A Korean American business owner in Orange County was left shocked when $130,000 suddenly disappeared from his Bank of America account — the result of a mistaken seizure order from a federal court in New York that wrongly targeted his business.
According to the business owner, identified as Mr. Lee, he discovered the missing funds in August after nearly 30 years with the same bank. Within an hour, the balance in his transportation company’s account dropped from $130,000 to zero.
At first, Lee thought it was a scam or hacking attempt. But after speaking with the bank several hours later, he learned that a federal court in New York had issued a seizure order for his company’s account. The order was based on a claim filed by a Chinese-owned firm in Virginia, identified as S company, which alleged it was owed about $460,000. A New York debt collection law firm, acting on behalf of the creditor, traced and froze accounts it believed were connected to the debtor — including Lee’s.
However, Lee and his company had no connection to S company or its affiliates. Acting under the court’s authorization, Attorney A froze $130,000 from Lee’s account even though his business name and EIN (Employer Identification Number) did not match any of the listed entities.
Because the incident occurred after East Coast business hours, Lee was unable to reach the court or attorney immediately. He reviewed his company’s transaction history overnight and found no related debts. When he contacted the bank again, Bank of America advised him to reach out directly to the attorney. With help from a lawyer friend, Lee sent an email asserting that his business had no connection to S company.
The next morning, Attorney A replied that the seizure would be canceled if Lee could prove his company was unrelated to the case. After verifying the documents, the funds were returned within two days. By then, several checks had already bounced, and Lee had to explain the situation to his partners.
Further review showed that neither Attorney A nor the court properly verified the company’s identity or EIN before issuing the order. The attorney representing Lee said that without an immediate response, “the situation could have lasted much longer and made normal business operations impossible,” adding that a bank account seizure “can cause serious damage to a business.”
Despite the clear mistake, neither Bank of America nor Attorney A issued an apology or formal statement.
There are no official statistics on court-ordered bank account seizures, but the National Creditors Bar Association (NCBA) includes more than 1,700 member attorneys involved in debt collection nationwide. Some firms are known to buy and sell old debt records and even pursue debts more than 10 years old, often obtaining seizure orders with little verification. Industry insiders admit that “if a name looks similar, some firms go ahead and request a court order first.”
Legal experts warn that this practice is putting innocent small businesses at risk. Attorney Albert Chang stated, “Court orders intended to track real debtors are now harming unrelated companies. We’re seeing more cases where similar names or even ethnic identifiers lead to wrongful seizures.”
Due to insufficient verification by the collection attorney, the court, and the bank, an innocent small business was left to bear the loss. Lee said, “I’ve faced many hardships as an immigrant, but nothing has felt as unfair as this.”
BY BRIAN CHOI [choi.inseong@koreadaily.com]
