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United States v. Sytch

decided: August 6, 1958.

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
GREGORY K. SYTCH, ANNA SYTCH, AND LINCOLN GREGORY TRADES SCHOOL, INC., A NEW JERSEY CORPORATION, DEFENDANTS-APPELLANTS.



Author: Mclaughlin

Before MARIS, GOODRICH and McLAUGHLIN, Circuit Judges.

McLAUGHLIN, Circuit Judge.

The government obtained a judgment of $76,957.10 against appellants for over-payment to appellant Lincoln Gregory Trades School, Inc. which had resulted from the filing of a false and fraudulent statement of costs with the Veterans Administration.

Appellant Gregory Sytch was president and appellant Anna Sytch, his wife, vice-president of the appellant school where various methods of welding were taught. The school obtained a contract with the Veterans Administration, covering the period from February 23, 1948 to August 31, 1948, for the teaching of welding to veterans under the G.I. Bill. As that agreement expired another one was entered into, running from September 1, 1948 to August 31, 1949. On September 20, 1949, in accordance with the Veterans Administration requirement, defendants-appellants filed a sworn statement of the actual cost of operating the school during the second contract term. On the basis of those alleged costs the Administration entered into a third contract from September 1, 1949 to August 31, 1950. Because the figures in the statement had been substantially increased in excess of the true costs incurred by the school, the Administration overpaid the school. This suit was to recover double that overpayment plus statutory damages of $2,000 under the False Claims Act, 31 U.S.C.A. ยง 231 et seq. as amended.

Following the filing of this action the defendants-appellants were indicted for making the false and fraudulent statement to the Administration for the purpose of obtaining a contract from the latter. The defendants-appellants pleaded guilty to that indictment and were sentenced.

Those guilty pleas were admitted on opening by defendants' attorney at the trial of the case now before us. The government moved for summary judgment as to liability which the court allowed. The cause proceeded on the question of the amount of damages sustained by the Administration. The jury awarded $48,000 on the claim. Doubled by the court the sum came to $96,000. This plus the $2,000 statutory damages made a total verdict to the government of $98,000. The jury also found that the defendants were entitled to $21,042.90 on their counterclaim. The court deducted that amount from the plaintiff's verdict, leaving $76,957.10, for which judgment was entered in favor of the government.

Appellants urge that the district judge erred in permitting the testimony of Federal Bureau of Investigation Agent Shahan as it related to his calculations.

The government is on sound ground when it suggests, as it should, that this question is not before us since there was no objection from the defense attorneys to the testimony nor any motion to strike it. Our search of the record verifies the absence of effort to prevent the evidence now complained of from going into the record or of any later effort to eliminate it. Unless the testimony prejudicially affected the substantial rights of the appellants, "The assignment will not be considered as constituting reversible error since it lacks the foundation of an objection in the court below." Hickey v. United States, 3 Cir., 1954, 208 F.2d 269, 279, certiorari denied 1954, 347 U.S. 919, 74 S. Ct. 519, 98 L. Ed. 1074.

We do not find that the allowance of the agent's calculations in evidence was plain error. As to the first of these he was not testifying factually or giving an opinion. The particular figure was arrived at by taking the total of the ten checks payable to three named concerns by the school and expressly assuming*fn1 that it represented materials never purchased for the school. The court charged the jury: "I charge you, ladies and gentlemen, that this computation by Agent Shahan is based upon the presumption that the merchandise was not furnished. * * * If you find from the evidence that the merchandise was furnished - you had not - then, of course, you cannot accept the figures as given by Agent Shahan."

The second point in connection with the Shahan evidence has to do with invoices turned over to him by Gregory Sytch. The facts were clearly developed on cross-examination and the credibility of the testimony was for the jury. The reception of the evidence without objection does not call for action by us of our own motion.

Complaint is made of the trial court's ruling which excluded the testimony of William D. Dawson. This witness qualified as an expert in the operation of welding schools. He was asked:

"Q. By reason of your experience in the trade school movement and your experience in maintaining trade schools and in welding, can you say that the proportion of 71 cents per hour for teaching students in a course of acetyline welding is a fair estimate of the cost of materials supplied to the school?"

This was objected to. The defense attorney stated:

"I have other questions to ask along this line. The purpose of my questions are for the purpose of proving by this expert that if these courses were given in accordance with the cost statement it would be necessary to supply the amount of materials as set forth in ...


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