Customers say Old National Bank failed to protect from fraud

A second Minnesota business owner in five weeks has sued Old National Bank, saying it should have but failed to halt an advanced con that cost him nearly $550,000.

In Jim Moline’s case, it involved a cloned website, an employee tricked by a criminal impersonating bank personnel, and electronic transfers above $25,000 that Moline says were supposed to trigger a phone call from bank security.

“We never got a call,” said Moline, president of Marshall, Minn.-based Midwest Ag Enterprises Inc.. “They left us wide open.”

The suit comes after a Minneapolis business sued the bank this summer over a fraud that occurred after it bought a fraud detection service.

Such cases reflect a growing problem in the U.S. The Federal Trade Commission reported $3.5 billion stolen through so-called imposter scams in 2025, with banks leading the category for allowing the greatest losses.

Along with investment in fraud security, banks are running public education campaigns with the hope their customers can outfox increasingly sophisticated methods of cybercriminals.

Old National declined to discuss the cases, citing pending litigation.

But spokesman Scott Reinhard said in a statement the bank’s security measures are “consistent with industry standards” and the bank invests “substantial resources to help safeguard our clients as fraud schemes and scams continue to evolve.”

Lawyers involved in the cases allege the problem is wider, with other clients of Old National — the state’s third-largest bank — coming forward after losing large sums.

In the first lawsuit, a Minneapolis-based device supplier called Marshall Screw Products claims to have lost $1.1 million in a separate fraud despite paying Old National for a premium monitoring service.

Both business owners allege the bank failed to maintain industry-grade safeguards that should have shielded their accounts.

Old National became a large provider for Minnesota consumers and businesses following the acquisition of longtime St. Paul institution Bremer Bank. In the $1.4 billion deal, Old National picked up Bremer’s accounts and branches fanning across the state. Customers fully switched over through a system transfer that wrapped up last October.

After the transition, Moline believes fraud security is lacking compared to Bremer, a bank he trusted with his accounts for more than 25 years.

Moline, who sued Old National on Oct. 2, said the scam seriously damaged his business.

In the case of Minneapolis-based Marshall Screw, over the course of three business days in November 2025, Old National processed 55 transactions for $20,000 apiece out of Marshall Screw’s account, according to the lawsuit the company filed.

The business received a call from a bank employee saying the account was about $700,000 overdrawn.

That’s when Marshall Screw, a maker of plastic and metal parts for medical devices, discovered the account had been compromised. The fraudulent transfers added up to $1.1 million, according to a lawsuit filed in Ramsey County District Court in late August.

Old National recovered $77,742 and “refused to reimburse” a remaining $1,022,258 in losses, according to the lawsuit.

The fraud happened months after a bank representative called to report a separate suspicious transaction. Marshall Screw enrolled in a premium service called positive pay for electronic transfers based on Old National’s recommendation, according to the lawsuit.

Terrance Moore, an attorney for Marshall Screw, said positive pay did not work. Since filing the lawsuit, he said, his law firm has become aware of other Minnesotans whose accounts were defrauded after Bremer’s transition to Old National.

“The breadth of the problem is wide. There are multiple victims experiencing the same story,” Moore said.

In a court filing Friday, Old National asked a federal judge to send Marshall Screw’s case to arbitration, citing a contract clause under which clients waive their right to trial.

Old National said Marshall Screw agreed not to sue when it transferred over its legacy Bremer account. Such agreements are commonly used among large financial institutions.

In the separate fraud on Moline’s agricultural business, criminals gained access to accounts of Midwest Ag and those of two other related business entities. Unauthorized electronic transfers moved between the accounts, amounting to more than $1 million in lump sums, including a $42,000 wire, according to a lawsuit filed in federal court earlier this month.

The transactions were never flagged despite being “atypical” to how the businesses had run over 25 years, the lawsuit says, including not using a newly registered security “two-factor” security device.

In all, more than 168 activities were recorded over the span of seven hours.

Cited within the lawsuit is a data breach involving a third-party software partner of Old National’s called Marquis Software Solutions, which was at the center of a large security failure last year. The company is a vendor for many banks and credit unions.

The lawsuit also references 244 former Bremer employees in a service center in Lake Elmo who were laid off in late 2025. Among the positions cut were fraud investigators and information technology personnel.

Reinhard, the Old National spokesman, said in a written statement the bank is confident no accounts were compromised in the Marquis breach.

He said the bank is also confident that its conversion process and personnel decisions “did not contribute to fraud activity involving consumers or business clients of Old National Bank.”

“Throughout the conversion process and since its completion, Old National has remained vigilant about fraud prevention, with fraud-monitoring and account-security controls designed to identify, investigate and respond to potentially suspicious activity,” he said.

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