United States v. Stark, Crim. A. No. 22813

• Decision Date: 18 April 1955
• Docket Number: 22814.,Crim. A. No. 22813
• Citation: 131 F. Supp. 190
• Parties: UNITED STATES of America v. Albert STARK. UNITED STATES of America v. Harry BART.
• Court: U.S. District Court — District of Maryland

131 F. Supp. 190

UNITED STATES of America v. Albert STARK.

UNITED STATES of America v. Harry BART.

Crim. A. Nos. 22813, 22814.

United States District Court D. Maryland, Criminal Division.

April 18, 1955.

George Cochran Doub, U. S. Atty., Herbert F. Murray, Asst. U. S. Atty., Baltimore, Md., for plaintiffs.

William D. Macmillan, Semmes, Bowen & Semmes, Paul Berman, Baltimore, Md., for defendants.

CHESNUT, District Judge.

The questions now before the court require the construction of title 18, § 1001, United States Code, with respect to its application to the factual situation arising in these cases, which are substantially identical in subject matter. For brevity it will be sufficient to refer to No. 22813, as the procedure involved in the questions raised are identical with case No. 22814.

On November 24, 1953 Albert Stark was indicted for alleged violation of section 1001 of title 18 U.S.C. The indictment in two counts in substance alleged that Albert Stark and Harry Bart were on and previously to December 6, 1952, engaged jointly in the construction of projects financed by mortgages insured by the Federal Housing Administration, and subject to continuing FHA inspection during the period of construction, in compliance with FHA approved plans and specifications; that Lindian J. Swaim and E. Lawrence Hyland were Special Agents of the Federal Bureau of Investigation lawfully detailed by the FBI to investigate irregularities and misconduct of officers and employees of the United States employed in the Baltimore insuring office of the FHA, and were lawfully detailed to investigate frauds on and attempts to defraud the Government in the functioning of the Maryland office of the FHA, all matters within the jurisdiction of the FBI, an agency of the United States; that the defendant took an oath before said Agents and thereafter knowingly and willfully made false statements material to the investigation, to wit, that he had never made any payment of money or given anything of value to any employee or official of the FHA for any reason whatsoever (with immaterial exceptions); and further that he had no knowledge of any one else making payments or giving things of value to FHA employees or officials, for which there had been no reimbursement, whereas in fact said statements were false and fictitious and were then known by the defendant to be false and fictitious; and that said defendant further stated that he had no knowledge of the payment of $500 to one Harry House, an FHA Inspector, nor any knowledge of a return of said amount by mail by the said Harry House of the sum of $500 to Harry Bart or to the defendant, whereas in fact said statements were false and fictitious as then known to the defendant.

Section 1001 reads as follows:

"Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined not more than $10,000 or imprisoned not more than five years, or both." (Italics supplied.)

There have been the following prior proceedings in this case. The indictment was filed November 24, 1953. On February 5, 1954, after hearing argument of counsel, defendants' motion to dismiss the indictment was overruled. On November 10, 1954 defendants filed another motion to dismiss the indictment, with numerous exhibits, to which there was an answer by the United States. This second motion to dismiss was based on alleged prejudice to the defendant by reason of newspaper publicity which had locally been given to proceedings at a Congressional inquiry upon the subject of federal housing at which the defendant had been summoned to appear and testify as a witness. After extended hearing of counsel the court rendered an oral opinion on December 6, 1954, overruling this second motion to dismiss the indictment; but on the condition that the trial should be postponed for a period of several months. Shortly thereafter counsel for the parties entered into a stipulation that there should be a preliminary trial by the court of certain special issues in advance of the trial of the general issue. The defendant waived a jury trial upon such special issues and agreed that the trial thereof should be by the court without a jury. It was agreed that at the preliminary trial the court should decide the issue of the applicability of title 18, § 1001, to the circumstances of the alleged false statements charged against the defendant and should make special findings upon the following questions.

a. Is the Federal Bureau of Investigation a "department or agency" within the meaning of title 18 U.S.C. § 1001, which forbids making false statements material "in any matter within the jurisdiction of any department or agency of the United States".

b. Is the Department of Justice a "department or agency" within the meaning of title 18 U.S.C. § 1001, which forbids making false statements material "in any matter within the jurisdiction of any department or agency of the United States".

c. Was there a "matter", as that term is used in title 18 U.S.C. § 1001, in which the alleged false statements were made.

d. If there was "such a matter", was it within the jurisdiction of the Federal Bureau of Investigation at the time the alleged statements were made.

e. Were the alleged statements of the defendants material to the matter.

f. Were the alleged statements made in the matter allegedly within the jurisdiction of the Federal Bureau of Investigation.

g. Were the Special Agents of the Federal Bureau of Investigation, to whom each defendant is alleged to have made said false statements, lawfully detailed to make the investigation set forth in the indictment.

The stipulation further provided that upon the trial of the general issue the special issues preliminarily decided should not be submitted for re-determination by the jury and that the jury trial should be limited to the issues of (a) whether or not the statements charged in the indictment were actually made by the defendant, and (b) if so, whether they are true or false and (c) any other issues of fact that may arise in the trial of the case except those determined by the court on the preliminary trial; and at the trial of the general issue the court should instruct the jury in accordance with its special findings upon the preliminary trial of the special issues without, however, any waiver of the right of the United States or the respective defendants to except to the correctness of such instructions and to appeal therefrom; and that at the jury trial either party may introduce in evidence a transcript of the testimony taken at the preliminary trial of the special issues; and that the stipulation was without prejudice to the rights of the parties to challenge on appeal the action of the court on the questions decided by it without a jury.

Pursuant to the stipulation some oral testimony has been taken and some documentary exhibits filed. From the oral testimony I find that shortly before December 6, 1952 the Baltimore office of the FBI received confidential information to the effect that one or more officials of the Baltimore office of the FHA had been bribed, or an attempt had been made to bribe them, in the performance of their duties in the proper administration of the Baltimore office of the FHA in particular relation to the supervision of inspection of building projects being constructed by Stark & Bart, and insured or to be insured by the FHA. In consequence of this information the manager of the Baltimore office of the FBI instructed Special Agents Swaim and Hyland to investigate the matter and they, on December 6, 1952, went to the business office of Bart & Stark and interviewed them separately and respectively upon the subject to their knowledge of such bribery or attempted bribery. The Agents informed the defendants of their constitutional rights with respect to answering questions or refusing to do so, and that any answers given by them might possibly thereafter be used against them in a criminal proceeding. The defendants willingly agreed to answer questions to be put to them by the Agents and each respectively and separately took an oath to answer the questions truthfully. Thereupon the defendants gave the answers and made the statements alleged in the indictments, according to the testimony of the Agents. The defendants were not asked to and did not sign any written statement. It appears that they did not volunteer or take the initiative in giving information but only answered questions put to them.

Thereafter on April 7, 1953 Harry Bart, Albert Stark, J. Hamilton Walker and Raymond M. Miskimon were indicted by the Grand Jury for the Maryland District on six counts. In the first count Bart & Stark were charged with bribery of a named official of the Baltimore FHA office; in the second and third counts Bart, and in the fourth count Stark, were charged with committing perjury. After hearing counsel the court dismissed the indictment on the ground of misjoinder of offenses and defendants. The present indictments were filed on November 24, 1953.

I further find from the oral testimony that after receiving the confidential information above referred to, the Baltimore office of the FBI opened a special file for the investigation of the particular matter entitled "Bribery and Fraud on the Government". A written report was promptly submitted to the central office of the FBI in the Department of Justice in Washington; and the investigation of the subject matter continued to be made by the Baltimore office for some time thereafter, with current reports to Washington upon the subject and without objection from the Washington office to...