Halifax Corp., seeking to recoup more than $15 million it lost in an embezzlement scandal revealed earlier this year, has filed suit against Wachovia Bank and First Union National Bank of Virginia.

It also said this week that it might take further action against other banks and accounting firms it says are responsible for helping make the embezzlement possible.

In the suit, filed in Fairfax County Circuit Court, Halifax is seeking to recover almost $14 million from First Union and Wachovia each for "negligence, gross negligence, recklessness, and bad faith" in processing a former Halifax employee's unauthorized checks for amounts as large as $150,000.

John J. Reis, president and chief executive of the Alexandria-based information technology company, declined to disclose specifically what further actions the company will take. But in a statement issued Wednesday, Reis said that "the Halifax board of directors is dedicated to the recovery process and plans to assert these claims."

Spokesmen for the banks named in the suit, which was filed last month, declined to comment on the case. Douglas D. Callaway, an attorney for Wachovia, said the bank will file a response within three weeks.

Mary Adams Collins, 32, was fired from her $50,000-a-year job as controller of Halifax's Richmond-based subsidiary, Halifax Technology Services Division, on March 4 after discrepancies in the company's financial records were traced to hundreds of checks--some of them handwritten and made out to cash--totaling more than $15.4 million, according to Halifax's suit. The company said its total losses, including legal fees and other damages, top $20 million.

Trading on Halifax stock was halted on March 17 and didn't resume until Sept. 13.

According to court documents, Collins had been issuing corporate checks to herself over a four-year period, as much as $300,000 a week. Collins was sentenced Sept. 9 to 6 1/2 years in prison and five years of supervised release. She was also ordered to pay $15 million in restitution.

"She is contrite and very remorseful," said Michael Morchower, Collins's attorney. Collins, who has an 11-month-old daughter, is scheduled to turn herself over to authorities within the next week, he said. No charges are expected against her husband, Shawn, who believed that she was wealthy through an inheritance, Morchower said.

"It was just a matter of supporting a lifestyle," and she intended to pay the company back with profits from an ostrich farm and a race-car team she bought with Halifax money, he said.

Those ventures never turned a profit. She purchased real estate, jewelry and automobiles, traveled on Halifax's dime, and altered company records to conceal her theft, according to a statement of fact signed by Collins filed in the U.S. District Court for the Eastern District of Virginia in Richmond.

To date, the company has recovered about $3 million, including $2 million in compensation from insurance, Reis said. "The troops responded very well, and we've not lost a single customer or lost any key personnel" since the scandal broke, Reis said.

Officials at Halifax, which employs 650 people nationally and about 200 locally, say the company is getting back on track. The company restated earnings for its 1997 and 1998 fiscal years and the first three quarters of 1999, which were affected by the embezzlement. For the first quarter of fiscal 2000, which ended June 30, the company reported $116,000 net income, compared with a $2.3 million loss a year ago, despite $450,000 in embezzlement-related charges during the quarter.

"Clearly, our interest is to put all of this behind us and put all of our resources in market segments where there are opportunities," including information technology, Reis said. Halifax had $81.8 million in revenue in fiscal 1999. Halifax is building up its information technology services, which account for about 75 percent of its revenue.

The company announced this week that its accountant, Ernst & Young LLP, resigned.

In a document filed with the Securities and Exchange Commission by Halifax, Ernst & Young did not cite disagreements with the company. But in a letter the auditor sent to Halifax, Ernst & Young said it was resigning "in light of current circumstances involving our relationship." Between 1996 and 1999, Ernst & Young conducted two major audits for Halifax.

Ernst & Young declined to comment on its resignation.

Shares of Halifax closed up 12 1/2 cents yesterday at $6. Signet Bank and Central Fidelity Bank, which were involved at the time of the embezzlement, later merged with Charlotte-based First Union and Atlanta-based Wachovia, respectively.

Staff writer Brooke A. Masters in Richmond contributed to this report.