We opened a new account for a business customer who deposited three very stale dated checks that somehow weren't noticed by the CSR. Two of the checks were returned (endorsement/return to maker). The other actually cleared; however, after conducting more thorough due diligence on the custoemr we believe that the check was deposited fraudulently. Are we obligated to release the funds to the client after the extended hold on the check expires? (It was placed after the other checks were returned). Can we call the person who wrote the check (dated over two years ago) to ask if they want it to be paid? Any other options/thoughts? Thanks for the help!

You're really in a bit of a box here. I assume the person who wrote the two-year-plus old check is not your depositor. Contacting him or her isn't your call; payment of that check is a matter between him or her and the bank the check is drawn on, and that bank only has/had until its midnight deadline to return the check unpaid. If it's been paid, you don't really have a legit reason not to release the funds, and the matter is between the issuer and payee on the check.

On the obviously related question, I assume you're in the process of kicking your customer to the curb, if the account isn't already closed.