U.S. v. Facchini, s. 86-3094

Citation874 F.2d 638
Decision Date09 May 1989
Docket Number86-3097,Nos. 86-3094,s. 86-3094
PartiesUnempl.Ins.Rep. CCH 21,916 UNITED STATES of America, Plaintiff-Appellee, v. Danielle FACCHINI, Mark D. East, John C. Clinton, Thomas P. Croman, Anthony Horst, Robert Finley, Roger W. Richardson, Clifford W. Lloyd, Paul Clark, Katherine L. Richardson, Dana S. Rake, Cynthia Hoofard, Steven M. Job, Josephine G. Booth, David M. Hartzell, Philip Jackson, Joe L. Stephens, Gordon Weller, Thomas A. Peterson, Michael A. Pangle, David Hoffman, Carolyn A. Jackson, Richard T. Salas, Crystal L. Jones, Daniel L. Maher, Deanne Smith, Eddie Leo Card, Rick S. Reifenrath, and Jonathan Geissel, Defendants-Appellants. to 86-3099, 86-3101, 86-3102, 86-3104 to 86-3111, 86-3117, 86-3118, 86-3121, 86-3123, 86-3128, 86-3137 to 86-3140, 86-3148, 86-3122, 86-3154, 86-3161, 86-3177 and 86-3100.
CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)

Frank Noonan, Asst. U.S. Atty., Portland, Or., for plaintiff-appellee.

Steven T. Wax, Federal Public Defender, Portland, Or., for defendants-appellants (all defendants except Geissel).

Marc D. Blackman, Ransom, Blackman & Simson, Portland, Or., for defendant-appellant Jonathan Geissel.

Appeal from the United States District Court for the District of Oregon *.

Before GOODWIN, TANG, SCHROEDER, FLETCHER, PREGERSON, ALARCON, POOLE, BEEZER, WIGGINS, NOONAN and THOMPSON, Circuit Judges.

PREGERSON, Circuit Judge:

Ms. Facchini and the other appellants were convicted of violating 18 U.S.C. Sec. 1001 (1982), which prohibits a person from making materially false statements in a matter within the jurisdiction of a federal department or agency. We took this case en banc to determine whether the extent of federal involvement in a state unemployment insurance program justifies imposing federal criminal liability under section 1001 on claimants who made misrepresentations on applications for state unemployment benefits. We must also determine whether

other claimants who received federal unemployment benefits as a result of false statements made to state unemployment officials can be held criminally liable under section 1001.

BACKGROUND

The facts are not in dispute. Appellants applied to the Oregon Division of Employment for unemployment insurance benefits. They made false statements on initial or supplemental claim forms. As a result, they improperly received unemployment benefits. With regard to the source of the benefits, the appellants fall into two distinct categories. Most of the appellants ("first group") received only benefits paid by the State of Oregon. Four of the appellants ("second group") however, received federal compensation under a federal supplemental benefits program. 1

The appellants were indicted for violation of section 1001. They moved to dismiss the indictment on the grounds that the matters were not within the jurisdiction of a federal agency or department and that the false statements were not material. Upon denial of the motion, the appellants conditionally pleaded guilty under Fed.R.Crim.P. 11(a)(2), 2 reserving the right to appeal the denial of their motion to dismiss.

On appeal, a panel of this court affirmed the appellants' convictions, finding that "[t]he scope of Sec. 1001 ... follows the federal government's access to information." United States v. Facchini, 832 F.2d 1159, 1161 (9th Cir.1987), vacated, 851 F.2d 1221 (9th Cir.1988) (citing Bryson v. United States, 396 U.S. 64, 71, 90 S.Ct. 355, 359, 24 L.Ed.2d 264 (1969)).

ANALYSIS
1. UNEMPLOYMENT INSURANCE

Before deciding the issues presented by this appeal, we must first examine the relationship between the two unemployment insurance programs--state and federal--involved here. The first group of appellants received cash payments from an Oregon unemployment insurance program. The Oregon program was established under the federal unemployment compensation system created by Congress in 1935. Or.Rev.Stat. Secs. 657.005 et seq. (1987); 49 Stat. 626 (codified at 26 U.S.C. Secs. 3301 et seq. (1982 & Supp. IV 1986)). The federal scheme permits a state to operate its own program, provided the Secretary of Labor (the "Secretary") approves the state's unemployment plan. 26 U.S.C. Sec. 3304. Of critical importance to our inquiry is this fact: when a state operates a federally-approved program under section 3304, not one cent of federal money goes to pay the unemployment benefits. See Or.Rev.Stat. Secs. 657.815(3) (providing that the state benefit fund is the sole and exclusive source for the payment of benefits under the Oregon unemployment insurance program). Thus, Oregon footed the entire bill for the benefits received by the first group of appellants.

Even when a state such as Oregon runs its own unemployment insurance program, there is federal involvement beyond the initial approval of the state plan. Under 42 U.S.C. Sec. 502(a) (Supp. IV 1986), the federal government provides funds for "the proper and efficient administration" of state unemployment insurance laws. The Secretary monitors the operation of the state plan and may stop payment of administrative funds if the state fails properly to administer its unemployment insurance laws. 42 U.S.C. Sec. 503(b) (1982). Thus, the federal government does play a limited role in a state's unemployment insurance program, but this role does not extend beyond administrative assistance.

The situation is somewhat different with respect to the second group of appellants. These appellants received compensation under a federal program established to provide federal funds for states to pay up to twenty-six weeks of additional unemployment compensation to persons exhausting their compensation rights under an existing

state program. See Federal Supplemental Compensation Act of 1982, Pub.L. No. 97-248, 96 Stat. 702 (codified at 26 U.S.C. Sec. 3304 note); see also Emergency Unemployment Compensation Act of 1974, Pub.L. No. 93-572, 88 Stat. 1869 (codified at 26 U.S.C. Sec. 3304 note). In contrast to Oregon's unemployment insurance program, benefits received under this program are paid out of the federal purse. We now address the elements of section 1001 relevant to this case.

2. SECTION 1001 JURISDICTION

Section 1001 states in full:

Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined not more than $10,000 or imprisoned not more than five years, or both.

(emphasis added). There can be no valid conviction under section 1001 unless both jurisdiction and materiality are shown. See United States v. Green, 745 F.2d 1205, 1208 (9th Cir.1984), cert. denied, 474 U.S. 925, 106 S.Ct. 259, 88 L.Ed.2d 266 (1985).

To satisfy section 1001's jurisdiction requirement, the false statement must concern the "authorized functions of an agency or department" rather than "matters peripheral to the business of that body." United States v. Rodgers, 466 U.S. 475, 479, 104 S.Ct. 1942, 1946, 80 L.Ed.2d 492 (1984). "A department or agency has jurisdiction, in this sense, when it has the power to exercise authority in a particular situation." Id.

Even though there may be jurisdiction under section 1001 when the false statement is not made directly to a federal agent, United States v. Kraude, 467 F.2d 37, 38 (9th Cir.), cert. denied, 409 U.S. 1076, 93 S.Ct. 684, 34 L.Ed.2d 664 (1972), and when the federal agency is not affected financially by the false statement, United States v. Gilliland, 312 U.S. 86, 91-93, 61 S.Ct. 518, 521-22, 85 L.Ed. 598 (1941), courts have refused to find jurisdiction unless a direct relationship obtains between the false statement and an authorized function of a federal agency or department. For example, in Rodgers, the Supreme Court found section 1001 jurisdiction where the defendant's false statements to FBI agents disrupted the FBI's statutorily authorized function of detecting and prosecuting crimes against the United States. 466 U.S. at 479-81, 104 S.Ct. at 1946-47. Moreover, in United States v. Balk, 706 F.2d 1056, 1059 (9th Cir.1983), section 1001 jurisdiction was found where falsified welder certifications were used to obtain work as a Navy contractor because the certifications related directly to the Navy's authority to hire contractors. Other such examples include: Bryson, 396 U.S. at 70-71, 90 S.Ct. at 359-60 (defendant's false affidavit related directly to the functioning of the National Labor Relations Board); United States v. Wolf, 645 F.2d 23, 25 (10th Cir.1981) (defendant's false certification of fuel oil as crude oil impinged directly upon the Department of Energy's statutory function of regulating oil products). See also United States v. Cartwright, 632 F.2d 1290, 1292-93 (5th Cir.1980) (finding section 1001 applicable to false statements by officer of a wholly-owned subsidiary of an institution insured by the Federal Savings and Loan Insurance Corporation because the FSLIC is authorized to monitor its insureds so as to prevent financial difficulties and the business dealings of the subsidiary have a "profound effect" on the health of the parent).

In the instant case, no such direct relation exists between the first group's false statements and an authorized function of the Department of Labor. 42 U.S.C. Sec. 502(a) imposes upon the Secretary the duty to certify the payment of administrative funds to approved state unemployment insurance programs. Under section 503(a), before the Secretary is authorized to certify payment of such funds, he must review the state's laws and find, inter alia, (1) This en banc decision rejects the position advanced initially by the government that the scope of...

To continue reading

Request your trial
47 cases
  • U.S. v. Ladum
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • April 17, 1998
    ... ...         Materiality is an essential element of a false statement charge under § 1001. United States v. Facchini, 874 F.2d 638, 641 (9th Cir.1989) (en banc). An indictment's failure to allege materiality, however, will not necessarily render the indictment ... When Ford left Dave's Shop in 1986, The Money Pit, Union Cash, and Division Cash had not even begun operating yet. It is not self-evident to us that it was foreseeable to Ford that tax loss from the stores that were in operation in 1986 would continue to 1989, or that there would be tax loss ... ...
  • U.S. v. Oakar
    • United States
    • U.S. Court of Appeals — District of Columbia Circuit
    • April 18, 1997
    ... ... at 482, 104 S.Ct. at 1947; see also United States v. Facchini, 874 F.2d 638, 642 (9th Cir.1989)(en banc). Unlike United States v. Tracy, 108 F.3d 473 (2d Cir.1997), the instant case does not involve statements ...         Of course these issues are not now before us. I mention them only to make the point that, on the one that is, the government's reading of the statute does not inevitably lead to a complete ... ...
  • State v. Pricewaterhousecoopers
    • United States
    • California Court of Appeals Court of Appeals
    • January 20, 2005
    ... ...         Defendants point us to Wilson v. City of Laguna Beach (1992) 6 Cal.App.4th 543, 555, 7 Cal.Rptr.2d 848, holding that an enactment should not be interpreted to include ... v. Facchini (9th Cir.1989) 874 F.2d 638, 643 [construing 18 U.S.C. § 1001].) ...         3. Factual Showing ...         a. DOI Operations ... ...
  • Prescott v. Slide Fire Solutions, LP
    • United States
    • U.S. District Court — District of Nevada
    • September 26, 2019
    ... ... See 18 U.S.C. 1001(a) ; United States v. Facchini , 832 F.2d 1159, 1161 (9th Cir. 1987), on reh'g , 874 F.2d 638 (9th Cir. 1989) (explaining how 1001(a)(2) does not require the government to ... ...
  • Request a trial to view additional results
2 books & journal articles
  • Pre-trial discovery
    • United States
    • James Publishing Practical Law Books Defending Drinking Drivers - Volume One
    • March 31, 2022
    ...as part of his defense to show the measures necessary to be taken to have a reliable test for horizontal gaze nystagmus. Van Griffin , 874 F.2d at 638. PRE-TRIAL DISCOVERY 4-19 Pre-Trial Discovery §410 While the Van Griffin court declined to say that every publication of every branch of gov......
  • "A watchdog for the good of the order": the Ninth Circuit's en banc coordinator.
    • United States
    • Journal of Appellate Practice and Process Vol. 12 No. 1, March 2011
    • March 22, 2011
    ...as if we had invented a machine that would go of itself"). (90.) U.S. v. Facchini, 832 F.2d 1159 (9th Cir. 1987), opinion on rehearing, 874 F.2d 638 (9th Cir. 1989) (en (91.) See Hale v. Norton, 437 F.3d 892 (9th Cir.), withdrawn & superseded, 461 F.3d 1092 (9th Cir. 2006), superseded, ......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT