about a different customer. We have a customer, let's call him Joe, and he hired a bookkeeper, lets call her Jane, to do payroll for him. Joe had a system in place where during payroll he would sign the (Blank) checks and then give them to Jane to fill out the amounts, names, and everything else. Jane decided that it would be nice to use these signed checks to pay for other things like her personal car payments, rent, and pretty much anywhere they would take a check. One day Joe realizes there's no more money left in his account and finds out where it all went. As far as we, the bank go, is there anyway we can get any of this money back? Or is this more of a civil matter? These checks go back over a year and my manager isn't sure if we can return any of the checks (because Joe did sign them) and how far we can go back on returning these checks if we can return any... Thanks again, you guys are great!

This situation is entirely a civil matter between Joe and his bookkeeper. The bank cannot return the paid items, and has no responsibility to reimburse the customer since they are not forgeries.

Tell Joe to hire a good attorney and suggest he stop payment on any items he gave Jane that haven't cleared.

However, you should also tell Joe that even if the bank stops payment on a check that's "out there," if it's been taken by a holder-in-due-course (and innocent holder who took the check for value, with a few other technical details thrown in), he (Joe) will likely have to make good on those checks, anyhow.

Your bank has no responsibility for Joe's total lack of business common sense, unless you took one of the checks in question in payment for one of Jane's obligations to you.

I'm not saying that the bank would definitely be liable. However, if a check were taken in payment of Jane's obligation, depending on a few things there might be a possibility the bank could be reached for that amount because it would have reason to notice the unique nature of the transaction. A slim chance, but a chance.