McGuire was an employee of First National Bank of Grayson (FNBG). ...

[jlmhmf]

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?

Question 2

Wilson was employed at the federal HUD office in Kansas City. HUD made the decision to close down the office. For nearly two years, there was very little work to do in the office. Wilson worked on closing the office, but for two years had a great deal of free time on the job. As a result, Wilson devoted much of his work time to building up his business called The Woodworks. He had HUD secretaries type his business plan and other documents. He was charged with conversion of government services. Wilson claims he used government resources only when no other tasks were assigned. Should he be convicted?

[mistyjohnson]

Answer to Question 1

The court held yes because he did all the work and knew the purposes of the paperwork and the investment. The scheme defrauded the government agency of funds that could have been used for low-income housing. U.S. v. McGuire, 744 F.2d 1197 (11th Cir. 1984).

Answer to Question 2

In U.S. v. Wilson, 636 F.2d 225 (8th Cir. 1980), the court held Wilson did not have the requisite intent to divert government resources. He may have committed a mistake in judgment but his conduct was not criminal.

[jlmhmf]

TYSM

[kthug]

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