This is archived content from the U.S. Department of Justice website. The information here may be outdated and links may no longer function. Please contact webmaster@usdoj.gov if you have any questions about the archive site.

808. Compensating Balances

Misuse of correspondent bank balances may be charged as a misapplication in situations in which there is a detriment to the bank and a benefit to an insider. In one such case, bank officers conspired to misapply the monies of the first bank by using those funds to maintain compensating balances in the second bank in return for a loan by the second bank to an officer at preferential interest rates. United States v. Mann, 517 F.2d 259 (5th Cir. 1975), cert. denied, 423 U.S. 1087 (1976). See also United States v. Brookshire, 514 F.2d 786 (10th Cir. 1975).

[cited in JM 9-40.000]

Updated January 21, 2020