Question

Suppose that Emmett impersonates a famous clown. He goes into an advertising agency and convinces the manager to issue a check to him in the name of the famous clown, purportedly as part of a fund-raising campaign for a nursing home for old retired clowns. If Emmett negotiates the check to a check-cashing store by forging the name of the famous clown, then the ad agency will be able to argue that the bank must reimburse the account because the bank paid a check on a forged signature.
True/False.

Answer 1

Answer:

The answer is: True

Explanation:

The requirements to cash a check are:

1. If you don't have an account in the bank, you must cash the check in person.
2. You must have a valid ID to be able cash a check, and the check must be payable to you or it must have been signed to you.
3. The account must have sufficient funds to cover the check.

In this case Emmett committed fraud since the check wasn't payable to him. But the check cashing store should have asked Emmett for a valid ID and checked the firm. Since they didn't do it properly, then the advertising agency can claim a reimbursement.