Opinion ID: 702361
Heading Depth: 2
Heading Rank: 2

Heading: Violation of 18 U.S.C. Sec. 1014--Count I

Text: 33 The appellants argue that Count I does not allege a violation of 18 U.S.C. Sec. 1014 and that the court erred in not granting their motions for judgment of acquittal, arrest of judgment, and new trial. Since we are remanding for a new trial because of Gaudin, we need only address the judgment of acquittal and arrest of judgment issues. 34 Count I alleges a conspiracy to make false statements to financial institutions by agreement to avoid telling the banks about Copytech's financial responsibility to service the copiers under the CMP contracts. The appellants claim that withholding information cannot support a conviction under Sec. 1014, only affirmative assertions of facts can. We disagree. 35 Other courts have broadly interpreted Sec. 1014 to cover various types of acts and misrepresentations as statements. See, e.g., United States v. Haddock, 956 F.2d 1534 (10th Cir.1992) (evidence that defendant failed to disclose line of credit sufficient to convict under Sec. 1014); United States v. Trexler, 474 F.2d 369, 370-71 (5th Cir.) (in a Sec. 1014 prosecution, the jury could consider what a defendant does or fails to do, it is not limited to affirmative acts); United States v. Sackett, 598 F.2d 739, 740-42 (2d Cir.1979) (in Sec. 1014 prosecution, there was sufficient evidence for the jury to convict for omitting information orally on loan application); United States v. Trice, 823 F.2d 80 (5th Cir.1987) (failure to disclose material information needed to avoid deception in connection with loan transactions covered by Sec. 1014 constitutes a false statement or report within the meaning of the statute and thus violates the statute); United States v. Ryan, 828 F.2d 1010, 1017 (3d Cir.1987) (fact that a word was not spoken or written does not necessarily mean that a message was not sent and received; under Sec. 1014 a statement included assertive nonverbal conduct); United States v. Concemi, 957 F.2d 942, 950-51 (1st Cir.1992) (HUD-1 certificates which omit information about second mortgage constitute statement for Sec. 1014 purposes). 36 Likewise, in construing a similar statute, we have recognized that an omission in a Sec. 1005 prosecution can constitute a false entry where an honest entry would otherwise be made. See United States v. Copple, 827 F.2d 1182, 1187 (8th Cir.1987). The defendant in Copple was prosecuted under 18 U.S.C. Sec. 1005 for making false entries in a bank book, report or statement. The defendant argued that the evidence was not sufficient to support a Sec. 1005 charge because there could not have been a false entry made where the false documents were withheld, rather than entered. We held, citing United States v. Dougherty, 763 F.2d 970, 973 (8th Cir.1985), that an omission could constitute a false entry, where an honest entry would otherwise be made. 37 In this case, Count I charges that the appellants conspired to violate Sec. 1014 by knowingly omitting material information for the purpose of influencing federally insured financial institutions. As in Copple, such omissions may constitute a false statement where honest statements would otherwise be made. The literal truth of information that is actually submitted does not shield the intentional omission of material information from prosecution under Sec. 1014. The allegations contained in Count I of the indictment are sufficient to allege a violation of 18 U.S.C. Sec. 1014.