U.S. v. Irwin

• Decision Date: 17 August 1981
• Docket Number: No. 78-1904,78-1904
• Citation: 654 F.2d 671
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. James A. IRWIN, Jr., Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 671

654 F.2d 671

UNITED STATES of America, Plaintiff-Appellee, v. James A. IRWIN, Jr., Defendant-Appellant.

No. 78-1904.

United States Court of Appeals,

Tenth Circuit.

Argued Sept. 12, 1979.

Decided April 2, 1981.

Rehearing and Rehearing En Banc Denied Aug. 17, 1981.

William Rapson, Denver, Colo. (Robinson, Waters & O'Dorisio, P. C. Denver, Colo., were on the brief), for defendant-appellant.

Kathryn H. Richman, Asst. U. S. Atty., Denver, Colo. (Joseph Dolan, U. S. Atty., Denver, Colo., was on the brief), for plaintiff-appellee.

Before HOLLOWAY and DOYLE, Circuit Judges, and BOHANON, District Judge. ^*

HOLLOWAY, Circuit Judge.

This is a direct appeal by the defendant-appellant James A. Irwin, Jr., from his conviction and sentence ¹ on each count of an eight-count indictment charging him with conspiracy (Count 1) in violation of 18 U.S.C. § 371, the general conspiracy statute, with making a false statement to a United States agency (Count 2) in violation of 18 U.S.C. §§ 1001 ² and 2, with concealing or covering up material facts (Counts 3, 5, and 7) in violation of 18 U.S.C. §§ 1001 and 2, and with filing false claims with an agency of the United States (Counts 4, 6, and 8) in violation of 18 U.S.C. §§ 287 and 2. ³

Defendant says that the essence of his appeal is that the Government failed to prove "materiality" it failed to show how his acts might have affected in any significant way the decisions of the Government agency involved, the Economic Development Administration (EDA). Defendant argues that the trial court erred: (1) in denying a motion for judgment of acquittal, the evidence being insufficient to support the charges; (2) in submitting the issue of materiality to the jury; (3) in instructing the jury improperly on the issue of materiality; (4) in admitting evidence concerning the eligibility for reimbursement of certain expenses under a federal grant; (5) in failing to instruct the jury on the element of trick, scheme, or device for the nondisclosure counts under § 1001; and (6) in failing to dismiss the false claim counts under § 287 due to the Government's failure to set forth in the indictment the essential elements of materiality and specific intent.

We set aside the convictions on Counts 1, 3, 5, and 7 and affirm the convictions on Counts 2, 4, 6 and 8 for reasons that follow.

I

The factual background

Viewing all the evidence, together with all reasonable inferences therefrom in the light most favorable to the Government, as we must on this appeal from a guilty verdict, United States v. Twilligear, 460 F.2d 79, 80-81 (10th Cir.), the evidence tended to show the following facts.

In 1974 the city of Delta, Colorado, became interested in the development of an industrial park, a project which was being promoted by a local business group called the Delta County Development Co. In February 1974 the Delta city council hired Management Services Company (MSC), a trade name used by defendant, to provide assistance in obtaining federal and state funds to finance the project. ⁴ Defendant's compensation under this contract was to be based, in part, on a percentage of any Government grant or loan obtained for the city through his efforts.

After being informed by a United States Congressman that the percentage method of compensating defendant for his work was illegal, the city council entered into a second contract with defendant in June 1974. Under it, Delta was obligated to pay the defendant $150 per day for his efforts in attempting to secure federal or state funds for various projects in which Delta became involved. In addition, defendant was to be reimbursed for all reasonable costs related to the preparation of grant and loan applications and for all related travel and entertainment expenses.

Although defendant began to work for Delta under the first contract in February 1974 he apparently did not bill the city for his services and expenses until September 4, 1974. Between September 4, 1974 and April 1, 1975, Irwin submitted to Delta three separate bills which purportedly represented the services rendered and the expenses incurred under the two contracts between April 10, 1974, and March 28, 1975. These bills, which totaled approximately $21,000, were paid by Delta out of its own funds.

On October 18, 1974, defendant submitted on behalf of Delta a federal grant application to the Economic Development Administration (EDA) to secure funding for the city's industrial park project, Irwin admitted at trial that he prepared the EDA grant application with some minor help from other individuals and that he was responsible for reviewing the application for its accuracy and completeness. The evidence further indicates that when EDA officials who reviewed the application found it to be incomplete or unclear, it was defendant's responsibility to rectify the problems.

After several meetings with EDA officials in which defendant provided further documentation and clarification of the information contained in the application, EDA finally approved it and made an "offer of grant" on March 19, 1975 which the city of Delta accepted on March 28, 1975. Count 2 of the indictment concerns one page of the grant application which was approved and accepted by EDA.

In August 1974, a few months prior to the time that defendant submitted the grant application to EDA, he met with Robert J. Adams, an unindicted coconspirator, to discuss the engineering needs for Delta's industrial park project. Although Adams and his company, A&S Consultants (A&S), had performed engineering work for the city of Delta since 1967, he did not at the time of his meeting with Irwin have a contract with Delta to be the project engineer for the industrial park project.

During this meeting Adams orally agreed that if he became project engineer for Delta's industrial park project, he would pay Irwin for services primarily related to the preparation of the EDA grant application. Sometime subsequent to this initial meeting Adams became project engineer and agreed to pay Irwin $18,000 for the work he did pursuant to their oral agreement. At the time Irwin told Adams that any payments to Irwin would be eligible costs under the EDA grant.

After EDA had made its grant offer in March 1975, it was quite apparent that some of the services for which Irwin expected In May 1975, subsequent to EDA's approval of Delta's grant application, Irwin was appointed by the Delta city council to a salaried position as city manager. In this position Irwin became a central figure in the disbursement of funds for the industrial park project which was being financed in part by the EDA grant.

payment from Adams were declared by EDA to be ineligible for payment with grant funds. Adams and Irwin still agreed, however, that Irwin would be paid $18,000 for his services despite the fact that some of those services were known to be ineligible for payment with grant funds. Adams testified that it was their intention that any payment to Irwin would be derived from the grant funds.

As city manager, Irwin was the city's receiving agent for bills and invoices that were submitted for work done on capital projects such as the industrial park. Although the city council had final authority to authorize payment on a bill, Irwin was responsible for the initial screening and review of the incoming bills. By his own testimony, Irwin had the authority to authorize payment on bills prior to the final approval by the city council.

Once the federal grant money became available for disbursement to Delta, Irwin and Adams would send to EDA a monthly itemized list of costs incurred by Delta on the industrial park project which were to be reimbursed under the EDA grant. Each monthly statement to EDA also contained a compilation of the bills received that month and the payments made by Delta. Each bill would be stamped "approved" and would bear the date and initials of both Irwin and Adams.

Between August 1975 and October 1975 Adams submitted to Irwin as Delta's city manager three separate bills on A&S stationery for professional services rendered on Delta's industrial park project. Each A&S bill contained a charge for services allegedly performed by Irwin, although there was no indication of this fact on the bill. These bills were approved by Irwin as city manager and were paid by Delta. In at least one instance, Irwin authorized payment to A&S prior to the final approval of the city council. After each A&S bill was paid by Delta, it was then submitted in a monthly statement to EDA by Irwin and Adams for approval and reimbursement under the grant. These three bills became the basis for Counts 3-8.

Shortly after each payment to A&S by Delta, Adams would give Irwin a check for an amount which corresponded to a particular item on the bill paid by Delta. Defendant ultimately received approximately $18,000 from Adams. Further evidence will be detailed as necessary in discussing Irwin's appellate contentions, to which we now turn.

II

The Count 2 false statement charge

Count 2 charges that defendant violated 18 U.S.C. §§ 1001 and 2 by willfully and knowingly making or causing to be made a false statement as to material facts in the EDA grant application which he prepared and submitted on behalf of Delta. ⁵ The indictment specifically alleges that Irwin stated and represented in the EDA grant application that his company, MSC, had "received no compensation for services performed in connection with the application," when in fact he knew that MSC "had received compensation from the City of Delta for these services and expected to receive additional compensation from the City of Delta for these services." (I R.3-4.) Defendant contends that the evidence failed to show that a false statement was made or that it was material.

The essential elements which the Government must prove in a false statement prosecution under § 1001 are that (1) the defendant made a statement; (2) the statement was...