Signer of $1M check still eludes authorities
CITYWIDE — A lawsuit regarding an unendorsed $1 million check from Los Angeles County to the Big Blue Bus, stolen from the US postal system and cashed in a Colorado bank, may soon be settled out of court.
In August of 2002, attorneys with Santa Monica and Los Angeles County successfully entered into a Colorado lawsuit between the two banks that handled and cashed the check worth $1,075,408.08. More than three years later, City Hall said it may settle the case by next week, according to Jeanette Schachtner, deputy city attorney.
However, Schachtner wouldn’t comment on the terms of the settlement until all parties sign off on it.
The lawsuit was originally filed in early 2002 by First National Bank of Colorado, which cashed the check, against Denver-based Robert W. Baird & Co. and Bank of America — the bank handling Los Angeles County’s account — to determine who is liable for the cashing of the fraudulent check.
Amy L. Nutter, public relations coordi-nator for Robert W. Baird & Co., said the case is in mediation and a resolution appears imminent.
First National Bank of Colorado didn’t comment.
Robert W. Baird & Co. had asked the lawsuit be delayed until US Postal Inspectors completed their investigation and found the culprits. However, the culprits were never found and the judge felt the result of the investigation would not change the liability of cashing an unendorsed check.
Schachtner has previously described the matter as an “open and shut case,” confident City Hall would receive its money.
Thomas M. Tyrell, the L.A. County attorney handling the case, said the banks would have an uphill battle in court trying to prove the money belongs with them. They would have had to show the county or the city were directly at fault for the check being cashed. According to Tyrell, the evidence didn’t suggest that.
Santa Monica first noticed the money was missing when it conducted a routine audit at the end of the 2001 budget. The same audit shows that two other checks totaling $67,000 from the MTA are also missing and are presumed stolen.
Renee Focht, public information officer for the U.S. Postal Service’s Los Angeles investigation division, said no suspects have been identified in the case, which remains open.
Postal inspector Mike McCarthy, who initially handled the case, said the theft of the $1 million check may be the work of an international ring that pays for unendorsed checks. The person unconnected to the ring steals the check and is given either a percentage of the check’s amount or a flat fee. Then, the network of criminals finds a way to cash the check.
Focht wouldn’t comment as to whether or not the U.S. Postal Service still believes an international ring may be responsible.
In the case of Big Blue Bus’ check, the thieves did all of their banking electroni-cally. The account set-up at Robert W. Baird & Co. was in the name of “Big Blue Bus Tours” and the signature card on file is the forged signature of John Catoe, the Big Blue Bus’ former director.
McCarthy advised when sending large sums of money through the postal system to send it via registered mail. Though it may take a little longer to arrive at its destination, anyone who handles the envelope has to sign for it.
Los Angeles County collects sales taxes earmarked for mass transportation and divides them among all the bus and rail operators throughout the county. Those checks, which tend to be six and seven figures, are routinely sent first-class through the postal system.
And while the county maintains sending large checks through the mail is completely safe, they have begun depositing large sums electronically for the Big Blue Bus.
Originally published in the Santa Monica Daily Press print edition on October 20, 2005. Read the original PDF.