For more than four years, an employee of a Catholic school in Connecticut got away with siphoning hundreds of thousands of dollars from the school’s account at Bank of America. In 2012, a court ordered BofA to pay $840,000 to the diocese for its failure to catch on to the swindle. Today, the bank was scheduled to appear in court to make its case for why it shouldn’t have to pay that tab.

Back in 2002, the St. Bernard School of Montville, CT, was already banking at Fleet Bank, but an accounts payable employee for the school took it upon himself to open up a second account for “Saint Bernard’s High School Norwich Diocese Camp Sunshine” at a second Fleet branch. Even though the employee had no authority to access the school’s account, he was able to shift funds from the legitimate account to the bogus one. Additionally, he told some people who wrote checks to the school to make them out to the Sunshine Camp so the funds would be deposited straight into the scam account. He also wrote checks from the school’s account to the fraudulent account to pay invoices that didn’t exist.

While all this was going on, Fleet Bank merged with Bank of America in 2004.

It wasn’t until after the man lost his job when his position was cut that the school caught on to the sizable swindle. He was arrested in 2007 and convicted of first-degree larceny in 2008.

That same year, the Roman Catholic Diocese of Norwich, CT, which runs the school, sued BofA for negligence, saying it failed in its obligation to protect its customers’ money.

The bank argued that the school’s deposit agreement includes a time limit for making claim disputes and that it had waited too long before filing its claims.

But according to the Norwich Bulletin, the judge instructed jurors that the time limit could be waived if they found that the bank’s later conduct was related to its first actions or if Bank of America had a “special relationship” of continuing trust and duty toward St. Bernard.

In the end, the jury sided with the diocese. However, BofA has appealed the decision, saying that the time limits should apply and that the total awarded to the school should be reduced by $100,000 because of funds paid out by the school’s insurer.

Court to hear Bank of America appeal in St. Bernard case [Norwich Bulletin]

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