Signing the checks of another person is forgery and potentially fraud if the payee is injured. However, unless someone complains to the police/sheriff, nothing is likely to happen, and even if someone does complain, the district attorney isn't likely to be interested in the case, unless there is proof of embezzlement/theft.
The sister could get a power of attorney from the grandmother and thereby validate the prior transactions via the legal doctrine of ratification. That would be the easiest solution to the problem. However, if the grandmother is incapacitated and cannot grant a power of attorney, then it may be necessary to ask the court to appoint someone conservator for your grandmother.
The easiest way to do this is to contact county adult protective services and ask for an investigation. If they think that there is a problem, they will ask the court to appoint a conservator.
Hope this helps.
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