U.S. v. Machi, 96 Cr. 734-01 (HB).
| Decision Date | 01 May 1997 |
| Docket Number | No. 96 Cr. 734-01 (HB).,96 Cr. 734-01 (HB). |
| Citation | 962 F.Supp. 442 |
| Parties | UNITED STATES of America, Plaintiff, v. Salvatore MACHI, Defendant. |
| Court | U.S. District Court — Southern District of New York |
Geoffrey R. Kaiser, Assistant U.S. Attorney, New York City, for U.S.
David H. Weiss, New York City, for Defendant.
By oral opinion delivered April 2, 1997, I sentenced the defendant for conspiracy to violate and substantive violations of 18 U.S.C. § 1920. The sentence was based in part on a disputed determination of the appropriate offense level under the Sentencing Guidelines. I write now to clarify my reasoning on this issue, which the Second Circuit has yet to address.
Defendant Salvatore Machi pled guilty to a two-count indictment charging him with: (1) conspiracy to falsely represent his employment status in connection with applications for worker's compensation payments in violation of 18 U.S.C. § 1920 and (2) substantive violations of 18 U.S.C. § 1920 for such false representations. The government and defendant disagree as to the appropriate calculation of the offense level under the Sentencing Guidelines. For the reasons discussed below, I adopt defendant's argument and sentence him accordingly.
The relevant facts are not in dispute. Mr. Machi was employed as a food service foreman for the Department of Veterans Affairs Medical Center until July 1990. Presentence Report at ¶ 10. In July 1990, Mr. Machi filed a claim for worker's compensation under the Federal Employees Compensation Act, 5 U.S.C. § 8101, et seq., based on an alleged lower back injury. Id. Mr. Machi continued to work intermittently until December 1990, at which time he suffered a recurrence of his back injury. Id. at ¶ 11. From December 1990 to March 1996 Mr. Machi received over $122,000 in worker's compensation payments. Id. at ¶ 12. Unbeknownst to the government at the time, Mr. Machi was apparently running various limousine businesses from 1990 to 1996. Id. at ¶¶ 20-47.
During the period of his disability, Mr. Machi occasionally filed certain forms with the Office of Workers Compensation Programs ("OWCP"). Id. at ¶ 13. The forms request information in order to determine whether there have been any changes in the claimant's employment or medical status since the filing of the initial claim. Id. at ¶¶ 14-15. Mr. Machi repeatedly misrepresented his employment status on these forms by failing to disclose his limousine business. Specifically, in response to questions asking whether Mr. Machi had been self-employed during the relevant periods covered by the forms, Mr. Machi either failed to respond or responded in the negative. Id. at ¶¶ 16, 17, 40, 41. The issue in dispute is whether all of Mr. Machi's misrepresentations on these forms from 1990 through 1996 are covered by the indictment to which Mr. Machi has pled guilty.1
Defendant contends that his conduct in failing to report his self-employment was not criminalized until September 30, 1994, when 18 U.S.C. § 1920 — the statute under which Mr. Machi was charged — was amended. The pre-amendment version of Section 1920 reads:
Whoever makes, in an affidavit or report required by section 8106 of title 5 or in a claim for compensation under subchapter I of chapter 81 of title 5, a statement, knowing it to be false, is guilty of perjury....
The amended version of the statute reads:
Whoever knowingly and willfully falsifies, conceals, or covers up a material fact, or makes a false, fictitious, or fraudulent statement or representation, or makes or uses a false statement or report knowing the same to contain any false, fictitious, or fraudulent statement or entry in connection with the application for or receipt of compensation or other benefit or payment under subchapter I or III of chapter 81 of title 5, shall be guilty of perjury....
The principle difference is that the earlier version applies only to false statements made in an "affidavit or report required by section 8106 of title 5."2 By contrast, the new version applies to any fraudulent statement made "in connection with the application for or receipt of" benefits. Defendant argues that because he was not required under section 8106 to file the forms relied upon by the government in the indictment, the earlier version of the statute cannot apply to his conduct'.3
Section 8106 applies to partially disabled individuals and specifically authorizes the Secretary of Labor to require a partially disabled employee to report his earnings periodically. 5 U.S.C. § 8106. Mr. Machi, however, was not partially disabled. Rather, he was classified by OWCP as temporarily totally disabled. Any reports filed by Mr. Machi were either filed voluntarily or pursuant to the Secretary's presumed authority to require reports from totally disabled individuals under 5 U.S.C. § 8105, which applies to totally disabled individuals. See United States v. Austin, 817 F.2d 1352, 1355 (9th Cir.1987) (); Brumley v. U.S. Dep't of Labor, 827 F.Supp. 1409, 1414 (E.D.Ark.1993) ().
In response, the government contends that although defendant was temporarily totally disabled (and section 8106 applies only to the partially disabled), the department was still authorized to seek the information from him. The government is likely correct in this regard, see, e.g., id., but the department's authority to seek the information is not the issue here. Rather, by its terms, section 1920 applies only to reports "required by section 8106."
I have located only one case directly addressing this less than garden-variety issue. In U.S. v. Dorey, 711 F.2d 125 (9th Cir.1983), the Ninth Circuit reversed a conviction for violation of 18 U.S.C. § 1001, the false statement statute, because the indictment charged that the false statements were made on a report required by section 8106. The Dorey court held that, because the defendant was temporarily totally disabled, section 8106 did not require him to file any report. Id. at 128. Though Dorey involved an indictment under section 1001, the language in the Dorey indictment that limited the charges to false statements made on reports required by section 8106 effectively limited the indictment to a section 1920 violation such as the one at issue here. The language of Dorey court is persuasive, and it follows that the pre-amendment version of section 1920 cannot reach Mr. Machi's conduct.
Although the government is correct in its assertion that the Ninth Circuit later limited the holding in Dorey, it did so only in cases in which defendants were charged with violations of 18 U.S.C. § 1001 without any reference to section 8106. See U.S. v. Olson, 751 F.2d 1126, 1127-28 (9th Cir.1985) (); U.S. v. De Rosa, 783 F.2d 1401, 1407-08 (9th Cir.1986) (); U.S. v. Austin, 817 F.2d 1352, 1354 (9th Cir.1987) (); see also U.S. v. Kappes, 936 F.2d 227, 231 (6th Cir.1991) (). Thus, what these later cases stand for, at best, is that "even if the Department [of Labor] has no right under § 8106 to require earnings reports from those temporarily totally disabled, it can still require them pursuant to an implied authority under § 8105 []." Brumley, 827 F.Supp. at 1414. Though section 1001 thus reaches false statements made by those totally disabled because it is a catch-all false statements statute, section 1920 does not reach such statements because they are not "required" by section 8106.4
Accordingly, the loss amount here, required for the guideline determination is reduced to the $20,000 to $40,000 range, which requires a specific offense characteristic upward adjustment of 4 levels. When added to Mr. Machi's base...
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