although these statements were now transmitted on a daily basis. Thus, at all times relevant to this action, Zambia National had at its disposal the means to track account activity on a daily basis.
The Forged Checks and the "March" Checks:
On January 16, 1990, FIB made provisional debits to accounts for checks presented for payment. Among them was the first of the two forged and counterfeited checks which form the basis of the instant action. This first counterfeited check bore the number 167690, dated December 28, 1989, and was payable to United Derby Mills Property in the amount of $ 147,694 ("the first check"). The signatures appearing on the check were compared by FIB with the signature list and found to compare favorably with the specimen signatures of Kumwenda and Silumesi. The check was thus approved for payment on January 17, 1990 and Zambia National's account was charged $ 147,694.00. Thereafter, FIB mailed the daily statement for January 16, 1990, including the $ 147,694 draft, to Zambia National. The statement and enclosed checks were received by Zambia National on February 9, 1990.
The January 16 statement recited payment of fourteen checks designated by the symbol "CK". The checks were payable in amounts ranging from $ 56 to $ 19,000, with the exception of the $ 147,694 check bearing unauthorized signatures. See Plaintiff's Exhibit 3.
On February 28, 1990, FIB sent a telex message to Zambia National, questioning whether two checks presented for payment were in fact authorized. Zambia National requested that FIB forward photocopies of the front and back of each of the two checks. See Defendant's Exhibit A (the "March checks"). The March checks were denominated in the amounts of $ 6,000 and $ 46,000, and each check bore what purported to be the signature of Alfred Kumwenda. Although Holman could not recall with certainty whether Zambia National ever determined the March checks to be forgeries, it should be recalled that Kumwenda's signature was known to have been forged prior to August 1990, and as discussed supra, said forgery occasioned an update of Zambia National's signature list. Further, the investigation into the March checks was conducted over a period of at least two months. Holman further testified that Zambia National subsequently changed its operating procedures with regard to the account at FFB. Specifically, in response to the March checks, and similarly with regard to one other check that had come to Zambia National's attention, Zambia National undertook in the middle of 1990 to monitor all transactions in the account. FFB was not even responsible for verifying signatures on the checks. See Record at 63-69.
Zambia National did not, however, take steps in March to prevent further forgeries of Kumwenda's signature, or otherwise monitor account activity by referring to the daily telex. Nor did it choose at that time to submit a new signature list.
On April 2, 1990, FIB debited Zambia National's account in the amount of $ 197,955.60, representing the second of the two counterfeited and forged checks in this action ("the second check"), numbered 167704 and dated March 7, 1990, likewise payable to United Derby Mills Limited. On April 3, 1990, FIB verified the signatures against the specimens on file, and paid the check. Thereupon, FIB mailed the April 2, 1990 statement, including the $ 197,955.60 check, to Zambia National.
As with the January 16 statement, the check for $ 197,955.60 was, conspicuously, very large in relation to the other checks paid on that date, which were payable in the range of $ 250 to $ 4,757. See Plaintiff's Exhibit 4.
The court finds that the forged signatures compare favorably with the genuine signatures of Kumwenda and Silumesi, and that under its operating procedures FIB was reasonable in making that determination. Although the signatures appearing on each of the counterfeit checks are forgeries, a comparison of the forged signatures with the exemplars provided in Zambia National's authorized signature list reveals that the forgeries closely resemble the authentic signatures. It is noteworthy that defendant's handwriting expert, Schaffenberger, indicated that he required several hours to confirm that the signatures were forgeries. Additionally, he characterized the signatures as "facsimiles," which he explained to mean that they "are the same [as genuine signatures] in general appearance". Record at 343-344.
Likewise, while the checks are counterfeits, their deviation from the design of genuine checks can only be discerned after very careful comparison to the real article.
As to both checks, the court finds that FIB transmitted the daily account information for January 16 and April 2, respectively, to Zambia National by telex in accord with its usual business practice. Although FIB had sent the relevant account information on the dates in question, the telex was not found, and Zambia National suggests that it was never sent. The court finds that the telex was sent and received. Either the International Banking Department: did not check the telex upon arrival; lost track of the telex; or, it failed to take steps to verify that the amounts recited in the telex statement were in fact authorized to be paid.
Review of Account Statements and Canceled Checks:
According to Holman, Zambia National recorded the receipt of all items of mail, including bank statements, in a central register. Bank statements were then forwarded to International Banking, where they were reviewed on arrival by the Director, one Tim Daka.
International Banking had its own routine practice regarding the daily receipt and disposition of mail. Upon receiving bank statements, Daka's secretary opened the statements and placed them on Daka's desk. Daka routinely looked through the statements and examined the contents. Thereupon, Daka forwarded the statement to the Reconciliation Department, which recorded its receipt of the statements on a second register maintained by International Banking. Although Daka was neither deposed nor offered as a live witness to testify concerning his examination of the statements containing the two forged checks, the court infers from Holman's testimony that on the two days in question, Daka's conduct was in conformity with his routine practice, and that Daka did in fact examine those statements and the enclosed checks. Fed. R. Evid. 406.
It must be recalled here that the sums paid over the two forged signatures far exceeded the amounts normally paid by check. Significantly, neither Kumwenda nor Silumesi ever signed any checks in excess of $ 10,000. Indeed, checks ordinarily were not paid much in excess of that amount; they were virtually always paid by wire transfer or by letter of credit. Daka did not make inquiries upon reviewing those checks when he first saw them in his office in Lusaka, or communicate to FIB that the checks had been paid over unauthorized signatures. Rather, he passed them on to the Reconciliation Department. According to Holman, the Reconciliation Department was routinely four to five months behind on its reconciliation of Zambia National's accounts. As it happened, neither of the two checks at issue were discovered to be forged during the reconciliation stage.
Zambia National Discovers the Forged Checks:
In early October 1990, Zambia National notified FFB of the existence of four checks bearing unauthorized signatures, all dated during the month of September and drawn against Zambia National's account at FFB ("the September forgeries"). Those checks were as follows:
Check no. 5450 $ 389,000.17 Sept. 3, 1990
Check no. 5451 $ 365,000.28 Sept. 5, 1990
Check no. 5452 $ 422,000.71 Sept. 7, 1990
Check no. 5453 $ 482,500.26 Sept. 11, 1990
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