You must have maxed out the Fireball skill for this. You can press SHIFT and click the fireball. Hold it until it reaches maximum strength. Once it hits the ground it blows up, knocking the targets down and killing them. After that, go to the desired target. When you see the blue highlight, let it go at the target. It will hit the ground, killing the guards. You will not get warned or have to pay any-fines. If you do this to a person, be careful -- once you kill them, their house will become available for purchase.