Some depositors allege wrong doing by Bank of Guam handling of “stimulus checks”

By Bill Jaynes

The Kaselehlie Press


March 29, 2021

Pohnpei—Seven plaintiffs, some US citizens and some FSM citizens, have filed a complaint (CA 2021-008) for damages against the Bank of Guam for the bank’s handling of deposits of United States Department of Treasury funds, so called “stimulus checks”. 

The plaintiffs say that when the Bank of Guam either failed to honor US Treasury checks or in some cases, “returned” money to the Internal Revenue service that plaintiffs had deposited into their accounts, Bank of Guam violated their contractual obligation to their customers amounting to fraud and theft.

They allege that in some instances, the Bank of Guam established itself as the entity that would determine whether a depositor was eligible to receive a stimulus payment from the United States Treasury by requesting that the depositor present a United States passport, a United States tax return, or W-2 form issued by an employer in the United States. 

They further allege that the Bank of Guam also contacted local businesses including the Bank of the FSM telling the local businesses that they were prohibited by law from cashing or otherwise negotiating US Treasury checks.  They claim that action was in an effort to keep its customers and other people from being able to negotiate US Treasury checks in the FSM.

The civil action claims that the “Bank of Guam has refused and continues to refuse to communicate with the Plaintiffs about the status of their deposits, other than to advise the Plaintiffs that they need to contact the United Stated Internal Revenue Service.”

Plaintiffs argue that “there is no provision of United States law or FSM law that authorizes the Bank of Guam to intercept and hold deposits issued by the United States Treasury like that at issue here, including serving as an agent for the United States Internal Revenue Service.”  It also says that there is no provision of US or FSM law that requires the Bank of Guam to scrutinize or investigate the deposits made with it. 

The plaintiffs argue that the checks that were properly issued by the US Treasury present no evidence of fraud and should have been immediately negotiated as a bank would do with any other properly issued financial instrument.

In some cases, and in the absence of any communication from the Bank of Guam saying otherwise, some of the plaintiffs operated on the assumption that their deposits had cleared. They only found out otherwise after their accounts were overdrawn.

As causes of action, plaintiffs have charged the Bank of Guam with breach of contract, breach of fiduciary duty, due process violations, violations of the Consumer Protection Act, fraud, theft, and conversion.

Plaintiffs seek a preliminary injunction requiring the Bank of Guam to accept any and all deposits from the plaintiffs of any and (all) negotiable instruments issued by the United States Treasury with the deposit to be immediately credited to the Plaintiff’s account.  They are also requesting the court to award reasonable attorney’s fees, along with pre-judgment interest, post-judgment interest, costs and any other relief permitted by law.

At press time, attorney for the Bank of Guam had not yet filed a response to the plaintiffs’ allegations.