Thursday, May 2, 2013

Banks broke us, Collier County, Florida school says

A defunct Naples school has sued two national bank chains, claiming their actions contributed to the school’s financial ruin and closure.
Journeys Academy, a private, nonprofit school serving children with disorders such as autism, ADHD and Down syndrome, closed after its chief financial officer was accused in 2009 of embezzling $360,000 from the school. The accused, Larry Christopher, was indicted in federal court but died before he could serve time in prison. Now a lawsuit filed in federal court this month claims PNC Bank and Liberty Bancshares could have prevented the theft if they had better safeguards.
“They allowed a nonauthorized person to masquerade as Journeys Academy,” according to Tucker Byrd, an Orlando attorney representing the school.
But an attorney for the defense said there’s no way his client could have known.
Christopher allegedly made several unauthorized wire transfers from the school’s PNC account and deposited the money in a Liberty account he fraudulently opened in the school’s name, according to his federal indictment. He then withdrew that money for himself.
Byrd said the fraudulent transfers should have raised numerous red flags. PNC was in the habit of contacting Journeys directly whenever a large sum was withdrawn from its account, and Journeys had never before made a wire transfer. But no one notified the school’s administration when 43 such transfers were made in six months, according to the lawsuit.
Craig Goddy, a Naples attorney representing Liberty Bancshares, said there is no way his client or PNC Bank could have known Christopher’s dealings were fraudulent.
“I think Liberty did everything they could have done to make sure this didn’t happen,” Goddy said. “And basically as soon as Liberty found out about all this, accounts were shut down or frozen and ... what money there was returned to Journeys.”
Byrd said Christopher had drained the school’s funds.
Goddy couldn’t comment on Liberty’s specific procedures for verifying accounts, but said precautions were taken.
Christopher opened the Liberty account using a corporate resolution — a document that supposedly gave him authority to open an account in the school’s name. Goddy said there’s no way Liberty could have known the resolution was forged.
“It’s really not like someone came in off the street,” Goddy said. “This was a bad guy inside the company.”
Goddy filed a motion last week to dismiss the lawsuit. He expects a ruling on the motion in about a month.
Journeys filed the lawsuit in Collier County Circuit Court in March, but the case was since removed to federal court.
Miami attorney John Bustard, representing PNC Bank, declined comment.
Byrd said the school, which catered to children everyone else had given up on, collapsed after its bank account was emptied.
“The school was built on the promise to build character and encourage self discovery in students of all abilities,” according to the lawsuit, “and to inspire them to achieve more than ever thought possible.”

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