A San Antonio physician alleges in a lawsuit filed Friday that Frost Bank allowed certainly one of his workers to fraudulently divert about $300,000 from his dermatology observe.
Frost Bank breached its responsibility of care by accepting greater than 300 checks made out to Dr. Steven A. Davis’ dermatology observe however deposited in one other account, the lawsuit states.
In May, Davis demanded Frost return the cash it paid out, however the bank refused, the go well with says.
Davis seeks a judgment towards San Antonio-based Frost for the observe’s precise damages, plus curiosity, attorneys’ charges and different prices.
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“We typically don’t comment on pending litigation, and it’s our policy not to discuss customer matters publicly,” Frost spokesman Invoice Day stated.
San Antonio lawyer Ricardo A. Cedillo, who represents Davis, declined to remark.
In line with the grievance, Davis and colleagues from the College of Texas Well being Science Middle at San Antonio organized a regenerative drugs symposium in 2012.
Davis consulted with Frost on the way to deal with sponsorship funding for the “one-time, non-profit educational event.” Frost suggested him to open a short lived deposit account within the symposium’s identify that the bank would shut after the occasion, the go well with says.
The occasion was held in March 2012. Inside six months, although, the go well with says a Davis worker started utilizing the symposium account to fraudulently divert cash and checks from the enterprise.
The worker was not named within the grievance and has not been criminally charged.
Davis uncovered the diversion in March.
“Frost Bank negligently accepted more than 300 checks payable to (Davis’ practice) as payee and deposited them into the symposium account,” the go well with says. Not one of the “diverted checks” was made payable to to the symposium as payee.
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“Each diverted check bore either a manual ‘for deposit only’ endorsement, or an alteration of the dermatology practice’s deposit stamp that crossed out a legitimate account number and inserted the symposium account number,” the go well with says.
Every of the endorsements was achieved within the worker’s handwriting and didn’t have Davis’ signature or initials, the grievance says.
“All deposited funds were rapidly drained in the symposium account by the embezzling employee,” the lawsuit provides. The worker diverted $300,387 from the observe to pay private bills, it says.
Davis blames Frost for failing to shut the symposium account. As well as, he by no means obtained any symposium account statements within the mail, the go well with says. However it additionally referenced Frost’s “paperless” communication.
“Despite Frost’s paperless push and assurances that its technology better enables customers to keep a watchful eye on their finances, neither the emails distributed by Frost, nor the online dashboard gave Dr. Davis any indication that the symposium account remained open beyond the summer of 2012,” the go well with says.
The lawsuit was filed in state District Courtroom in San Antonio.
Patrick Danner Patrick Danner covers banking, insurance coverage, enterprise litigation and bankruptcies. To learn extra from Patrick, turn into a subscriber. email@example.com | Twitter: @AlamoPD