We have a customer that is the only signer on a Homeowners Association account. We discovered that over the past few months she has been transferring money/withdrawing money to her personal account. Further investigation showed other misappropriations of the HOA funds.
Our Corporate Authorization (which was signed by all the HOA directors) gives her the authority to initiate such transfers/withdrawals, but further investigation into the HOA bylaws show that all withdrawals are to be made by check. This is clearly a case of embezzlement and we will file a SAR. What is the best way to notify the other HOA directors, so they can seek legal action against the embezzler?

Call one (or all) of them and explain you are investigating some ireegular or unusual activity on the account which you felt they should be aware of. Do some questioning of the other HOA signers first.

There may or may not be suspicious activity. If the bylaws have changed, they may not have remembered to give them to the bank (ask for a new copy); she may have had their premission to do this. Becareful about acussing someone of embezzlement when you do not have the full story.

If you find the actions were not authorized, then you can work with the HOA to have her removed and possibly a new account opened so she will not have access to the account number. Check your internal systems to see if you can code the account in any manner to not allow withdrawal by check so this would not happend again if this is the way they still want it. (A check provides a good paper trail however).