How could two banks miss $175K stolen from a senior?

by Dan Rodricks

I can’t imagine being employed as a bank teller and accepting check No. 6602, for $175,000, drawn on the PNC Bank account of a Maryland woman named Myrle Bratcher and made out to a Chinese technology company.

I’ve seen the check. It’s as sketchy as they come. The handwriting is strange — the crooked block lettering used to fill out the name of the payee and the amount of the check are distinct from the signature. The memo line says, “home renovation,” also in block letters.

So think about that: A check for $175,000 made out to a foreign-sounding technology company for a “home renovation” for a woman in Finksburg, Md. And the teller at a JPMorgan Chase branch in New York City — or the bank manager, or somebody else — apparently accepted it.

And PNC Bank went along with it, too. The money was deposited to an account at Chase on March 2, 2021, and the funds posted 11 days later. The money then was moved to some other account, according to a report by a detective with the Westminster Police Department.

This appears to be a case of check theft and forgery, a form of the widespread elder fraud that now accounts for at least $1 billion in annual losses nationally, according to the FBI.

I understand that scammers are working 24/7 to steal from seniors. But I’m scratching my head about the banks in this case. After an obviously suspicious check showed up for deposit, did no one at either Chase or PNC throw red flags?

Bratcher is 87 years old and she had lived in a retirement community in Carroll County before $175,000 disappeared from her account.

That money, representing the proceeds from the 2020 sale of her house and most of her savings, might never be recovered. Bratcher can no longer afford to live in the retirement community; she now resides with a niece in Reisterstown, according to her son, Eric Bratcher.

Mrs. Bratcher sometimes signed blank checks for people she trusted and who did things for her. That raised concerns of some friends and employees of the retirement community. Her son believes that someone used one of the signed checks to make the theft. That someone, Eric Bratcher speculated, might have known the balance of his mother’s account and filled out the check for an amount that would not cause an overdraft.

Nicholas Bonadio, of the law firm Keilty Bonadio, and attorney Charles G. Bernstein have been pursuing relief through civil channels. But wait until you hear this part.

What do you suppose is the Bratcher family’s recourse? Can Mrs. Bratcher and her son hold PNC responsible for not taking what’s known as “ordinary care” to protect her account? Could PNC be responsible for the loss she suffered?

In a word: doubtful.

Will the Bratchers be able to sue? Not likely.

According to the fine print in the agreements that most of us have with most banks, we are required to go to arbitration, and not the courts, to seek relief. Consumer groups have tried to change the federal rules regarding this, arguing that all of us deserve our day in court, but banks and other corporations have prevailed in limiting disputes to arbitration.

And the rules of arbitration are stacked in favor of the banks, says Bonadio. He’s already been made aware of PNC’s position, and it’s not exactly sympathetic.

“The bank is saying that, because Mrs. Bratcher’s signature is on the check, because she signed a blank check, that, once she did that, the bank doesn’t have to do anything,” says Bonadio. “Regardless of who fills it out and how they fill it out, unless the bank is on notice that the alterations have been made without authorization of the account holder, and the bank is acting in good faith. Essentially, as long as the bank doesn’t know the client is being defrauded — the bank has no duty to exercise due diligence. They have the right to honor the check, pay the check and that’s that.”

But Bonadio argues the bank did not take “ordinary care.” Bank staff could have looked at Mrs. Bratcher’s account history — the average amount of her checks over the previous 12 months was about $200 — and they could have considered the obvious: Most people don’t write single checks for 85% of their account’s total value.

“When you factor in the measures the bank would have to take to prevent this kind of fraud, it’s a pretty low bar,” Bonadio says. “It could have been accomplished with a phone call. … The damage is so substantial and tragic, it’s unconscionable to me that the bank is going to say, ‘Tough’ … when they could have prevented it so easily.”

Dan Rodricks is a long-time columnist for The Baltimore Sun.