Hello,

We recently had an incident where someone opened an account with us and we were able to prove that they were not who they claimed they were. They had stolen the identity of someone in another state. We are in the process of closing the account, however the "suspect" already funded the account by way of a Money Order.

Normally when an account is closed, we return any remaining funds to the member. In this case, we would be cutting a check in the name of the "real person" but sending it to the fraud address on file. We do not want to do this. Any ideas on what, if anything, we may be required to do. Can we retain these funds?

Be cautious in refunding monies to a criminal that were originated with a negotiable instrument. The item could still be returned as a forgery. Check with the police or law enforcement that notified you about the identity theft about the best way to proceed. They may be interested in retaining those funds on behalf of the victim. Otherwise, it would be prudent to place the monies into a cashier's check kept under dual control in a bank owned box along with an explanation until escheatment is required.