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UNITED STATES v. MARTORANO

September 4, 1984

UNITED STATES OF AMERICA
v.
JOHN MARTORANO



The opinion of the court was delivered by: BRODERICK

 BRODERICK, J.

 
Whoever, in any document required by title I of the Employee Retirement Income Security Act of 1974 . . . to be published, or kept as part of the records of any employee welfare benefit plan . . . or certified to the administrator of any such plan, makes any false statement or representation of fact, knowing it to be false, or knowingly conceals, covers up, or fails to disclose any fact the disclosure of which is required by such title or is necessary to verify, explain, clarify or check for accuracy and completeness any report required by such title to be published or any information required by such title to be certified [shall be guilty of a crime].

 Count Three of the Indictment alleged that the defendant knowingly made false statements and concealments of fact in a "utilization report" dated April 9, 1981, which the defendant signed and submitted to the Teamsters Local 837 Health and Welfare Fund.

 The defendant has moved for a judgment of acquittal pursuant to Rule 29 of the Federal Rules of Criminal Procedure, or, in the alternative, for a new trial pursuant to Rule 33, on the ground that the evidence produced at trial was insufficient to support a guilty verdict. At oral argument, the defendant also contended, as he had unsuccessfully in his pre-trial motions, that § 1027 does not as a matter of law apply to him or to the conduct with which he is charged. For the reasons which follow, the defendant's motion for a judgment of acquittal, or in the alternative for a new trial, will be denied.

 On a motion for judgment of acquittal, the Court is "required to view the evidence in the light most favorable to the prosecution and to draw all reasonable inferences therefrom in the prosecution's favor." United States v. Ashfield, 735 F.2d 101, 106 (3d Cir. 1984), citing Glasser v. United States, 315 U.S. 60, 80, 62 S. Ct. 457, 469, 86 L. Ed. 680 (1942). Viewing the evidence in this light, the trial court is obliged to uphold the verdict unless no rational jury could conclude beyond a reasonable doubt that the government has proved all the elements of the offense charged. Id; see also Burks v. United States, 437 U.S. 1, 16-17, 98 S. Ct. 2141, 2149-2150, 57 L. Ed. 2d 1 (1978); United States v. Doan, 710 F.2d 124, 126-27 (3d Cir. 1983). On the other hand, a motion for a new trial on the ground that the verdict is against the weight of the evidence is directed to the sound discretion of the trial court, which may weigh the evidence but may set aside a verdict and grant a new trial only if it determines that the verdict constitutes a miscarriage of justice. United States v. Phifer, 400 F. Supp. 719, 723 (E.D. Pa. 1975), aff'd 532 F.2d 748 (3d Cir. 1976). The Court must also grant a new trial if there is a reasonable probability that trial error could have had a substantial influence on the jury's decision. See Government of Virgin Islands v. Bedford, 671 F.2d 758, 762 (3d Cir. 1982); United States v. Mastro, 570 F. Supp. 1388, 1390 (E.D. Pa. 1983). In the present case, the evidence was amply sufficient to support the jury's verdict under both the Rule 29 standard and the Rule 33 standard, and the defendant's legal arguments are without merit.

 Sufficiency of the Evidence

 The defendant contends that the evidence produced by the government was insufficient to support a guilty verdict. Four essential elements must be proved beyond a reasonable doubt before a defendant may be found guilty under 18 U.S.C. § 1027: (1) that the defendant made a false statement or representation of fact, or concealed, covered-up, or failed to disclose a fact; (2) that the defendant did so knowingly; (3) that the false statement or representation of fact was made in a document required by Title I of ERISA to be published, or kept as part of the records of any employee welfare benefit plan, or certified to the administrator of any such plan, and any concealment, cover-up, or failure to disclose was of a fact the disclosure of which is required by Title I or is necessary to verify, explain, or check for accuracy and completeness any information required by such title to be published or certified; and (4) that the employee welfare benefit plan in question was an employee welfare benefit plan within the meaning of and subject to Title I of ERISA, 29 U.S.C. §§ 1002 and 1003. See United States v. S & Vee Cartage Co., Inc., 704 F.2d 914 (6th Cir), cert. denied 464 U.S. 935, 104 S. Ct. 343, 78 L. Ed. 2d 310 (1983). It was undisputed in this case that the Local 837 Health & Welfare Fund was an employee welfare benefit plan within the meaning of and subject to Title I of ERISA.

 In April of 1981 the defendant was the sole shareholder, director, and sole officer of Amma Health Center, Inc. (AMMA). AMMA was a medical services provider which provided outpatient medical services to the members of Local 837 pursuant to a contract between AMMA and the Local 837 Health & Welfare Fund (Fund). At the request of the Fund administrator, the defendant submitted a "utilization report" to the Fund dated April 9, 1981 (Ex. G-13). This report, submitted on AMMA's letterhead and signed by the defendant, purported to be a "utilization report for out-patient services" provided by AMMA to Local 837 members for the period October, 1978 through December, 1978, and for the period January, 1979 through December, 1979.

 The April 9, 1981 "utilization report" stated that AMMA's "annual net profit" for the calendar year 1979 was $39,305.21. This figure was calculated by first subtracting an entry labelled "Total dollar value of services rendered" ($162,471) from the total amount of premiums paid by the Fund to AMMA in 1979 ($234,623.50). From this result ($72,152.50) was subtracted an entry labelled "Cost of Administration (14%)" ($32,847.29), to arrive at an "Annual Net Profit" of $39,305.21. The evidence showed, however, that the "total dollar value" figure was not an actual cost figure, and that in fact AMMA's actual expenditures to doctors and clinics for medical services provided to Fund members in 1979 was $30,402.75. (Ex. G-50, Tr. 46-122). The government introduced evidence showing that AMMA's annual net profit for 1979 was actually $86,339. (Tr. 46-131). Clearly, the jury rationally could have concluded that beyond a reasonable doubt the defendant's representation of AMMA's "annual net profit" as $39,305.21 in the April 9, 1981 utilization report was a "false statement or representation of fact" within the meaning of 18 U.S.C. § 1027.

 The second element of the offense requires that the false statement, representation, or concealment of fact be made knowingly. An act of failure to act is done knowingly if done voluntarily and intentionally, and not because of mistake or accident. United States v. S & Vee Cartage Co., 704 F.2d at 919; United States v. Tolkow, 532 F.2d 853, 859 (2nd Cir. 1976). Proof of specific intent is not required to establish a violation of § 1027. United States v. S & Vee Cartage Co., Inc., 704 F.2d at 919; United States v. Tolkow, 532 F.2d at 858. Furthermore, as this Court instructed the jury, the government need not prove that the defendant was aware of any legal duties imposed upon him by ERISA, or that he was aware of the Fund's reporting requirements under ERISA, or that he intended to violate any law. United States v. Tolkow, 532 F.2d at 858.

 In his requested jury instructions, the defendant contended that in order to establish a violation of § 1027 the government must prove that the defendant was aware of any legal duties imposed upon him by ERISA with respect to the submission of information contained in the "utilization reports" which he submitted to the Fund. Such a contention has been expressly rejected, see United States v. Tolkow, 532 F.2d at 858, and this Court properly denied the defendant's requested jury instruction.


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