A Pendleton County judge will preside over a lawsuit stemming from a scam that bilked Farmers Bank out of nearly $700,000.
Chief Regional Circuit Judge Robert McGinnis, of Butler, will rule on a lawsuit between Farmers Bank & Capital Trust Company and local attorney Jack Flynn over $692,000 the bank wired to Japanese banks in February 2011.
Franklin Circuit Judges Phillip Shepherd and Thomas Wingate recused themselves from the lawsuit because Flynn has often argued cases in their courts.
No court dates have been set in the matter.
The bank sued Flynn after the lawyer was approached by someone over the Internet posing as a British textile businessman named Steven Lawson who needed an attorney to settle a $900,000 debt with Albert B. Crush Company, court records show.
Days later, the person posing as Lawson said the local company had agreed to pay off the debt, and he asked Flynn to handle the financial arrangements, records say.
Flynn accepted, depositing checks, later found to be counterfeits, in his escrow account and wiring money to Japan as instructed, according to court documents.
But someone allegedly involved with the plot called Farmers Bank and told them about the scam, giving specific details about the wire transfers as well as the destination and origin of the funds, records say.
The bank tried unsuccessfully to recall the nearly $700,000 it had wired to two Japanese banks.
Farmers Bank charged the overdraft to Flynn’s account. The company is seeking damages and says Flynn was responsible for the check’s authenticity, court records say.
However, Flynn’s attorney, Mark Moseley of Lexington, contends that Farmers should have ensured funds were available before transferring the money, court documents show.
Lawyers Mutual Insurance of Kentucky, Flynn’s legal insurance company, has also filed a complaint against Flynn in the matter, saying his actions aren’t covered in his policy, records say. Flynn disputes that, saying he rendered a professional service in the financial transaction and should be covered, documents show.
McGinnis is expected to rule on that matter as well.