Wells Fargo Bank, N.A. v. Willoughby

LeRoy Willoughby (defendant) responded to an unsolicited email purportedly sent by the Itochu Corporation, a Japanese company, seeking a part-time representative in the United States to deposit checks and wire funds in exchange for a 5 percent commission. Per the initial, awkwardly worded email, Itochu’s board members did not speak English, and so the company needed a representative in the United States or Canada. Willoughby was familiar with Itochu from his 25 years of work in Japan and had even taught English to some Itochu managers. After accepting the job, Willoughby received a check for $150,000, which was drawn on a Canadian Imperial Bank of Commerce (CIBC) account. Willoughby raised a concern when he was told that he supposedly actually was working for a Chinese company rather than Itochu, but Willoughby did not abandon the project. Instead, Willoughby endorsed and deposited the check in his newly opened account with Wachovia Bank, which was succeeded by Wells Fargo Bank, N.A. (collectively, Wells Fargo) (plaintiffs). According to Willoughby, he told Wells Fargo employees that he was suspicious about the check (without telling them why), but the Wells Fargo employees responded that the funds were “okay” if the check cleared. The next week, Wells Fargo credited the $150,000 to Willoughby’s account. Willoughby withdrew $5,500 as his commission and, at the purported employer’s instruction, wired $96,905 to the Japanese account of Asako Tradings (Asako). A few days later, CIBC returned the check as dishonored. The Japanese bank subsequently stated that the transfer to Asako could not be reversed and that Asako was a fictional entity. The culprit behind the scam was never identified. Wells Fargo sued Willoughby pursuant to the Uniform Commercial Code (UCC) to recover its approximately $97,000 loss. In response to Wells Fargo’s motion for summary judgment, Willoughby argued that he, too, was a victim and that he did not intend to defraud Wells Fargo.