Anton, an employee of Tango Fabrication, LLC, used stolen software and blank checks to print forged company checks on his home computer. Tango’s checkhandling process lacked audit controls, so Tango did not discover the forgeries for more than two years. By then, the series of forged checks totaled $446,000. When the scam was discovered, Tango immediately contacted Merchants Bank and requested that it recredit the account on which the checks were drawn.

Did Merchants have to recredit Tango’s account? No.

When a series of forgeries by the same wrongdoer takes place, the customer, to recover for all of the forged items, must discover and ______________ the first forged check to the bank within thirty calendar days of the receipt of the bank statement. Failure to ______________ the bank within this period discharges the bank’s liability for all similar forged checks that it pays before being ______________.

Here, Tango’s weak monitoring of its account meant that it did not ______________ the first forged item to Merchants until at least two years after it appeared on Tango’s statement.

This was well beyond the thirty-day deadline.