So, it appears the money was used for its intended purpose, but it was done through a series of transactions where the payee exchanged cashiers checks for other cashiers checks payable to himself and his medical service providers?
Personally, I see no basis for a SAR.
As for the outstanding cashiers check in his name, if he:
* is alive, then it's still his money and
* if he has died it is an asset of his estate.
I'm missing something, right? This certainly wasn't done according to Hoyle, but the money was a gift and was not taxable. The people contributing the funds were not defrauded. Aside from the ineptitude of your dearly departed branch personnel, I'm not certain what is troubling you.
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In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.