We found that the V.A. rejected the insurance application because the amount requested to be insured exceeded the veteran's remaining entitlement. The defendant contends that the excessiveness of the application precluded its approval by the V.A.; that, accordingly, the exercise by the V.A. of a governmental function could not have been influenced or affected by the false statements and that the false statements were, therefore, not material.
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. We were persuaded beyond a reasonable doubt to the contrary.
The evidence showed that the defendant telephoned the application for the mortgage loan to Liberty; that he was aware that Liberty would not accept the application unless the veteran was employed; that he instructed the veteran to make the false statements of his employment and earnings at the forthcoming interview with Liberty's loan office and wrote the pertinent information on a match cover to insure against failure of the veteran's memory; that the veteran carried out the defendant's instructions; that the loan officer sent a verification of employment form to the purported employer; tat the defendant filled in this employment form with information admittedly false and forged thereto the signature of the spurious employer; that the defendant gave it to the lending institution; that in reliance upon the veteran's statements and upon the verification of employment so received, the loan officer directed the formal application for Home Loan Guarantee or Insurance to be filled in and mailed to the V.A. together with the executed verification of employment form. This evidence was ample to support the court's conclusion that Liberty forwarded the insurance application to the V.A. on the strength of the veteran's false statements of employment and earnings, made under the defendant's instructions and supported by the defendant's false verification of employment.
Motion for New Trial
We think the reasons assigned in support of this motion are without merit.
Now, October 29, 1958, it is ordered that defendant's motions in arrest of judgment, for judgment of acquittal and for new trial are denied. The defendant is ordered to appear for sentence on November 10, 1958, at 10:00 A.M.