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Marsha411JD, Attorney
Category: Legal
Satisfied Customers: 19690
Experience:  Licensed Atty, 29 yrs exp in the practice of law.
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Our company uses a payroll company to process our employees

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Our company uses a payroll company to process our employee's check. An employee cashed his check via the banking phone app that allows you to deposit your check, he then took the actual check and cashed it at a check cashing facility. This person was paid twice for the same check. The check cashing place is now coming after us the employer for the money as the check eventually bounced. Are we liable to pay the check cashing place even thought the employee did a fraudulent thing by cashing the same check twice?

Thank you for the information and your question. Absolutely not, and hopefully, you have reported the check fraud to the police and have informed the check cashing place of that. They have a cause of action against the employee for the fraud, but if the check was already paid and deducted from your account once, then you made good on the check. I guess this is another unforeseen reason why direct deposit might be preferable. Not something I ever really contemplated happening, but it certainly is an opportunity for fraud.

You may want to turn this demand by the check cashing place over to a local attorney who can respond on legal issues. The other option would be to pay the check again and then sue the employee (hopefully former employee) for all the damages you incur as a result of the fraud.

Please let me know if you need any clarification. I would be glad to assist you further if I can.
Customer: replied 3 years ago.

This happened a year ago is there a time limit on such things?

My goodness, well, the fraud could still be reported as the statute of limitations has not run. You could also sue the employee still if you paid and then went after them for damages.
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