Wire transfer & ACH fraud litigation

Business email compromise, account takeover, altered payment instructions and employee misconduct can produce different factual and legal questions. An authorized employee deceived by a fraudulent invoice presents a different issue from a criminal transmitting an instruction through stolen credentials.

We examine who initiated the transaction, what authority that person had, how the instruction was approved, what the bank received and what happened during processing. That record provides the foundation for evaluating the claim, available defenses and potential recovery.

For funds transfers within its scope, Article 4A of Minnesota’s Uniform Commercial Code provides a framework for determining the parties’ rights and obligations.

Minnesota Statutes § 336.4A-202 addresses authorized payment orders and orders that may become effective against a customer through an agreed security procedure. Where a bank relies on that procedure, the analysis includes commercial reasonableness, good faith and compliance with the agreed procedure and applicable customer instructions.

The surrounding provisions also matter. Section 336.4A-203 addresses circumstances in which certain verified orders remain unenforceable against the customer, while § 336.4A-204 addresses refund obligations for qualifying unauthorized orders.

We evaluate the applicable statutory requirements alongside the agreements and evidence of how the challenged transaction was handled.

An ACH dispute requires identifying whether the entry was a credit or debit, the transaction classification, the account types and the roles of the originating and receiving financial institutions.

We examine the applicable law, treasury-management and account agreements, relevant Nacha Operating Rules, and any governing payment-system provisions. The legal framework depends on the particular transaction and the relationships among the parties.

The analysis also includes whether federal consumer-transfer protections affect any part of the transaction. Minnesota Statutes § 336.4A-108 addresses Article 4A’s relationship to the Electronic Fund Transfer Act. Identifying the relevant accounts and payment channel is therefore part of determining which rules govern.

The defense of a payment-fraud claim often requires reconstructing the transaction from several sources. We assess the agreed controls alongside the records showing how those controls were used.

Relevant materials may include:

• Account and treasury-management agreements, security elections and service setup records.
• User authority, approval permissions and authentication records.
• Original payment orders or ACH files, change histories and release records.
• Relevant alerts, reviews, overrides and callbacks.
• Customer instructions and communications with the bank.
• Notices of suspected fraud, return or recall efforts and subsequent processing records.

We help organize that evidence into a reliable chronology and assess its significance under the governing legal standards.

A financial institution may need to address a customer demand while investigating the transaction, communicating with other institutions and evaluating whether funds remain recoverable.

We assess the bank’s position, the requested relief, available defenses and potential claims against other parties. The timing and feasibility of recovery depend on the payment status, the location of the funds and the applicable procedures.

Where the bank has viable claims involving diverted funds or recipients of transferred assets, our fraud litigation and asset recovery practice addresses the available remedies. Where a payment-fraud dispute overlaps with a lending relationship, we coordinate the response with our lender liability defense practice.

Contact Matthew Bialick to discuss a commercial wire transfer or ACH fraud matter involving a financial institution and arrange a conflict check. Useful background generally includes the disputed transactions, governing agreements, relevant security procedures, processing records, customer communications and the timeline of discovery and reporting.

Contact Matthew
952-239-3095
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