NEW YORK--(EON: Enhanced Online News)--The United States District Court for the Southern District of New York issued an injunction directing Bank of America, N.A. to release depositor’s bank accounts holding hundreds of thousands of dollars which Bank of America seized without justification or explanation.
“I thought maybe the government was trying to seize these … proceeds. But it’s not. It’s just the bank who’s conducting its own investigation. They don’t give an explanation. I’ve never heard of that.”
Orbital Publishing Group, Inc., a magazine subscription agent, maintained its bank accounts at Bank of America. Without any notice or warning, Bank of America stopped honoring checks written by Orbital and closed the accounts even though Orbital had more than enough funds to cover those checks. At that time, Orbital had over $400,000.00 in its accounts. Orbital only found out about Bank of America’s actions when vendors contacted Orbital because checks and other payments were being returned unpaid. At the same time that it closed the accounts, Bank of America placed a fictitious debit in the amount of $888,888.88 on each of Orbital’s accounts so that it would appear that Orbital was overdrawn, when it was not. Bank of America then falsely told Orbital’s vendors and customers that Orbital’s checks were being return because Orbital did not have sufficient funds to pay their checks, which Bank of America knew was not true.
When Orbital contacted Bank of America to find out why it closed its bank accounts and stopped honoring checks, Bank of America refused to tell it saying that it did not have to give any reasons. Bank of America also refused to return to Orbital the over $400,000 that Orbital had in its accounts and also refused to provide a reason.
Orbital then filed an action against Bank of America and sought an immediate injunction directing Bank of America to return its money. Bank of America opposed the injunction and argued that it was entitled to hold Orbital’s money without giving any reason. (Orbital Publishing Group, Inc. v. Bank of America, N.A., Case No. 1:11-CV-3065 (PAC) S.D.N.Y.)
Federal Judge Paul A. Crotty rejected Bank of America’s argument and issued an injunction directing Bank of America to release Orbital’s funds. Judge Crotty said he never heard of a bank simply holding a depositor’s funds without any explanation. “I thought maybe the government was trying to seize these … proceeds. But it’s not. It’s just the bank who’s conducting its own investigation. They don’t give an explanation. I’ve never heard of that.”
The case is proceeding. Bank of America’s response to the complaint is due by June 30, 2011.
The depositor is represented by the New York law firm of Lennon & Klein, P.C.
For further information, contact David P. Lennon, Esq., Lennon & Klein, P.C., 410 Park Avenue, 15th floor, New York, NY 10022, 212-465-0725.