U.S. v. Lange

• Decision Date: 22 March 1976
• Docket Number: No. 75--2022,75--2022
• Citation: 528 F.2d 1280
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Andrew LANGE, d/b/a Lange Construction Company, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1280

528 F.2d 1280

UNITED STATES of America, Plaintiff-Appellee, v. Andrew LANGE, d/b/a Lange Construction Company, Defendant-Appellant.

No. 75--2022.

United States Court of Appeals Fifth Circuit.

March 22, 1976.

Richard T. Simmons, Jr., Asst. Federal Public Defender, John Volz, Federal Public Defender, New Orleans, La., for defendant-appellant.

Gerald J. Gallinghouse, U.S. Atty., John H. Musser, IV, Mary W. Cazalas, Asst. U.S. Attys., New Orleans, La., for plaintiff-appellee.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before WISDOM and GEWIN, Circuit Judges, and MEHRTENS, District Judge.

GEWIN, Circuit Judge:

Appellant Andrew Lange was indicted and tried as an individual ¹ for making a false statement in a matter within the jurisdiction of a federal agency in violation of 18 U.S.C. § 1001. ² After the trial judge denied his motion for a directed verdict of acquittal, Lange was convicted by the jury. His sentence was suspended and he was placed on active probation for 24 months. During its deliberations, the jury sent a note to the court stating that it was 'Hung up.' The judge requested the jury to continue to deliberate and the guilty verdict was returned thereafter.

The tone of this case and the nature of the evidence was succinctly and accurately characterized by the learned and experienced trial judge. He made the following observation at the time of sentencing Lange:

On the basis of the information at my disposal, Mr. Andrew Lange, the defendant herein, is a law-abiding citizen and a good family man, and a regular church-goer. Furthermore, I will state for the record, I have my own doubts that he had specific intent to submit a fraudulent statement to an agency of the United States (G)overnment.

After a thorough review of the record, it is our conclusion that the evidence of Lange's specific intent to make a material misrepresentation was insufficient to create a jury question and that his motion for a directed verdict of acquittal should have been granted.

The basis of the prosecution and conviction was Lange's signing an 'all bills paid' affidavit ³ for the Community Improvement Agency (Agency). The Agency is a local instrumentality of the City of New Orleans that receives some of its funds from the Department of Housing and Urban Development (HUD). One of the Agency's functions is to finance the relocation of persons who are displaced by urban renewal projects in the city. If, for example, such a person desires to move to a sub-standard dwelling, the Agency funds the cost of remodeling the residence. The cost of the work must come within certain limitations and the work must bring the dwelling up to existing building code standards.

Mrs. Genevieve Johnson was a relocation victim of New Orleans' first urban renewal project. She desired to be relocated in a sub-standard residence in Covington, Louisiana and the Agency sought to fulfill this desire. However, it was unfamiliar with building contractors in the Covington area and requested that the city's Chamber of Commerce recommend a reputable contractor who would make the necessary repairs.

Pursuant to this request Andrew Lange was contacted and on February 23, 1973 the Agency was notified that he would undertake the repairs at a cost of $5,200. Lange was informed that Mrs. Johnson was entitled to only $5,000 in benefits. He lowered his bid to this price and it was accepted.

Lange commenced the repairs shortly thereafter. In the course of the work, Mr. Eddie Triggs, a social service officer of the Agency, testified that he discussed the project with Lange and explained that the Agency, hence the Johnson contract, was federally funded. ⁴ By late March Lange had completed the repairs to Mrs. Johnson's satisfaction. ⁵

Eddie Triggs explained to Lange that in order to receive reimbursement for the work, it was necessary that he and Mrs. Johnson sign the 'all bills paid' affidavit. On March 26 the two signed such a document and Lange received $4000 from the Agency. On April 27 Lange received a check for the remaining $1000.

The evidence revealed that Lange obtained a large part of the supplies utilized on the Johnson residence from Wickes Lumber and Building Supplies (Wickes). At the same time that he was performing the Johnson repairs, he was working on another and much larger job for one Landrum. Wickes also supplied much of the material for the latter contract. Wickes billed Lange at the end of each month, and when Lange paid Wickes he did not identify the payments by the job on which the supplies were used.

On March 15 Lange paid the February bill in full, but this bill apparently arose out of materials for the Landrum contract that had been purchased in February. The materials for the Johnson repairs were acquired by Lange from March 1 through March 13. The only evidence of these purchases are carbon copies of the sales invoices or delivery tickets. These copies contain Lange Construction Company's name and address as the purchaser, all are stamped with the word 'CHARGE' and all but two, which are labelled 'INVOICES,' are signed 'Andrew Lange Sr.' The cost of the materials and supplies represented by these documents totalled $1,324.97 and was never paid by Lange. This non-payment is the cause of the prosecution.

These invoices or receipts were introduced into evidence through the testimony of Charles Cucchiara, an employee of Wickes. ⁶ Mr. Cucchiara testified that Wickes had been paid $1000 by a federal agency in settlement of the balance represented by the invoices. He also testified, however, that the purchases made by Lange in March would not be due until April 10 and that these purchases were not due on March 26 or 27. Neither the end-of-the month statement that Lange should have received for the March purchases nor a copy of it was ever introduced into evidence. Cucchiara did not have a record of a statement sent to Lange at the end of March. He did have a copy of such a statement sent to him at the end of April. The statement Cucchiara had for March referred to another person named Lange and not to the appellant Lange. ⁷ The only evidence the government introduced concerning any obligations of Andrew Lange for the Johnson repairs were the sales invoices for the purchases in March. A lien against the Johnson residence for Lange's failure to pay for the materials was not filed until June of 1973.

Cucchiara testified that he had discussed Lange's debts to Wickes in March--but that this discussion concerned the Landrum supplies that were supposed to be paid for on a cash basis. He stated that he did not discuss Lange's entire account until April. He also said that Lange had an outstanding obligation during March for the Johnson purchases, but, again, that this obligation was not due until April 10.

Lange had several persons testify to his reputation for honesty and his general good reputation. The government offered no witnesses in rebuttal of this testimony. Andrew Lange also took the stand in his own behalf.

Lange's testimony revealed that at the time of trial he was fifty-one years of age, had been married thirty-four years and was the father of ten children. He had achieved a sixth grade education before World War II. During that conflict he served as a truck driver under General Patton and afterwards he returned to school and completed his education at the tenth grade level. He worked as a laborer for contractors from 1945 to 1970. In 1971 he went into business for himself, incorporating as Lange Construction Company. He had no experience as a bookkeeper, as evidenced by his failure to identify the materials and supplies purchased with the specific contracts being performed. In 1974 he was adjudicated a bankrupt.

Lange further testified that the Johnson contract was the first time he had dealt with the Agency. He had paid in full all labor costs that arose from the Johnson job. He thought he had paid the Johnson bills in full at the time he signed the affidavit. ⁸ He testified that he had never received a statement in April for the Johnson materials and that the filing of the lien was his first notice of indebtedness to Wickes for that contract. This testimony was not contradicted.

The prosecution's impeachment of Lange, when viewed most favorably to the government, was directed toward proving that it was incredible for Lange to claim that he did not know he owed money for the materials purchased in March when he signed the affidavit. Lange responded that to the best of his recollection he had not received a statement in April. ⁹

In this court Lange argues several grounds for reversal. He contends that the evidence of specific intent is insufficient to support the conviction; the district court should have given requested jury instructions concerning the meaning of the term 'false' as used in § 1001; ¹⁰ the evidence was insufficient to support a finding that the affidavit was a matter within the jurisdiction of a federal agency; ¹¹ the trial court's instruction concerning evidence of good reputation was incorrect and the court erred in refusing a requested instruction as to such evidence. ¹² Since we have concluded that Lange's first specification of error is meritorious, we find it unnecessary to treat his other contentions in detail.

Proof of five elements is essential to sustain a conviction under the false statement proscription of § 1001: (1) a statement, (2) falsity, (3) materiality, (4) specific intent, and (5) agency jurisdiction. ¹³ With respect to the second requisite, it is doubtful whether in this case the government even proved the falsity of the March 26 affidavit. We will assume, however, that this factor was proved because it is our firm conviction that the necessary mens rea was not shown.

We are fully cognizant of the principles that it is the proper and exclusive function of the jury to determine the guilt or innocence of a defendant, United...