Hi CellarDweller, and welcome to Scamwarners.
First off, I can assure you that the bank drafts are either fake, or drawn on the hijacked bank accounts of other victims (I suspect the latter). They will seem to clear at first, but WILL eventually come back as fake or stolen. Does you friend have the cash to cover the draft? If he has the cash, he should deposit it back in the account right away, not touch it for any reason, and notify the bank manager. If he cannot cover the draft, he needs to speak with the bank manager right away, and explain what happened. I'm afraid he will owe the bank for the bad draft, but some banks will work out payments.
Reporting the scam to the police is also a good idea, as it will show that your friend is a victim here, not a criminal. Also, under NO circumstances should your friend accept another draft, wire transfer, or anything else. Once a victim has deposited a cheque/draft/money order, the scammers will try to hit him with more very quickly, so that they can get the maximum money out of him before the bank twigs on the first deposit.
CellarDweller wrote:He also says he contacted the people, who said the bank drafts are legit, and all he's doing is forwarding funds to other people, which is completely legal.
This is a lie. These scammers want your friend to cash as many drafts as possible before the poop hits the fan, so of course they are going to tell him that the drafts are real and the "deal" is legal. Why would criminals who are using your friend to launder money admit that the drafts are fake/stolen?
As for arrest, if your friend comes forward and is honest about what happened, it is unlikely. Most often, the people who wind up facing charges are those who blithely go along cashing these drafts until the bank twigs and the police are notified, or worse, those who realize that it is a scam and continue anyway.
Please give us a bit more info on exactly what happened, so that we can give more specific advice. Also, we are a victim support group and do not report people who have fallen for a scam to the authorities. Your friend should not be afraid to post here.
Edit- sheboppe's advice is also right on.
@Sheboppe- tandem posting