What is the ruling on money acquired unlawfully, when one feels remorse and is unable to return it to the employer for fear of imprisonment? Is it permissible to donate it as charity?

Your relative has committed a grave sin by taking unlawful money, forging, and betraying trust. He must repent to Allah and return the money to the administration by any possible means without informing them of the betrayal, unless informing the administration would protect other employees from accountability and harm, in which case he must inform them of the betrayal, even if it leads to his imprisonment. If he is unable to return it, he should give it as charity to the needy.