## Facts

- A Florida law firm, acting as closing counsel for a dealership sale, needed to wire funds to repay a short-term loan owed to a lender.
- The firm received email wire instructions directing payment to a lender’s lawyer’s account at M&T Bank.
- The next day, the firm received a second email, purportedly from the same lawyer, changing the destination to a Wells Fargo account in Texas; the email contained multiple errors and an unusual explanation for the change.
- The firm did not independently verify the changed instructions with the purported sender and wired $504,611.13 from its trust account to the Wells Fargo account identified in the second email.
- The funds were deposited into a Wells Fargo account controlled by a third party, who quickly withdrew the money; the intended recipient never received payment.
- Wells Fargo’s automated processing created internal transaction records that included a notation suggesting a possible mismatch between the named beneficiary in the payment order and the account holder, but no employee reviewed the notation before crediting the account.
- The transaction also triggered OFAC screening, which addressed sanctions compliance and did not involve beneficiary name-to-account verification.
- After the fraud was discovered, the firm requested a recall, but the funds were already gone.
- The firm sued Wells Fargo under Florida’s version of UCC Article 4A; Wells Fargo moved for summary judgment.

## Issues

1. Under Florida’s UCC Article 4A, may a receiving bank execute a wire transfer based on the correct account number even if the beneficiary name in the payment order does not match the account holder’s name?
2. Does an internal, automated, unreviewed system notation indicating a possible name/number mismatch constitute the bank’s “knowledge” or “notice” sufficient to create liability or a duty to investigate before crediting the account?

## Decision

- The court granted Wells Fargo’s motion for summary judgment.
- The court held that Wells Fargo did not violate Article 4A by executing the payment order based on the account number despite an asserted name/account mismatch.
- The court held that the automated, unreviewed mismatch notation did not establish Wells Fargo’s actual knowledge and did not impose a duty to investigate under Article 4A.
- Judgment was entered for Wells Fargo on the Article 4A claims.

## Legal Principles

- Under UCC Article 4A (including provisions analogous to UCC § 4A-207), when a payment order identifies a beneficiary by both name and account number, a receiving bank may rely on the account number even if the name and number do not match.
- Article 4A generally allocates the risk of loss from misdescription or fraud in payment instructions to the originator (or its bank) when the receiving bank executes the order by the specified account number absent actual knowledge of a discrepancy that triggers statutory consequences.
- “Knowledge” for Article 4A purposes is not established merely because an automated system generates and stores internal information suggesting a possible mismatch when no employee is aware of it and it is not part of the bank’s operative decision process.
- Sanctions screening (e.g., OFAC compliance review) does not, by itself, create Article 4A duties to perform beneficiary-name matching or broader fraud detection beyond the screening’s sanctions function.

## Conclusion

The court ruled that Article 4A permitted Wells Fargo to credit the account identified by the payment order’s account number, and that unreviewed automated indicators of a possible beneficiary-name mismatch did not amount to the bank’s actual knowledge or create a duty to investigate; summary judgment was entered for Wells Fargo.


Peter E. Shapiro, P.A. v. Wells Fargo Bank, N.A., 352 F. Supp. 3d 1226 (S.D. Fla. 2018)