I found some suspicious activity that led to a discussion that has me a bit confused and I'd like some opinions please.
John Doe is the authorized signer for Generic Charity - an unincorporated association.
Every month Mr. Doe brings a $1,200 check made payable to Generic Charity from a church in a community about 100 miles away and deposits $1,100 into Generic Charity's account and receives $100 cash back as part of a split deposit.
Later, Mr. Doe uses Internet Banking to transfer $1,100 from Generic Charity's account into his personal account. A review of the account activity shows that the funds are being used to pay personal/household expenses.
When I was making my Board report of SAR filings, this question came about, "Do we have liability for allowing Mr. Doe to conduct this activity?".
My justification for filing the SAR was that Mr. Doe is taking funds that are designated for a charitable organization and using them for his own benefit. That seems to be self-enrichment/embezzlement.
However, he is an authorized signer on the account. Legally, he could write a check from Generic Charity's account and deposit it into his personal account. He could even withdraw funds at the teller window since he's an authorized signer on the account. Does the Bank have specific liability to the stakeholders of Generic Charity because Mr. Doe is doing this through Internet Banking?
Wildcat basketball isn't a matter of life and death, it's much more important than that.