My sister's ex-boyfriend convinced her to lend money to him so that he can lend it to some unidentified person. She lent him $25 000, and her ex probably lent $63 000 of his own money to this unidentified person. So the principle is assumed to be $88 000. This individual should have repaid the loan in January 2018, but they did not repay until October 13. The method of payment was very strange:
The borrower requested my sister to provide them her banking information (bank name, transit number and account number).
They walked into a branch of the bank with a $96 800 cheque (presumably $88 000 + 10% interest), advised the teller of the information of the recipient and deposited. The problem, however, is that on October 18, the cheque bounced for non-conforming signature. The online banking portal showed the name of a person, presumably the writer of the cheque, when she talked to her ex, he denied knowing who the person was.
This series of events is highly suspicious to me, I do not understand this at all. Non-conforming signature? Does that mean the cheque was fake or the signature was forged and the bank caught it so they refused to clear? If so, should I advise my sister to file a report with the local police?
Edit: my sister does not know who the money is eventually loaned to, but her ex does. The borrower of this money appears to be a Chinese citizen with permanent resident status in Canada (for reference, my sister and I are Chinese immigrants who became Canadian citizens, and her ex immigrated from Hong Kong to Canada).
Why is the Chinese connection so important? Because my sister just received word from her ex that the borrower wishes to wire transfer (meaning irreversible) money in Chinese Yuan to a Chinese bank account. He asked whether we have a Chinese bank account held by a Chinese citizen, and we gave our mother's account in China (she is a Chinese citizen who also has permanent residence status in Canada). If the money is to show up in her account, it cannot be taken back and I will promptly wire the money to Canada after converting it to CAD or USD.