The term ``fraud or dishonesty'' shall be deemed to encompass all
those risks of loss that might arise through dishonest or fraudulent
acts in handling of funds as delineated in Secs. 453.8 and 453.9. As
such, the bond must provide recovery for loss occasioned by such acts
even though no personal gain accrues to the person committing the act
and the act is not subject to punishment as a crime or misdemeanor,
provided that within the law of the State in which the act is committed,
a court would afford recovery under a bond providing protection against
fraud or dishonesty. As usually applied under State laws, the term
``fraud or dishonesty'' encompasses such matters as larceny, theft,
embezzlement, forgery, misappropriation, wrongful abstraction, wrongful
conversion, willful misapplication or any other fraudulent or dishonest
acts resulting in financial loss.
[30 FR 14926, Dec. 2, 1965]
