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If it sounds too good to be true, it usually is

A merchant need not be suspicious of accepting a check lacking the customer’s own name, and thus, the merchant has no duty to further investigate.

In early 2012 Kader purchased a Lamborghini for $516,000 from a dealer.  Fazliq Dean Kader got most of the funds from checks written on the account of QDOS, Inc.  The CEO of QDOS Inc. was Richard Gilliam.  Kader had procured $3.0 million of investment capital for QDOS.

Car engine blow up
Car engine blow up

The purchase was supposedly a business deal.  The two would acquire the car and immediately resell it for a $200,000 profit.  Gilliam wrote the checks.  Kader made the purchase, and the car was titled in Kader’s name with no liens.

A few months later Kader sold the car back to the same dealer for $428,000, a loss of $88,000.  Ostensibly, Kader kept the proceeds.

Gilliam sued for fraud, inter alia

Defendants included the dealer, the Auto Gallery, and the financing company.  Gilliam alleged that Kader’s tender of two different checks, not in Kader’s own name should have raised sufficient suspicion to trigger a duty to investigate.

The Appellate Court disagreed.

Sponsored by:  Ted Broomfield Law, a leading personal injury and privacy attorney in the San Francisco Bay Area.


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