U.S. v. Facchini, s. 86-3094
| Citation | 832 F.2d 1159 |
| Decision Date | 19 November 1987 |
| Docket Number | 86-3137-86-3140,86-3117,86-3121-86-3123,86-3148,86-3104-86-3111,86-3118,86-3127,Nos. 86-3094,86-3154,86-3161 and 86-3177,86-3097-86-3102,86-3128,s. 86-3094 |
| Parties | Unempl.Ins.Rep. CCH 21,877 UNITED STATES of America, Plaintiff-Appellee, v. Danielle FACCHINI, et al., Defendants-Appellants. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Mark D. Blackman and Steven T. Wax, Federal Public Defender, Portland, Or., for defendants-appellants.
Frank Noonan, U.S. Atty., Portland, Or., for plaintiff-appellee.
Appeal from the United States District Court for the District of Oregon.
Before WRIGHT, WALLACE and PREGERSON, Circuit Judges.
These consolidated appeals require that we determine whether 18 U.S.C. Sec. 1001 1 extends to false statements made to a state unemployment insurance program certified and supported by the federal Department of Labor pursuant to 42 U.S.C. Sec. 501 et seq. and 26 U.S.C. Sec. 3304. Ms. Facchini and the other appellants appeal their convictions under 18 U.S.C. Sec. 1001 for making false statements to the Oregon Division of Employment. They argue that their statements to the state department were not matters "within the jurisdiction of any department or agency of the United States" and that these misrepresentations were not material.
We find that the false statements to the Oregon Division of Employment were within the jurisdiction of a federal agency or department and that they were material. The convictions are affirmed.
The appellants applied for unemployment insurance benefits with the State of Oregon Division of Employment. Each gave false information on initial or supplemental benefits claim forms. On the basis of the information, the state improperly paid them unemployment benefits.
Our analysis of Sec. 1001 turns on the relationship between the federal and state governments in administering and supervising state unemployment programs. Oregon's program is certified and approved by the Secretary of Labor as provided in 26 U.S.C. Sec. 3303 and 42 U.S.C. Sec. 503. As a certified program, Oregon receives federal money to pay the cost of administration.
The Secretary of Labor and the President recommend to Congress the amount of money to be appropriated for each approved state program. Such recommendations "take into account such factors as the relationship between employment subject to State laws and the total labor force in the United States, the number of claimants and the number of job applicants, and such other factors as he finds relevant." 42 U.S.C. Sec. 1101(c)(4).
Employers within the state contribute through payroll taxes the insurance funds disbursed by the state. The federal and state governments cooperate in the administration of and accounting for these funds in an unemployment insurance program.
We consider first whether the appellants' statements to the state programs were "within the jurisdiction of any department or agency of the United States" before analyzing the issue of materiality.
Section 1001 applies broadly to "protect the authorized functions of governmental departments and agencies from the perversion which might result from ... deceptive practices." United States v. Rodgers, 466 U.S. 475, 480, 104 S.Ct. 1942, 1947, 80 L.Ed.2d 492 (1984) (quoting United States v. Gilliland, 312 U.S. 86, 93, 61 S.Ct. 518, 522, 85 L.Ed. 598 (1941)). In construing the term "jurisdiction" within Sec. 1001, we should not impose a "narrow or technical meaning." Rodgers, 466 U.S. at 480, 104 S.Ct. at 1947. "Section 1001 is a 'catch all,' reaching those false representations that might 'substantially impair the basic functions entrusted by law to [an] agency.' " United States v. Olson, 751 F.2d 1126, 1128 (9th Cir.1985); United States v. De Rosa, 783 F.2d 1401, 1407 (9th Cir.), cert. denied, --- U.S. ----, 106 S.Ct. 3282, 91 L.Ed.2d 571 (1986).
Jurisdiction does not require that federal money be spent or that a federal agency act in response to the false statement. Gilliland, 312 U.S. at 93, 61 S.Ct. at 522 () (cited in Rodgers, 466 U.S. at 480, 104 S.Ct. at 1946). Rather, a "valid legislative interest in protecting the integrity of official inquiries" is sufficient to establish jurisdiction. Rodgers, 466 U.S. at 481-82, 104 S.Ct. at 1947-48.
The scope of Sec. 1001, therefore, follows the federal government's access to information. Bryson v. United States, 396 U.S. 64, 71, 90 S.Ct. 355, 360, 24 L.Ed.2d 264 (1969) (). So long as a federal agency has statutory authority to gain access to information, that information is within the jurisdiction of a federal agency for the purposes of Sec. 1001. Rodgers, 466 U.S. at 479, 104 S.Ct. at 1946. ("The word 'jurisdiction' as used in the statute must mean simply the power to act upon information when it is received.")
This and other circuits have found agency jurisdiction based on statutory access to information. In United States v. Balk, 706 F.2d 1056 (9th Cir.1983), this court held that falsified documents submitted to a grand jury, a non-federal agency, were within Sec. 1001 because the proper and intended use of the documents related to a matter within the jurisdiction of the Navy, a federal agency. The falsified documents did not need in fact to be submitted to the Navy. 706 F.2d at 1059.
Similarly, in United States v. Canel, 708 F.2d 894 (3d Cir.), cert. denied, 464 U.S. 852, 104 S.Ct. 165, 78 L.Ed.2d 151 (1983), the Third Circuit upheld the appellant's conviction under Sec. 1001 for defrauding the Government of the Virgin Islands. 48 U.S.C. Sec. 1599, which provides that the Inspector General of the Interior Department audits the Government's accounts, established jurisdiction of the Interior Department for the purposes of Sec. 1001.
The Fifth Circuit has held that Sec. 1001 covered fraud perpetrated on a wholly owned subsidiary of a federally insured financial institution. United States v. Cartwright, 632 F.2d 1290 (5th Cir.1980). The court reasoned that the statutory authority of the FSLIC to examine records of insured institutions extended to records of their wholly owned subsidiaries. That statutory access to information provided ample grounds for finding agency jurisdiction. 632 F.2d at 1293.
The Department of Labor and other federal agencies have access to information submitted by claimants to the Oregon Division of Employment. 42 U.S.C. Sec. 503(a)(6) requires that state programs "mak[e] ... such reports, in such form and containing such information, as the Secretary of Labor may from time to time require." Paragraph (7) requires specifically that states
mak[e] available upon request to any agency of the United States charged with the administration of public works or assistance through public employment, the name, address, ordinary occupation and employment status of each recipient of unemployment compensation, and a statement of such recipient's rights to further compensation. 42 U.S.C. Sec. 503(a)(7)
42 U.S.C. Sec. 1101, furthermore, provides that Congressional appropriations to fund the administration by a state of unemployment compensation funds shall be based on the number of claimants in the state, as well as other relevant factors.
Because of the authority of the Department of Labor and other federal agencies to request information regarding the number, identity, and status of claimants to state programs, we hold that the appellants' false statements were within the jurisdiction of a federal department or agency.
In addition to the requirement of jurisdiction, a statement within Sec. 1001 must be material to a federal agency or department. United States v. Vaughn, 797 F.2d 1485 (9th Cir.1986). We assess materiality by an objective and liberal standard. The test of materiality is:
the intrinsic capabilities of the false statement itself, rather than the possibility of the actual attainment of its end as measured by collateral circumstances.
United States v. Valdez, 594 F.2d 725, 729 (9th Cir.1979).
A federal agency need not rely on the information in fact for it to be material. Vaughn, 797 F.2d at 1490; 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); Valdez, 594 F.2d at 728. The statement need have only the propensity or capacity to influence or affect an agency's decision. United States v. DeRosa, 783 F.2d 1401, 1408 (9th Cir.1986); Vaughn, 797 F.2d at 1490. Materiality, therefore, is not measured by effect or magnitude.
The statements of Ms. Facchini and the other appellants were material to the Department of Labor and to other federal agencies with access to information about claimants. The Secretary of Labor, the President, and Congress rely on accurate information from the states in allocating federal money for state administrative expenses. 42 U.S.C. Sec. 1101. As 42 U.S.C. Sec. 503(a)(7) reflects, federal public works and employment agencies use information on state program claimants in planning work projects. The false statements to the Oregon Division of Employment, therefore, are "intrinsically capable" of influencing or affecting federal agencies or departments.
We affirm the judgments of conviction of all appellants.
I believe the facts of this case fulfill neither section 1001's jurisdiction requirement nor its materiality requirement. Moreover, I believe it is evident that Congress never intended that section 1001 should apply to individuals applying for state unemployment benefits.
Section 1001 states in full:
Whoever, in any matter within the jurisdiction of any department or...
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