Guthrie also says that this money was owed to him by the client for a chandelier, nightstands and other things he had purchased on the client's behalf.

But in an October 1994 affidavit, the client stated that not only was the check intended for Warner's, but the bank never asked her if the check was intended for Guthrie.

The bank, in later court filings, states that the teller made a mistake in depositing the check into Guthrie's account.

Bank One contends that it was operating within the bank's policies and its employees did nothing more for Guthrie than for any regular bank customer. The bank also maintains that there was nothing improper about Bedell making funds available immediately on checks to Guthrie if the funds existed.

In yet another issue, Warner's alleges that the bank was negligent in routinely cashing Warner's Interiors business checks made payable to cash and petty cash.

According to Warner's records, between 1989 and 1991, the bank cashed more than $30,000 worth of Warner's company checks made payable to "cash" or "petty cash" with no endorsement. Those checks were signed either by Ron Warner or Gerald Ebbett, but, Warner's contends, cashed by employees without notifying Warner's.

Bank One spokesman Steve Roman declined to discuss customer accounts. However, he did say that bank policy is that any check written to cash does not have to be endorsed.

In court filings, the bank maintains that this procedure had long been followed whenever Warner's needed cash and that a check payable to cash is a bearer instrument that doesn't require endorsement.

However, other banking-industry executives and officials don't entirely agree.

Standard banking procedure, according to the State Banking Department, federal Comptroller of the Currency and several major banks, is that all checks should be endorsed, especially checks made out to cash.

"There is a certain risk that the bank is assuming by not getting endorsements," adds Harold Feeney, deputy superintendent at the State Banking Department.

"Company checks are not supposed to be made out to cash," says Rich Hendry, consumer affairs investigator for the U.S. Comptroller of the Currency. "A cautious institution might refuse to cash checks made out to cash unless there is a petty-cash agreement. If they've entered into that agreement, they should not be allowed to do anything else but what it says."

"Running [$1 million in a year] through an account like that should raise some concern," Hendry adds. "If it's Ross Perot, who cares? But if it's me, yeah, someone should notice."

Warner's belief that everyone had to be in on the deal has led even to a lawsuit against the customers. The business filed suit against Halle, Herman Chanen, who sits on the Bank One board, and George and Carol Beil, principals in the Houston's Restaurant chain. Carolyn Dayani, who had homes in Paradise Valley and La Jolla, California, done by Guthrie, is named in the suit with the bank and the employees. Warner's alleges that they knew about the scheme and dealt directly with employees to get a better deal.

The clients say that they did no such thing and that it's not their responsibility to watch Warner's business. In short, they paid what they were told to pay and to whom, by Warner's employees.

Dayani, one of Guthrie's biggest clients, sometimes paid him with checks made out to cash for as much as $50,000. According to her deposition, that was in order to conceal the purchase of antiques from her estranged husband during their divorce proceedings.

Guthrie cashed or deposited those checks, some of which were drawn on out-of-state banks, and was able to have access to the funds within 24 hours.

In one instance, Guthrie deposited a $50,000 Dayani check made payable to cash from a local bank and a $4,985 out-of-state Dayani check payable to cash. He did not endorse either check and no hold was placed on the funds, even though Guthrie did not have the money to cover those checks in his account.

Warner's may not see the end of its lawsuit with Bank One. The two have engaged in a tournament of hardball that could result in the end of Warner's before the civil suit sees the inside of a courtroom.

Warner's Furniture and Interiors, as well as Ron Warner personally, filed for Chapter 11 bankruptcy in 1993. Under Chapter 11, a company is reorganized. The company still exists and attempts to pay off its debts.

But Bank One, Warner's largest creditor, has opposed this arrangement. Instead, the bank has moved to push Warner's into a Chapter 7 bankruptcy. Under Chapter 7, a company is dissolved and its assets are liquidated.

Should this occur, Warner's Furniture and Interiors will be taken over by a trustee, who could be less likely to pursue lengthy litigation.

In 1989, Ron and Carolyn Warner got an $800,000 mortgage loan from Bank One for their 18,000-square-foot showroom on Osborn. They lease the space to Warner's Furniture, which guaranteed the loan.

Earlier, Warner's Furniture had taken out a loan with the bank for improvements on the showroom. The business had a balance of about $124,000 on this loan from Bank One, and had fallen behind in 1992.

After the business filed for bankruptcy in early 1993 and asked for reorganization under Chapter 11, Warner's paid off that improvement loan, which was the bank's only direct claim against Warner's Furniture and Interiors.

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It always warms my heart to see how a small business can develop into a million-dollar enterprise with sheer hard work and talent. But when that same business shatters, the feeling can be crushing. Still, this incident at Warner’s not only opened doors to queries, but also opened eyes to the dirty world of money-making.

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