TRC Operating Company Prevails in Cyber-Theft Case in Settlement

0 By yourmoneyisnotsafeinthebank

TRC Operating Company Prevails in Cyber-Theft Case in Settlement with United Security Bank of Fresno

Readers will recall CLASP’s initial efforts to assist California based TRC Operating Company in highlighting awareness of their particular situation, and of the issue of Corporate Account Takeover (CAT) in general in a series of media articles, and on the CLASP site here.

Recap

“As TRC Operating Company established itself in an oil industry dominated by much larger corporations, it consciously chose to maintain its banking accounts at United Security Bank of Fresno (USB), a local financial institution, due to the personal relationships that had been developed between TRC and the USB bankers over the years. That all changed when over a period of 5 days, twelve (12) fraudulent wires (Totaling $3,450,670.00) were wrongfully processed through TRC’s accounts at USB in November 2011. Ultimately, $299,600.00 went missing from TRC’s corporate account at USB. USB denied liability despite numerous ‘red-flag’ indicators that the wire transfers were fraudulent. To bolster their position, USB retained an out of state security analyst who flew to California under the guise of an unbiased investigation. Promptly thereafter, the security analyst prepared an ‘Incident Report’ which contained misrepresentations and material omissions,” said Charles Comfort, a co-owner of the company. Infuriated by the treatment they received from their longtime bank, United Security Bank of Fresno, and it’s President Dennis Woods, TRC Operating Company owners Tracy Rogers, Ronnie Rogers and Charles Comfort hired legal counsel to negotiate for the recovery their missing money. Due to USB’s refusal to discuss the matter and also refusing an offer to use mediation to resolve this matter without filing a lawsuit, TRC felt it necessary to file a lawsuit against USB for the principle of the matter knowing the law made it impractical to recover much more than $299,600. On May 17, 2012, TRC filed a complaint for damages in the Kern County Superior Court alleging that USB failed to offer a “commercially reasonable” security procedure to protect TRC’s funds and that USB failed to process the fraudulent wires transfers in “good faith.”

Resolution

“Nearly two years after litigation began; USB has agreed to pay $350,000.00 to TRC for its losses. The settlement offer came just a few days before the Kern County Superior Court was to rule on a summary judgment motion filed by TRC which, if granted, would have entitled TRC to the $299,600.00 plus substantial interest and a finding that USB failed to provide a ‘commercially reasonable’ security procedure for its online banking customer,” said TRC attorney Julie Rogers of the Dincell Law Group. “While TRC was in a financial position to hold USB accountable for its ineffective online banking, many other California businesses are not. All too often, a business hit by CAT cannot afford to hire legal counsel to sue its bank and either absorbs the loss or goes into bankruptcy. For this reason, TRC’s success against USB is something to appreciate and to celebrate, and perhaps most importantly, from which to learn,” concluded Karen McCarthy, President, YourMoneyIsNotSafeInTheBank.com