Thousands and thousands of checks go thru the clearinghouse process. Your bank is not going to know if another bank's check is fraudulent. Normally, a bank that is suspicious about a check will put a hold on the check. In some states, there are laws requiring checks to be cleared in 2 days. Whether you can sue the bank remains to be seen. You need to seek a lawyer in your area about this. Even if you do not go forward against the bank, the bank may be coming after you to get its money back. It may even siphon the money you have in your current accounts to make up some of the loss for the money it paid out. Never send money back to someone who has sent you a big check. That is a huge red flag. Good Luck.
The information provided should not be considered legal advice. I am not licensed to practice in any State other than SC. The results of your case will depend on the presentation of evidence, the law and other factors that may change depending on an in depth analysis of the facts of the case. Please see an attorney before making legal decisions.
It seems to me your ire is misdirected. Seems you should be upset at the person who sent you a fraudulent instrument. The bank has an obligation and right to try and make good on a bad check, there are several ways they may do this including holding your current funds under some circumstances as well as suing you which I had occur with a client who had to reimburse the bank over a number of years after passing and receiving funds from a bad check from a foreign country . You have said nothing about the arrest which I believe should be more of an issue to many persons in you situation. The arrest indicates the authorities may believe you were more than just a victim. I agree with the other attorney's answer in regard to the multitude of checks that pass through an institution daily. We are each responsible to try our best to assure that the instruments we pass for honoring have a good indication that they are valid. Good luck on both issues.