Paternostro v. United States

• Decision Date: 27 December 1962
• Docket Number: No. 18810.,18810.
• Parties: Eldred J. PATERNOSTRO, Appellant. v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

311 F.2d 298 (1962)

Eldred J. PATERNOSTRO, Appellant. v. UNITED STATES of America, Appellee.

No. 18810.

United States Court of Appeals Fifth Circuit.

November 7, 1962.

Rehearing Denied December 27, 1962.

Virgil M. Wheeler, Jr., Edward J. Boyle, Clem H. Sehrt, New Orleans, La., for appellant.

Prim B. Smith, Asst. U. S. Atty., M. Hepburn Many, U. S. Atty., New Orleans, La., for appellee.

Before TUTTLE, Chief Judge, and POPE^* and GEWIN, Circuit Judges.

GEWIN, Circuit Judge.

This is an appeal from a conviction and sentence under an indictment containing two counts; the first of which charges the appellant with knowingly and willfully making a false statement to a special agent of the United States Internal Revenue Service in violation of Title 18 U.S.C.A. § 1001.¹ The second count charges that the defendant committed perjury before a United States Grand Jury in violation of Title 18 U. S.C.A. § 1621.²

Count one of the indictment alleges in substance that the appellant stated:

1. That it was not within his own personal knowledge that "graft money" was collected and distributed in the Third District of the New Orleans Police Department; and

2. That he did not solicit and receive any money from an operator of an illegal business in the Sixth District of the New Orleans Police Department; whereas, in truth and fact, said statements were false, and material to an investigation then being conducted by the Internal Revenue Service with respect to alleged unreported receipt of graft money distributed among members of the New Orleans Police Force.

Count Two, the perjury count, charges in substance that the appellant testified:

1. That he had never received any moneys in addition to his salary as a policeman other than revenue from a small restaurant;

2. That he had no personal knowledge of a system of organized graft while he was assigned to the Third District of the New Orleans Police Department; and,

3. That he had never solicited any moneys from operators of an illegal business in the Sixth District of the New Orleans Police Department; whereas, such testimony was false and material to the matter then being investigated or considered by the Grand Jury. Responsive to a motion for a Bill of Particulars, the Government confined its evidence in chief to the Third and Sixth Districts, reserving the right to use other evidence available in rebuttal.

Appellant filed his motion to dismiss Count One of the indictment for the reason that Title 18 U.S.C.A. § 1001 has no application to the factual situation herein presented. During the investigation mentioned, a special agent of the Intelligence Division of the Internal Revenue Service administered an oath to the appellant and propounded certain questions to him concerning the alleged illicit income which was the subject of the investigation. The answers of the appellant were essentially "No" or negative and these answers were later deemed to be false.³ This case squarely places before this Court the question of whether mere negative answers to certain questions propounded by Federal agents constitute "statements" within the meaning of that word as it appears in § 1001.

An excellent review of the statute under consideration is set forth in United States v. Bramblett, 348 U.S. 503, 75 S. Ct. 504, 99 L.Ed. 594 (1955); United States v. Gilliland, 312 U.S. 86, 61 S.Ct. 518, 85 L.Ed. 598 (1941); and United States v. Stark (D.C.Md., 1955) 131 F. Supp. 190. This section had its origin in a statute adopted about one hundred years ago in the "wake of a spate of frauds upon the Government". In its original form the statute clearly related to the presentation of false claims against any component of the Government to any officer of the Government. In 1934, the statute was revised largely at the request of the Secretary of Interior to cover "hot oil" shipments in the State of Texas. The Gilliland case held that the 1934 amendment, which eliminated the words "cheating and swindling", broadened the statute to its present form (with minor changes) and eliminated the restriction of its application to cases involving pecuniary or property loss to the Government. Thus the statute was broadened to include "any matter within the jurisdiction of any department or agency of the United States" and clearly showed "the congressional intent to protect the authorized functions of governmental departments and agencies from the perversion which might result from the deceptive practices described."

It seems clear that the alleged false statements in Gilliland and the alleged false statements under consideration in the instant case would not have been within the terms of the statute prior to the 1934 amendment. Bramblett holds that the statute has undergone no material change since the 1934 amendment.⁴ Appellant urges that the background and history of the section clearly demonstrate that its purpose was to protect the Government from the affirmative, aggressive and voluntary actions of persons who take the initiative; and to protect the Government from being the victim of some positive statement which has the tendency and effect of perverting normal and proper governmental activities and functions.

The position of the appellant is not novel or new. The question has been considered by a number of Circuit and District Courts. One of the most searching and thorough opinions is that of Judge Chesnut in the Stark case, supra, 131 F.Supp. 190. After developing the historical background in an unusually thorough manner, Stark concludes that negative answers, even under oath, by contractors to questions propounded by agents of the F.B.I. who were investigating an alleged bribery attempt, as to whether the contractors knew of money being given to officials of the Federal Housing Authority, were not "statements" within the meaning of the section. As to the negative answers there involved, the court concluded:

"* * * it is to be noted (1) that it was not in writing; (2) it purported to have been given under oath; (3) it did not relate to any claim by or on behalf of the defendants against the United States or any department or agency thereof; (4) it was not made by the defendants to obtain or retain any official position or employment in any agency or department of the government and (5) possibly more importantly, was not initiated or volunteered by the defendants but was only an answer given in response to a particular inquiry." (emphasis added)

Following the statutory construction doctrine of "ejusdem generis" the court considered the relationship of the word "statement" with the word "representation" which immediately follows it and concluded that a representation is more akin to a voluntary statement than a mere passive answer.

Although published later than the Stark case (decided 1955, published 1955), United States v. Levin (D.C.Col. 1953, published 1956) 133 F.Supp. 88, passed upon the precise question here presented in a well reasoned opinion by Judge Pickett of the Circuit Court of Appeals, 10th Circuit, sitting as a District Judge. In Levin, the defendant was charged with stating to an F.B.I. agent that he had never told anyone that he had information as to the identity of a ladies dinner ring; when, in fact, he had told a person that he did have such information. It was held that the answer was not "a statement" within the meaning of § 1001. If held otherwise, any inquiry into cases of a minor nature, even civil cases, if the citizen interrogated wilfully falsified his statements, would constitute a violation, and such person would be subject to a prison term of five years and a fine of $10,000, either or both. The statute does not require an oath, and the penalty provided exceeds the penalty for perjury. Such a construction, the opinion holds, would weaken the force and purpose of the perjury statute and it was there thought that Congress could not have intended such results.

"If the statute is to be construed as contended for here by the United States, the results would be far-reaching. The age-old conception of the crime of perjury would be gone. 18 U.S.C.A. § 1621. Any person who failed to tell the truth to the myriad of government investigators and representatives about any matter, regardless of how trivial, whether civil or criminal, which was within the jurisdiction of a department or agency of the United States, would be guilty of a crime punishable with greater severity than that of perjury."

* * * * * *

"An inquiry might be made of any citizen concerning criminal cases of a minor nature, or even of civil matters of little consequence, and if he wilfully falsified his statements, it would be a violation of this statute. It is inconceivable that Congress had any such intent when this portion of the statute was enacted. A literal construction of a statute is not to be resorted to when it would bring about absurd consequences, or flagrant injustices, or produce results not intended by Congress."

United States v. Davey (D.C.S.D.N.Y., 1957) 155 F.Supp. 175, had under consideration mere negative responses to questions by agents of the F.B.I., falsely made under oath, and it was there concluded that such negative responses did not constitute a "statement" within the meaning of the statute.

"But can it be said that when an accused person, a potential defendant, a suspect, grants an agent of the Federal Bureau of Investigation an interview and, in reply to an incriminating question, knowingly makes a negative answer, when truth and morality, but not the law, requires an affirmative reply, such answer perverts the authorized function of the Bureau? Is the authorized function of the Bureau to extract from the suspect only the truth, or, in view of the Fifth Amendment proscribing compulsory self-incrimination, to hear and record only such statement as the accused desires freely and voluntarily to make?"

The Davey case quotes with approval the rule of construction laid down by this Court...