Re: SMTP Relay with SendAs Permissions not working.

Hi Dkel22,

In regard to the issue, the specific error message could be caused by various reasons. To solve the issue, please try the steps below:

1. Please check if the user E can use SMTP relay as normal.
2. Please check if the user E has the proper permission for the mail-enabled security group. You can use “Get-RecipientPermission” for the group to see if the user E is in the list.
3. Please check if the user E is licensed and doesn't have an on-premises mailbox.
4. Please follow the instructions to set up IIS(Internet Information Services) as your SMTP relay server instead of use the custom scripts.

For more details, please refer to the links below:

Create a Security-Enabled Distribution Group

Give Users Send As Permission

SMTP Relay configuration issues