Bill Bhaskar owned a medical practice, Bill Bhaskar, M.D., Inc. Bhaskar was approached by Abdul S. Walji and his company, Calpension, Inc., soliciting his business as “Employee Benefit Consultants” that could manage his investments by investing the funds with Farmers & Merchants Bank (F&M). Bhaskar agreed to use Walji’s services to plan a secure retirement. Over the next few years, Bhaskar did not give Walji any funds directly, instead making out checks totaling $1.4 million payable to F&M. Walji would then handdeliver the checks to an F&M branch, where F&M acceded to “Walji’s request to have the plaintiffs’ checks diverted and thus credited to his account.” Walji then “provided false and fraudulent pension plan statements to plaintiff which purported to show that plaintiffs’ capital accounts were increasing in value.” When Bhaskar discovered Walji’s scheme, he sued F&M, arguing the bank owed him a duty of care that was activated when Walji made the suspicious requests for the checks to be diverted to his account. Bhaskar asserted, “By making reasonable inquiries, [the bank] could have discovered the fraudulent scheme and prevented its success.” F&M argued that it is a holder in due course, and thus is protected from Bhaskar’s claims. The judge ruled in favor of Bhaskar, finding the holder-in-due-course defense as inapplicable. Why did the judge decide that the holder-in-due-course defense is inapplicable? Were there any irregularities in the checks that should have alerted F&M to possible fraud?