On 7/27/2020 4:50 PM, Dale Alspach wrote:
I would not put much faith in requiring two signatures. It is unlikely that
the bank is actually paying any attention to this requirement. I learned
this from a former bank employee who was on the board of a nonprofit I work
with. In other words it is an internal control only.
Not quite.
You are perhaps confusing whether it would be caught at the time or only
detected later. I am pretty sure that if an organizational bank account
had a two signature rule and the bank allowed processing of a check with
only one and this was a case of embezzlement, the bank would end up on
the hook for it, not the organization (or their insurer).
Note that this might or might not be to the organization's benefit,
especially if this check only a fraction of the total embezzlement.
Quite often embezzlement cases are resolved with "deals", no or reduced
jail time in exchange for getting money back*. But all parties must
agree to such deals. Can be acrimonious. I speak from experience (an
organization of which I was/still a member). One side "we want her to go
to jail" vs the "but if we agree to the deal we recover another $100,000
back".
In the case above, although no two signature rule, the (local, small
town) bank agreed should have been suspicious and their part of it was a
no interest loan for the period of probation during which the embezzler
was slowly paying some back.
Michael D Novack
* You are perhaps thinking only of assets the embezzler has in his/her
name. Not those the embezzler's spouse/family might be willing to part
with to keep the person pout of jail. Or what the embezzler might be
able to pay over time. Again in the above case, the family knew
something because measures taken that family assets NOT in her name. And
they were unwilling to surrender them to keep her out of jail.
Apparently not first time.
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