I have recently dissolved a bussiness relationship. Upon my leaving my
partner went into our bank and signed a forgery affidavit saying that
my payroll checks had been forged and I had no right to the funds I
had deposited in my personal account. It had been sighning my name to
his checks and his name to my checks for over two years. I usually
signed his name because he would often not be at work for several days
in a row. So once the affidavit was signed the bank gave him about
$78,000.00 from my personal account and $7000.00 from my sisters
business account. I am not on her account but had loaned her $7000.00
from my personal account. I also had signed several certified checks
to pay some of our bussiness debt when I left. He had the bank stop
payment on these checks. This hurt my relationship with several
clients, being I was the person they dealt with on the day to day
basis. My question is is it leagal for the bank to release these funds
without a police report or court order. I thought they should have
maybe froze the account and asked for an interpleader untill this
could have been worked out in court. The forgery issue was put to rest
once I showed the payroll checks of equal amounts made to my
expartner. But now he is gone and with no money to operate on I am out
of bussiness. I feel like some banking regs have been broken but am
not sure, I have done alot of research but it is hard for me to follow
some of the language in the legal definitions. Thank you for your
help.

What does the bank say about it?

Maybe the FDIC can help.  http://www.fdic.gov/

The bank feels they have done nothing wrong. They feel they were lied
to and therefore should not be held responsible. That I should go
after my expartner, since they obtained my funds through deception. I
have read alot on the FDIC website as well as researched the UCC
sections 3 and 4. It is hard to understand some of the language.
Thanks

It sounds like you're dealing with a small community bank, am I
correct?  A large national bank would most likeley be more
professional than that.  You might want to try to bluff the bank. 
Tell them you spoke with your attorney and he said your ex-partner did
not steal from you, he stole from the bank, and the bank is obligated
to return your money and seek damages against the thief.

I mean, what if some guy went to the bank and asked to withdraw money
from your account.  The teller doesn't ask for ID or anything, just
gives him the money.  When you show up, the bank says, "Oh, well some
guy withdrew the money. If you want it back, you're going to need to
speak with him."  Does that sound right?  Or if the bank gets robbed,
they send you a letter saying it was your money that the robber got
away with.

That sounds fishy.

Might even get a lawyer drafted letter:  http://www.legalzoom.com/index.html

I have spoken to an attorney. He feels I have a strong case. Don't
know what will happen next. I am sure it will be a long drawn out
ordeal.

I think it will be shorter than you think.  I have a feeling your
attorney is going to tear into the bank, and they'll see your point of
view sooner rather than later.  Keep us updated if you can.