We have a customer that continuously has outstanding cashier's checks payable to themselves. The customer buys a cashier's check for $25,000.00 to $30,000.00 using a check or cash. On a rotating basis, they continue to purchase another check using the prior check sometimes adding or withdrawing funds as if it were a savings account. This activity is always done right before the check becomes stale dated. We recognize this as hiding money or even money laundering but is there a form letter that anyone uses to address this with the customer to refrain from using the cashier's check system as an offsite savings account?

We do not allow this type of activity and simply tell the customer this. The next time he comes in ask for an explanation and then advise him that you cannot allow the activity to continue. Often this activity takes place because they are hiding the funds from legal action.
I would search your local court records for a bankruptcy or other legal action and perhaps a SAR is warranted.

This issue has been raised here a number of times... The "fix" is pretty simple: Establish and enforce a policy that a cashiers check can be 1) deposited or 2) cashed. It cannot be used, either in whole or in part, to purchase another cashiers check. There is no need for a letter, your tellers can either explain it or summon someone who can.

It's not like someone can make you sell them a cashiers check....

And for the record, cashier's checks don't expire or become stale dated. They remain valid claims upon the issuing bank until the funds are surrendered under state abandoned property.