An Indiana commodities trader is suing Fifth Third Bank in Cook County Circuit Court after losing more than $1 million in an employee theft scam.
Ronald Manaster, 72, formerly of Illinois, is the founder and 80 percent owner of Eagle Market Makers. The company’s co-founder, James Aull, owns the remainder.
Manaster has alleged former EMM employee Joseph Tagler stole more than $1 million from his company by “forging account paperwork adding himself as an authorized signer on Manaster’s Fifth Third checking account, and then forging and cashing checks and fraudulently initiating wire transfers from that checking account.”
Though Manaster blamed Tagler for the scheme, he also faulted Fifth Third for “negligence, its disregard for commercially reasonable business practices, its failure to adhere to its own policies and procedures and its failure to properly supervise its employees.”
EMM hired Tagler in 2008 as an assistant bookkeeper. He was promoted to back office manager in 2009 and elected to the firm’s board in 2013. As back office manager, he was an authorized signer on EMM’s account. From 2009 to 2014, Tagler also acted as Manaster’s personal assistant, including preparing his personal bills for payment.
It also was in 2009 that EMM started to use Fifth Third for commercial banking. Manaster opened a personal checking account there at the same time. EMM conducted transactions at the bank’s branch at 601 S. Clark St., Chicago, less than 600 feet from the firm’s LaSalle Street offices.
Tagler visited the branch almost once a week, and purportedly became friendly with the bank’s branch manager. Manaster said Tagler and the branch manager met in person weekly from 2012-2014, regularly exchanged emails and, at least once, Tagler puprotedly bought the branch manager a gift.
In addition to their friendship, the Fifth Third branch manager handled Tagler’s personal banking, including mortgage applications and joint checking and savings accounts with friends and relatives. He had first-name-basis relationships with other branch employees, as well, which Manaster says Tagler exploited in pursuit of this theft.
Manaster alleges bank employees ignored Fifth Third customer protection protocol in order to keep EMM’s patronage. In November 2011 Tagler was supposed to close Manaster’s Fifth Third checking account to open a new account at Burling Bank. While he did open the Burling account, he also kept open the Fifth Third account and forged documents granting him signing power. The bank, Manaster said, “accepted the forged documents from Tagler without any further inquiry.”
From December 2011 to March 2015, Tagler deposited more than $1 million in EMM dividend checks into Manaster’s Fifth Third account. He also is accused of stealing $105,000 from Aull by forging his endorsement on dividend checks. The alleged scheme first came to light in March 2014 when Aull’s accountant noticed the discrepancy. Though Tagler admitted to stealing from Aull, he denied stealing from Manaster.
Within 36 hours of that discovery, Manaster and EMM told Fifth Third to deny Tagler access to accounts, and through reviewing documents the bank provided, they learned the extent of Tagler’s forgery and fraud. In February, Tagler was convicted of wire fraud and sentenced to 36 months in prison.
In his complaint, Manaster detailed Tagler’s withdrawal activities and bank employee relationships, noting several ways in which his behavior and account use should have drawn the attention of an institution that markets itself as “The Curious Bank.”
In his complaint, Manaster alleges four counts, including violation of the Fiduciary Obligations Act, improper payment in relation to state law, conversion and fraudulent concealment.
He has asked the court to award him damages at least equal to the value of alleged forged checks cashed by Tagler, or about $755,000, plus other costs, as well as additional discovery rights in light of his allegations Fifth Third Bank employees worked to prevent Manaster and EMM from discovering the full extent of Tagler’s alleged actions.
He is represented by attorney Richard Gleason, of O’Mara, Gleason & O’Callaghan, Chicago.