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Personal injury firm sues TD Bank after loss in fraud scheme

By Debra Cassens Weiss

August 29, 2024, 12:19 pm CDT

A personal injury law firm has filed a lawsuit blaming TD Bank for its loss of about $146,000 in a check fraud scam.

The July 23 suit, removed to New Jersey federal court Monday, alleges that TD Bank should have warned New Jersey firm Nagel Rice about the cashier’s check that it deposited from a bank called BBVA because of a history of fraudulent checks claiming to be drawn from that institution.

Law.com has the story.

According to the suit, Nagel Rice received a cashier’s check for $148,950 from a purported client supposedly drawn from BBVA and deposited it in the firm’s account with TD Bank on Nov. 23, 2020. About two days later, Nagel Rice wired $146,250 to the bank account of the purported client.

On Dec. 1, 2020, Nagel Rice received a letter in regular mail from TD Bank dated Nov. 25, 2020. The letter advised Nagel Rice that the cashier’s check had bounced. Nagel Rice lost the entire amount wired to the client.

The suit alleges that the bank was negligent because of its failure to warn, and it violated a contractual banking relationship in which it agreed to safeguard Nagel Rice accounts.

Law.com described Nagel Rice as a high-profile personal injury firm that has many top verdicts and settlements in a list published by the New Jersey Law Journal.

Many other firms have lost money in similar scams, including several in New Jersey. The FBI warned about such scams in 2010, telling lawyers to beware of cients who make contact only by email, especially if they reside in foreign countries.

In one version of the scam, a purported client wants help collecting a debt, but the matter is quickly settled and the firm receives a phony check for the settlement money. The firm keeps a fee and wires the rest to the supposed client, only to find out later that the check has bounced.