United States v. Grainger United States v. Clavere 636

• Decision Date: 15 June 1953
• Docket Number: Nos. 634,s. 634
• Citation: 97 L.Ed. 1575,346 U.S. 235,73 S.Ct. 1069
• Parties: UNITED STATES v. GRAINGER. UNITED STATES v. CLAVERE et al. (two cases). to 636
• Court: U.S. Supreme Court

346 U.S. 235

73 S.Ct. 1069

97 L.Ed. 1575

UNITED STATES

v GRAINGER.

UNITED STATES

v. CLAVERE et al. (two cases).

Nos. 634 to 636.

Argued May 4 and 5, 1953.

Decided June 15, 1953.

Mr. John F. Davis, Washington, D.C., for appellant.

Mr. Jack J. Miller, Stockton, Cal., for appellee Grainger.

Mr. John V. Lewis, San Francisco, Cal., for appellees Clavere et al.

Mr. Justice BURTON delivered the opinion of the Court.

These cases were argued immediately following No. 548, Bridges v. United States, 73 S.Ct. 1055. They concern the Wartime Suspension of Limitations Act which we found inapplicable to the offenses stated in the Bridges indictment. These cases, however, involve different offenses and we hold the Suspension Act applicable to the instant indictments for offenses committed in 1945 and 1946 and we hold that the United States may thus prosecute them in 1952.¹

The principal questions here are: (1) whether the Wartime Suspension of Limitations Act² suspended the running of the general three-year statute of limitations³ as to violations of the false claims clause of the False Claims Act,⁴ and (2) if so, whether the indictments for such offenses, found in 1952, were timely. For the reasons hereafter stated, our answer to each question is in the affirmative.

These indictments were filed in 1952 in the United States District Court for the Northern District of California. The indictment in No. 634 charges appellee Grainger, in 16 counts, with having 'unlawfully, know- ingly, wilfully and fraudulently' presented for payment to the Commodity Credit Corporation, at various times in 1945, claims upon that corporation certifying that appellee had made certain purchases of wool at certain prices, knowing such claims 'to be false, fictitious and fraudulent * * *.' It charges, further, that appellee knowingly and falsely certified to the Commodity Credit Corporation that he had paid higher prices for the wool than he actually did.⁵

The indictment in No. 635 charges appellees Clavere and Kennedy, in 15 counts, with like offenses committed in 1946, including several claims based upon their false certifications of purchases of wool when they knew that they had made no such purchases.

The indictment in No. 636 charges appellees Clavere and Kennedy, in one count, with conspiring to make false, fictitious and fraudulent claims upon the Commodity Credit Corporation⁶ by making somewhat comparable claims in 1946 and 1947. A second count charges appellees Clavere, Kennedy and Shapiro with engaging in a like conspiracy, with overt acts committed in 1946.⁷

Appellees moved to dismiss the indictments on the ground, among others, that each was barred by the applicable statute of limitations. The District Court granted the motions and dismissed the indictments. That court's unreported opinion concludes with the following statement:

'Accordingly, the Court holds that, as to all three indictments, the three-year statute of limitations fixed by 18 USC section 582 and its successor, 18 USC (Supp. V) section (3282), applies. Because the statute that the various defendants are charged with having violated or with having conspired to violate does not 'denominate' the acts proscribed therein as 'frauds,' or does not, in so many words, have as an 'ingredient' a 'defrauding or an attempt to defraud the United States,' neither the Wartime Suspension of Limitations Act of 1942 nor its successor of 1948 can apply.'

The United States appealed directly to this Court, under 18 U.S.C. (Supp. V) § 3731, 18 U.S.C.A. § 3731.⁸

1. The running of the general three-year statute of limitations⁹ was suspended by the Wartime Suspension of Limitations Act¹⁰ as to violations, in 1945 and 1946, of the false claims clause of the Flase Claims Act.¹¹

A. While the offenses charged here are not spelled out in detail, they are sufficiently clear at least to show attempts to obtain payments from the Commodity Credit Corporation in amounts based upon knowingly false certifications to that corporation by the accused that certain purchases of wool had been made by him when he knew that no such purchases had been made by him or, at least, that no such purchases had been made by him at prices as high as those he certified that he paid. The offenses charged are, therefore, of a pecuniary nature and we are not required in these cases to pass upon the contention, discussed in the Bridges case, that, in order for the Suspension Act to apply to them, the offenses not only must involve defrauding the United States or an agency thereof, but they also must be of a pecuniary nature or of a nature concerning property.

B. The offenses with which we concern ourselves here are alleged to have occurred in 1945 or 1946. They, therefore, precede the President's proclamation of December 31, 1946, which declared that the hostilities of World War II terminated on that day.¹² The offenses thus come within the period to which the Syspension Act applies. United States v. Smith, 342 U.S. 225, 72 S.Ct. 260, 96 L.Ed. 252.

C. Fraud upon the United States is an essential ingredient of the offenses charged. The offenses charged in Cases No. 634 and No. 635 are violations of the false claims clause, as distinguished from the false statement clause, of the False Claims Act. Such false claims clause provides that—

'Whoever shall * * * present * * * for payment or approval, to * * * any corporation in which the United States of America is a stockholder, any claim upon or against the Government of the United States * * * or any corporation in which the United States of America is a stockholder, knowing such claim to be false, fictitious, or fraudulent * * * shall be fined not more than $10,000 or imprisoned not more than ten years, or both.' 52 Stat. 197, 18 U.S.C. § 80, now 18 U.S.C. (Supp. V) § 287, 18 U.S.C.A. § 287.

The indictments show that it is the false claims clause that is involved. And, what is more important to the issue here, the offense defined by that clause is the kind of offense at which the Syspension Act is directed.

The Suspension Act provides that—

'When the United States is at war the running of any statute of limitations applicable to any offense (1) involving fraud or attempted fraud against the United States or any agency thereof in any manner, whether by conspiracy or not * * * shall be suspended until three years after the termination of hostilities as proclaimed by the President or by a concurrent resolution of Congress.' 18 U.S.C. (Supp. V) § 3287, 18 U.S.C.A. § 3287.

In determining the kind of offenses to which that section applies, we have the benefit of the conclusion heretofore reached by this Court that such offenses are limited to those which include fraud as an essential ingredient.¹³ The next question is what constitutes the required fraud. Our problem is simpler than in the Bridges case and in those cases which involve violations of the false statement clause of the False Claims Act. In those cases there is a question whether the mere making of a false statement in the connection specified necessarily includes the ingredient of fraud required by the Suspension Act. In the instant cases that question is not involved because the offenses include more than that. The substantive offenses here charged include the making of claims upon the Government for payments induced by knowingly false repre- sentations—constituting violations of the false claims clause of the False Claims Act. The statement of the offenses here carries with it the charge of inducing or attempting to induce the payment of a claim for money or property involving the element of deceit that is the earmark of fraud.¹⁴ The false statement clause contains no such ingredient. The difference between the clauses is emphasized in the 1948 codification which has placed the former in § 287 and the latter in § 1001 of 18 U.S.C.(Supp. V), 18 U.S.C.A. §§ 287, 1001.

We conclude that the Wartime Suspension of Limitations Act has added time within which to prosecute the wartime frauds involved in violations of the false claims clause of the False Claims Act.

Appellees have placed emphasis also upon the following statement by Mr. Justice Roberts, speaking for the Court, in United States v. Scharton, 285 U.S. 518, 521—522, 52 S.Ct. 416, 417, 76 L.Ed. 917.

'Moreover, the concluding clause of the section, though denominated a proviso, is an excepting clause, and therefore to be narrowly construed. United States v. McElvain, 272 U.S. 633, 639, 47 S.Ct. 219 (220) 71 L.Ed. 451. And, as the section has to do with statutory crimes, it is to be liberally interpreted in favor of repose, and ought not to be extended by construction to embrace so-called frauds not so denominated by the statutes creating offenses.'

Appellees argue that this language limits the Suspension Act not merely to those offenses in which fraud upon the United States is an essential ingredient, but to such of those offenses as Congress has 'denominated' as 'frauds' by using that very word or, at least, one of its derivatives.

We believe that Congress sought by its phrase 'involving fraud * * * in any manner'¹⁵ to make the Suspension Act applicable to all offenses which are fairly identifiable as those in which fraud is an essential ingredient, by whatever words they be defined, and that Congress did not seek to limit its applicability to such of those identifiable offenses as also are labeled with a particular symbol. In the false claims clause of the False Claims Act, Congress met the requirement by identifying the offense as that of making 'any claim upon * * * the United States * * * knowing such claim to be false, fictitious, or fraudulent * * *.'¹⁶ The combination of either falsity, fiction or fraud with the claim is enough. The same reasoning applies to a conspiracy to make false claims, as alleged in No. 636.

2. The Wartime Suspension of Limitations Act extended the time for finding the indictments through 1952.

A. The ...