July 23, 2026  ·  Complaint filed July 1, 2026  ·  United States District Court for the District of New Jersey, No. 2:26-cv-08037-BRM-JSA

By David Brunk, civil litigation attorney

Read the complaint

Arch v. Bank of America accuses bank of processing over

M in fraudulent wire transfers after fraud alerts

Arch Insurance Company and At-Bay Specialty Insurance Company, as subrogees of Blue Logistics Topco LLC and its subsidiary G and B Packing Company Inc., allege that Bank of America, N.A. and Bank of America Corporation allowed over $1,000,000.00 in unauthorized electronic fund transfers to be completed from the companies’ accounts. The complaint, filed in federal court, seeks $1,036,424.06 in damages and asserts thirteen causes of action, including violations of the Electronic Fund Transfer Act (EFTA), New Jersey’s Uniform Commercial Code (UCC), and common-law duties. The complaint alleges that over $1,000,000.00 in fraudulent transfers were completed and the money was removed from the insured’s accounts (Compl. ¶27).

According to the filing, the insurers paid $938,237.59 (Arch) and $98,186.47 (At-Bay) to cover losses sustained by their insureds after fraudulent wire and ACH transfers were executed on July 2, 2025, despite multiple fraud alerts marked by the account holders. The complaint states that "over $1,000,000.00 in fraudulent transfers were completed and the money was removed from the Insured’s account(s)" (Compl. ¶27). The plaintiffs contend Bank of America failed to conduct a reasonable investigation, as required by federal law, and violated multiple provisions of the EFTA and UCC.

The suit is brought under subrogation rights, with the complaint alleging that the insurers are subrogated to the rights of the insured to the extent of the payments made. "ARCH and AT-BAY are subrogated to the rights of the Insured to the extent of the payments made" (Compl. ¶71).

Fraudulent call and unauthorized transfers on July 1-2, 2025

The complaint alleges that on July 1, 2025, Paul Mees, an employee of Blue Logistics Topco LLC and its subsidiary G and B Packing Company Inc., received a telephone call from an individual who identified himself as a representative of Bank of America. The filing states that Mees "received a telephone call from an individual identifying himself as Brian Smith, who claimed to be from Defendants" (Compl. ¶20). The complaint further alleges that during this call, "Paul Good was not attempting a wire transfer, Mr. Mees was told that the transfer will be reported as fraud" (Compl. ¶21).

On July 2, 2025, the insured marked multiple wire transfers and ACH batches as fraudulent in Bank of America’s system, according to the filing. Despite these alerts, the complaint alleges that the defendants processed over $1,000,000.00 in unauthorized transfers, removing the funds from the insured’s accounts. The complaint states that "over $1,000,000.00 in fraudulent transfers were completed and the money was removed from the Insured’s account(s)" (Compl. ¶27). The same day, the insured contacted the defendants’ fraud department to report the unauthorized transactions, the complaint alleges.

Defendants' alleged failures under error resolution and security procedures

The complaint alleges that Bank of America, N.A. and Bank of America Corporation (collectively, the defendants) violated federal and state error-resolution statutes after the insured reported unauthorized electronic fund transfers on July 2, 2025. According to the filing, the defendants failed to prevent or limit the insured’s liability, as required by law. The complaint alleges that "Defendants failed to prevent or limit the Insured’s liability, as required by statute" (Compl. ¶34). The complaint further contends that the defendants did not investigate or resolve the reported errors, stating that they failed to comply with error resolution procedures by "failing to provisionally recredit the Insured’s bank account and failing to conduct a reasonable investigation" (Compl. ¶47).

The complaint also asserts that the defendants breached their duty to implement commercially reasonable security measures. It alleges that "Each Defendant failed to follow commercially reasonable security procedures and did not act in good faith in accepting the unauthorized payment orders" (Compl. ¶73). These failures are cited as violations of both the Electronic Fund Transfer Act and New Jersey’s Uniform Commercial Code provisions governing authorized and verified payment orders. Specifically, the complaint includes causes of action for violations of N.J.S.A. 12A:4A-202(1) and N.J.S.A. 12A:4A-202(2)(ii), which pertain to authorized and verified payment orders, as well as N.J.S.A. 12A:4A-204(1), which addresses the refund of payment and the duty of the customer to report unauthorized transactions.

Federal claims under the Electronic Fund Transfer Act

The complaint alleges that Bank of America, N.A. and Bank of America Corporation (collectively, the defendants) violated multiple provisions of the Electronic Fund Transfer Act by failing to prevent or remedy unauthorized electronic fund transfers from the accounts of Blue Logistics Topco LLC and G and B Packing Company Inc. Plaintiffs Arch Insurance Company and At-Bay Specialty Insurance Company, as subrogees, seek to recover $1,036,424.06 in damages resulting from these alleged violations. The complaint includes the following causes of action under the EFTA:

• Count One: Violation of 15 U.S.C.A. § 1693g(a) – Consumer Liability, against Bank of America, N.A. and Bank of America Corporation;
• Count Two: Violation of 15 U.S.C.A. § 1693f(a) – Error Resolution, against Bank of America, N.A. and Bank of America Corporation;
• Count Three: Violation of 15 U.S.C.A. § 1693f(e) – Error Resolution Procedures, against Bank of America, N.A. and Bank of America Corporation;
• Count Four: Violation of 15 U.S.C.A. § 1693h(a)(1) – Liability of Financial Institutions, against Bank of America, N.A. and Bank of America Corporation;
• Count Five: Violation of 15 U.S.C.A. § 1693m(a)(1) – Civil Liability, against Bank of America, N.A. and Bank of America Corporation; and
• Count Six: Violation of 15 U.S.C.A. § 1693m(a)(3) – Civil Liability, against Bank of America, N.A. and Bank of America Corporation.

The complaint alleges that the defendants failed to prevent or limit the insured’s liability for the unauthorized transfers, despite receiving notice of the fraudulent activity on July 2, 2025. The complaint contends that the insured notified the defendants of errors involving unauthorized electronic fund transfers on July 2, 2025, but the defendants failed to investigate or resolve the reported errors. Specifically, the complaint alleges that the defendants violated federal requirements by "failing to provisionally recredit the Insured’s bank account and failing to conduct a reasonable investigation" (Compl. ¶47).

The complaint further alleges that the defendants violated 15 U.S.C.A. § 1693h(a)(1) by failing to recredit the insured’s account for the unauthorized transfers, stating that "Defendants violated 15 U.S.C.A. § 1693h(a)(1) by failing to recredit Insured’s account" (Compl. ¶53). Additional counts seek civil liability for violations of the Electronic Fund Transfer Act, with the complaint asserting that the defendants’ failure to implement commercially reasonable security procedures and their refusal to recredit the insured’s account despite clear evidence of fraud demonstrate a willful disregard of the law. The complaint alleges that "Defendants’ violations of the EFTA involved willful disregard of the law" (Compl. ¶63).

Plaintiffs seek a declaration that the defendants violated the Electronic Fund Transfer Act, an injunction requiring the defendants to implement commercially reasonable security procedures, and an order directing the defendants to recredit or refund the $1,036,424.06 in losses, along with attorneys’ fees, costs, and pre- and post-judgment interest.

State claims under New Jersey’s Uniform Commercial Code and common law

The complaint alleges that Bank of America, N.A. and Bank of America Corporation (collectively, the defendants) violated provisions of New Jersey’s Uniform Commercial Code governing payment orders and accepted unauthorized transfers totaling over $1,000,000.00 from the accounts of Blue Logistics Topco LLC and its subsidiary G and B Packing Company Inc. The complaint includes the following causes of action under the UCC:

• Count Seven: Violation of N.J.S.A. 12A:4A-202(1) – Authorized and Verified Payment Orders, against Bank of America, N.A. and Bank of America Corporation;
• Count Eight: Violation of N.J.S.A. 12A:4A-202(2)(ii) – Authorized and Verified Payment Orders, against Bank of America, N.A. and Bank of America Corporation; and
• Count Nine: Violation of N.J.S.A. 12A:4A-204(1) – Refund of Payment and Duty of Customer to Report, against Bank of America, N.A. and Bank of America Corporation.

The complaint alleges that the defendants accepted unauthorized payment orders in violation of state law. It further contends that the defendants failed to verify the orders using commercially reasonable security procedures to authenticate the sender. The complaint states that "Each Defendant failed to follow commercially reasonable security procedures and did not act in good faith in accepting the unauthorized payment orders" (Compl. ¶73). The complaint also alleges that the defendants accepted unauthorized payment orders in violation of N.J.S.A. 12A:4A-202(1) (Compl. ¶68).

The complaint states that the insured provided timely notice of the unauthorized orders on July 2, 2025, yet the defendants failed to refund the amounts, alleging that "the Insured provided timely notice to Defendants of unauthorized payment orders, but Defendants failed to refund amounts" (Compl. ¶78).

The state-law claims extend beyond the Uniform Commercial Code. The complaint also asserts the following common-law causes of action:

• Count Ten: Breach of Implied Covenant of Good Faith and Fair Dealing, against Bank of America, N.A. and Bank of America Corporation;
• Count Eleven: Negligence, against Bank of America, N.A. and Bank of America Corporation;
• Count Twelve: Breach of Contract – Implied Contract, against Bank of America, N.A. and Bank of America Corporation; and
• Count Thirteen: Breach of Fiduciary Duty, against Bank of America, N.A. and Bank of America Corporation.

The complaint asserts a negligence claim, contending that the defendants breached their duty of reasonable care by failing to prevent unauthorized transfers after warnings. It alleges that "Defendants breached their duty of reasonable care by failing to prevent unauthorized transfers after warnings" (Compl. ¶90) and that "Defendants' failure to exercise reasonable care led to foreseeable damages on or about July 1, 2025" (Compl. ¶91).

The complaint further alleges that the defendants breached the implied covenant of good faith and fair dealing, stating that "Each Defendant breached this duty by failing to act in good faith in responding to the Insured’s warnings, alerts, and notice of fraud" (Compl. ¶84). Additionally, the complaint asserts that the defendants breached an implied contract by failing to prevent or reverse unauthorized transfers (Compl. ¶98) and breached their fiduciary duty by failing to act promptly on warnings and notices of unauthorized activity, alleging that "Each Defendant owed the Insured a fiduciary duty to act in the Insured’s best interests" (Compl. ¶103) and "Defendants breached their fiduciary duty by failing to act promptly on warnings and notices of unauthorized activity" (Compl. ¶104).

Plaintiffs Arch Insurance Company and At-Bay Specialty Insurance Company, as subrogees, seek to recover $1,036,424.06 in damages arising from these state-law violations.

Parties and their roles in the dispute

Arch Insurance Company and At-Bay Specialty Insurance Company, the plaintiffs, are insurers that issued policies to Blue Logistics Topco LLC and its subsidiary G and B Packing Company Inc. The complaint alleges that after the insureds sustained losses from unauthorized electronic fund transfers, Arch paid $938,237.59 under policy number PCD1006547-01 (Compl. ¶6) and At-Bay paid $98,186.47 under policy number AB-6667063-01 (Compl. ¶8). Both insurers now stand in the shoes of their insureds as subrogees, asserting that "ARCH and AT-BAY are subrogated to the rights of the Insured to the extent of the payments made" (Compl. ¶71).

Blue Logistics Topco LLC, based in Madison, New Jersey, and its subsidiary G and B Packing Company Inc., headquartered in Jersey City, are the named insureds and account holders at Bank of America. The complaint alleges that at all relevant times the insureds maintained one or more accounts with the defendants (Compl. ¶12).

Bank of America, N.A., a national banking association, and Bank of America Corporation are the defendants. The complaint alleges that they processed over $1,000,000.00 in unauthorized wire and ACH transfers on July 2, 2025, despite multiple fraud alerts from the insureds. The complaint states that "over $1,000,000.00 in fraudulent transfers were completed and the money was removed from the Insured’s account(s)" (Compl. ¶27).

Damages and insurance payments totaling $1,036,424.06

Arch Insurance Company and At-Bay Specialty Insurance Company, as subrogees of Blue Logistics Topco LLC and its subsidiary G and B Packing Company Inc., seek to recover $1,036,424.06 in damages resulting from unauthorized electronic fund transfers allegedly facilitated by Bank of America, N.A. and Bank of America Corporation. The complaint alleges that over $1,000,000.00 in fraudulent transfers were completed and removed from the insured’s accounts on July 2, 2025, despite multiple fraud alerts and notifications to the defendants. The complaint states that "over $1,000,000.00 in fraudulent transfers were completed and the money was removed from the Insured’s account(s)" (Compl. ¶27).

The complaint states that Arch Insurance Company paid $938,237.59 under policy number PCD1006547-01 to cover losses sustained by the insured (Compl. ¶6). At-Bay Specialty Insurance Company contributed an additional $98,186.47 under policy number AB-6667063-01 (Compl. ¶8), bringing the total insurance payments to $1,036,424.06. The filing asserts that both insurers are subrogated to the rights of the insured to the extent of these payments, as stated in "ARCH and AT-BAY are subrogated to the rights of the Insured to the extent of the payments made" (Compl. ¶71). The complaint further alleges that the insured suffered damages in the amount of $1,036,424.06 (Compl. ¶74, 79, 85, 93, 99, 105).

The filing also notes that the minimum amount in controversy for federal jurisdiction is satisfied by the $75,000 threshold.

The complaint alleges that the defendants’ conduct resulted in the full depletion of the fraudulent transfers, stating that over $1,000,000.00 in fraudulent transfers were completed and the money was removed from the insured’s accounts. Plaintiffs contend that these losses stem from the defendants’ violations of federal and state statutes, including the Electronic Fund Transfer Act and New Jersey’s Uniform Commercial Code, as well as common law duties.

Relief sought and procedural posture

The complaint seeks a judicial declaration that Bank of America, N.A. and Bank of America Corporation violated the Electronic Fund Transfer Act, New Jersey’s Uniform Commercial Code, and common-law duties owed to Blue Logistics Topco LLC and its subsidiary G and B Packing Company Inc. Plaintiffs Arch Insurance Company and At-Bay Specialty Insurance Company, standing as subrogees, also request a permanent injunction that would bar the defendants from further statutory violations and compel them to adopt commercially reasonable security procedures.

In addition to declaratory and injunctive relief, the complaint demands an order directing the defendants to recredit or refund the full $1,036,424.06 that the insurers allege was lost in the July 2025 unauthorized transfers. The complaint states that "the Insured suffered damages in an amount of $1,036,424.06" (Compl. ¶74). Plaintiffs further request actual damages, statutory damages, compensatory damages, attorneys’ fees, costs, expert-witness fees, and both pre-judgment and post-judgment interest.

The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.

The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.

David Brunk is a civil litigation attorney. He can be reached at david@newmanbrunk.com.