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What is holding the bag?
A person who is said to be "holding the bag" is the person the blame is lumped on for doing something usually a group of people partook in. The person who is left holding the bag is generally the scapegoat.
The term "holding the bag" is not used as widely as it was 20 years ago.
Some kids are stealing candy from the grocery store and are stuffing it in a backpack. As the manager comes each kid furiously tries to hand the backpack to one another so they are not the one caught with the evidence. The kid who ends up with the backpack while the other kids scamper has been left holding the bag. (literally! and I suspect this type of scenario is where the term was derived from originally)
holding the bag - video
Holding the bag - what is it?
Looking stupid, caught out, stood up etc.
See: the bag
"Nobody leaves Diamond Joe Quimby holding the bag!"