This section contains the nature of the case and procedural background.

McNally (D) and Howard Hunt were active in the Democratic Party in Kentucky. Hunt was made chairman of the Democratic Party and given de facto control over selecting insurances agencies from which the State would purchase its policies. The Wombell agency agreed to share commissions with Hunt. From 1975 to 1979 there were $851,000 in commissions funneled to 21 separate insurance agencies designated by Hunt. One of those companies was controlled by Hunt and was nominally owned and operated by D. Almost $200,000 was passed into the hands of McNally and others. D was charged with a scheme to defraud the citizens of Kentucky of their right to conduct its affairs honestly and obtaining money and other things of value by false pretenses and a conspiracy to violate the mail fraud statute. D was convicted and appealed, and the conviction was upheld. D appealed on the basis that he was not a fiduciary to the public.

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