Hyslop v. United States, 16032.

• Decision Date: 30 January 1959
• Docket Number: No. 16032.,16032.
• Citation: 261 F.2d 786
• Parties: David Roland HYSLOP, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

261 F.2d 786 (1958)

David Roland HYSLOP, Appellant, v. UNITED STATES of America, Appellee.

No. 16032.

United States Court of Appeals Eighth Circuit.

December 31, 1958.

Rehearing Denied January 30, 1959.

Joseph T. Votava, Omaha, Neb., for appellant.

Robert H. Berkshire, Asst. U. S. Atty., Omaha, Neb. (William C. Spire, U. S. Atty., Omaha, Neb., on the brief), for appellee.

Before GARDNER, Chief Judge, and WOODROUGH and VAN OOSTERHOUT, Circuit Judges.

GARDNER, Chief Judge.

This case involves an action to recover forfeitures and damages under the so-called False Claims Act. 31 U.S.C.A. § 231. The appellant will be referred to as defendant.

Defendant was indicted under Section 1001, Title 18 U.S.C.A. So far as here pertinent the civil action is based upon Section 231, Title 31, U.S.C.A. which provides as follows:

"Any person not in the military or naval forces of the United States, or in the militia called into or actually employed in the service of the United States, who shall make or cause to be made, or present or cause to be presented, for payment or approval, to or by any person or officer in the civil, military, or naval service of the United States, any claim upon or against the Government of the United States, or any department or officer thereof, knowing such claim to be false, fictitious, or fraudulent, or who, for the purpose of obtaining or aiding to obtain the payment or approval of such claim, makes, uses, or causes to be made or used, any false bill, receipt, voucher, roll, account, claim, certificate, affidavit, or deposition, knowing the same to contain any fraudulent or fictitious statement or entry, or who enters into any agreement, combination, or conspiracy to defraud the Government of the United States, or any department or officer thereof, by obtaining or aiding to obtain the payment or allowance of any false or fraudulent claim, or who, having charge, possession, custody, or control of any money or other public property used or to be used in the military or naval service, who, with intent to defraud the United States or willfully to conceal such money or other property, delivers or causes to be delivered, to any other person having authority to receive the same, any amount of such money or other property less than that for which he received a certificate or took a receipt, and every person authorized to make or deliver any certificate, voucher, receipt, or other paper certifying the receipt of arms, ammunition, provisions, clothing, or other property so used or to be used, who makes or delivers the same to any other person without a full knowledge of the truth of the facts stated therein, and with intent to defraud the United States, * * * shall forfeit and pay to the United States the sum of $2,000, and, in addition, double the amount of damages which the United States may have sustained by reason of the doing or committing such act, together with the costs of suit; and such forfeiture and damages shall be sued for in the same suit."

The indictment contained two counts. The first count charged:

"That David Roland Hyslop, on or about the 2nd day of September, 1953, at Vermillion, in the District of South Dakota, did knowingly and willfully, in a matter within the jurisdiction of a department or agency of the United States of America, to-wit, the Department of the Army, conceal, and cover up by a trick or scheme a material fact and did make a false representation, knowing the same to be false, in that said David Roland Hyslop did knowingly and willfully falsify the quality and grade of a shipment of eggs furnished and offered for sale to the United States Army by causing certain `sample\' crates of eggs contained in such shipment and designated for inspection by United States Army officials to be secretly removed and certain other false and fraudulently marked cases of eggs of a higher grade and quality substituted therefor, and did conceal the material fact that the grade and quality of eggs offered for sale did not correspond to the grade and quality of the eggs contained in the substituted sample cases offered to the inspectors for inspection, all in violation of Section 1001, Title 18, United States Code Annotated."

The second count was substantially identical with the first except as to dates. To this indictment defendant entered a plea of guilty and was thereupon adjudged guilty and sentenced to pay fines upon each of the counts. Thereafter the present civil action was commenced to recover penalty and damages as provided in the False Claims Act. The complaint was in two counts and so far as here material reads as follows:

"1. This is a civil action brought by the United States of America as plaintiff under the provisions of Sections 3490, 3492, and 5438 of the Revised Statutes (31 U.S.C.A. §§ 231, 233) of which this Court has jurisdiction by reason of the provisions of Section 3491 of the Revised Statutes (31 U.S.C.A. § 232), as amended.

"2. Defendant David Roland Hyslop, at all times mentioned hereafter, was in the produce business with one Merlin Anderson operating the Anderson Produce Company, Vermillion, South Dakota, and the General Produce Company, Scotland, South Dakota, and now resides at 8331 California Street, Omaha, Nebraska, which address is within the jurisdiction of this Court.

"3. The defendant is not now, nor at any time mentioned hereinafter was, in the military or naval forces of the United States, or in the militia called into or actually employed in the service of the United States.

"4. During the period from on or about May of 1953, through on or about September of 1953, Sol Rich & Co., Inc., 1131 Fulton Market, Chicago, Illinois, and Wilson and Co. Inc., of Chicago, Illinois, were awarded contracts by the Department of the Army to supply eggs, domestic, packed, fresh, natural and processed, grade QMC II at varying unit prices which are identified as PO.FH 31880, PO.FH 34281, PO.FH 34293, PO.FH 34649, PO.FH 6844, PO.FH 6833, PO.FH 7135, PO.FH 7377, and Col. SC 1640, Col. SC 1641, Col. SC 1642 and Col. SC 1643 respectively.

"5. The Anderson Produce Company and the General Produce Company, through the efforts of the defendant, became the supplier of the eggs for the fulfillment of the prime contracts.

"6. At various times during the performance of the prime contracts the defendant did make, or cause to be made, present or cause to be presented, for payment on approval by the United States claims upon the Government of the United States knowing such claims to be false, fictitious or fraudulent.

"7. At various times during the performance of the prime contracts the defendant did for the purpose of obtaining, or aiding to obtain, the payment or approval of such claims by the United States make, use, or caused to be made or used false bills, receipts, vouchers, rolls, accounts, claims or certificates knowing the same to contain false, fraudulent or fictitious statements or entries.

"8. At various times during the performance of the prime contracts the defendant did knowingly and unlawfully agree, combine and conspire with Merlin Anderson, and others, to defraud the United States, or a department or officer thereof by obtaining or aiding to obtain the payment or approval of false, fictitious or fraudulent claims.

"9. Among the tricks, schemes and devices employed by defendant, without the knowledge of the plaintiff, in furtherance of the matters set forth in paragraph 6, 7, and 8 were:

(a) A government inspector\'s stamp which was used by government inspectors to identify cases of eggs selected for inspection was unlawfully used or caused to be used by the defendant to stamp cases containing eggs of superior quality and not representative of the lot presented.

(b) The defendant switched or caused to be switched cases of eggs marked for inspection or switched or caused to be switched the eggs in cases marked for inspection so as to permit only eggs meeting contract specifications to be inspected.

(c) The defendant included or caused to be included storage eggs in shipments contrary to the specifications of the contracts.

"10. The United States paid such false and fraudulent claims through reimbursement of the prime contractors.

"11. By reason of the promises and pursuant to the provisions of Sections 3490 and 5438 of the Revised Statutes, defendant became and is liable to pay to the United States the sum of $2,000 for each and every false, fictitious or fraudulent claim, false bill, invoice, certificate or transaction done or committed by defendant which constitute violations of the said Statutes; and in addition double the amount of damages which the United States has sustained by reason of the doing or committing of such acts, together with interest and costs of this suit.

"Wherefore, the United States, as plaintiff, demands judgment against the defendant for double damages and forfeitures as allowable by Statute, together with interest and costs of this suit.

"Count Two.

"1. Plaintiff incorporates by reference as if fully set out as part of this count the allegations contained in paragraphs 1, 2, 3, 5, 7, 8, and 9 of Count One of this complaint.

"2. Effective August 8, 1953, and August 31, 1953, Sol Rich & Co. Inc., 1131 Fulton

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