New Ohio Law Determines Banks Can Be Victims of Forgery

Today, November 21, 2019, the Ohio Supreme Court ruled that under Ohio law, banks can be considered “victims” of forgery and a court can order restitution to three banks where the defendant cashed seven checks.

In a 6-1 decision Ohio Supreme Court ruled that a bank, which is required by law to reimburse an account holder when it pays a forged check, can be considered to be a victim of a forgery crime.

R.C.2929.18 allows a court to order that the forger repay the bank. The decision reversed the ruling of the Franklin County Court of Appeals that banks are not victims.

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Justice R. Patrick DeWine wrote the banks “were the victims of Allen’s crimes under any plausible, common-sense understanding of the word ‘victim.’” Chief Justice Maureen O’Connor and Justices Sharon L. Kennedy, Judith L. French, Patrick F. Fischer, and Melody J. Stewart joined the opinion.

The Court majority noted that banks are liable under Ohio law for the payment of a forged check, and must reimburse the customers. As a result, the economic loss is on the bank, and not the account holder, the opinion explained. Allen was targeting the banks and successfully tricked them when he presented the forged checks to the bank tellers.

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Court Determines Banks are ‘Victims’ of ForgeryUnder R.C. 2929.18(A), a trial court can impose financial sanctions against a felony offender, which includes restitution to the victim in the amount of the victim’s economic loss. Because the victim is not defined in the statute, the courts looked to the word’s ordinary meaning. The Tenth District concluded that the account holders, not the banks, were the victims who suffered the direct economic loss when the money from the forged checks was deducted from their accounts. The banks were indirectly harmed when they reimbursed the funds back to the businesses whose accounts

Banks are different than insurance companies who payout on losses: “An insurer contracts to take on a risk. It does not become a victim merely because that risk comes to pass,” the opinion stated.