Question

g McGuire was an employee of First National Bank of Grayson (FNBG). FNBG participated in a Kentucky Housing Corporation (KHC) program in which KHC loaned money to financial institutions. The institutions would then make low-interest loans to low-income individuals who qualified for purchase of a home. FNBG received the funds and produced bogus paperwork for 80 loans but never loaned the money. Instead, they invested the money at a high rate of interest. Eventually the money was returned to KHC, but McGuire was charged with making false records and fraud. Can McGuire, as an employee, be held liable?

Answer 1

The court concluded truthfully, as he had done all the analysis and acknowledged the documentation and investment purposes.

The program scammed funds which might have been used for small-income housing by the government agency.

United States v. McGuire, 744 F.2d 1197 (Cir. 11, 1984).