The opinion of the court was delivered by: KRAFT
Before us are the defendant's posttrial motions in arrest of judgment, for judgment of acquittal and for new trial, following a determination of his guilt by the court, jury trial having been waived.
Defendant was tried and found guilty only upon the sixth count of an indictment which charged that, in violation of 18 U.S.C.A. § 1001,
he 'willfully and knowingly' caused a lending institution (hereinafter called 'Liberty) to submit to the Veterans' Administration (V.A.) in a matter within its jurisdiction an application for Home Loan Guarantee or Insurance (hereinafter called 'insurance application') containing false, fictitious and fraudulent statements of the applicant veteran's employment and earnings.
Motion In Arrest of Judgment
The defendant challenges this count of the indictment upon the ground that it should have been drawn under 38 U.S.C.A. § 715,
a later and, purportedly, a more specific statute, which defendant urges was intended by Congress to proscribe the acts done by him. However, defendant ignores an important distinction between the crimes defined by the two statutes. Section 715 makes criminal certain acts which are done knowingly, but not willfully. Section 1001, on the other hand, penalizes acts which are willfully and knowingly done. The actor's state of mind is an element in the crime upon which Congress could and, we think, did base a distinction.
The government elected to proceed under 1001 and assumed the greater burden of proving the willfulness of the defendant's conduct. The government was not obliged to proceed under the more specific provisions of § 715, where the defendant's acts were willful.
Motion for Judgment of Acquittal
In support of this motion, the defendant insists that § 1001 requires the false statements to be 'material' and argues that the admittedly false statements in this insurance application were not 'material' because they were incapable, practically, of affecting or influencing a governmental function.
Whether the element of materiality is required by the second clause of 1001 is a question upon which there is sharp conflict of opinion.
We deem it unnecessary to decide that question in this case because we believe that materiality was established.
The difficulty arises in the construction of the accepted test of materiality: whether the 'false statement has a natural tendency to influence, or was capable of influencing, the decision of the tribunal in making a determination required to be made';
or, was the statement one that 'could effect or influence the exercise of a governmental function.'
Defendant urges that no false statement 'could effect or influence' or be 'capable of influencing' if, because of extrinsic circumstances, the ultimate objective of favorable agency action was impossible of attainment. We disagree because we believe that the conduct Congress intended to prevent by 1001 was the willful submission to federal agencies of false statements calculated to induce agency reliance or action, irrespective of whether actual favorable agency action was, for other reasons, impossible. We think the test 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. Freidus v. United States, 1955, 96 U.S. App.D.C. 133, 223 F.2d 598, cited by the defendant, supports this conclusion.
In that case a somewhat similar situation existed. A financial statement, which was the basis of the prosecution, was never actually considered by the agency to which it was submitted because it was regarded as not sufficiently current. There was no actual possibility that the agency would be influenced by or induced to act upon the alleged false statements therein.
The court, nevertheless, considered whether the alleged false statements were, in and of themselves, capable of influencing a governmental function and decided, for other reasons, that they were not.
In the present case, having rejected the veteran's insurance application for another reason, the V.A. did not consider and, so, could not have been deceived by defendant's false statements; but those false statements were, in themselves, capable of influencing the agency's decision. The decision which the V.A. would have been required to make was whether or not it would assume the risk of insuring a loan made by Liberty to the veteran applicant. Whether it would assume such risk would depend, to a substantial degree, upon the veteran's ability to repay the loan to Liberty. The false statements submitted by the defendant to Liberty, and in turn, submitted by Liberty to the V.A., that the veteran was gainfully employed and had a 'take-home pay' of $ 75 weekly would have a natural tendency to influence the VA. to believe that the veteran was an acceptable risk. On this basis we conclude that the false statements were material.
As an alternative ground for this motion the defendant argues that the evidence failed to show that he caused the lending institution to submit the insurance application to the VA., as charged, and that it was the veteran who did so. ...