Opinion ID: 526736
Heading Depth: 2
Heading Rank: 2

Heading: The Jurisdictional Requirement

Text: 70 Section 1001 prohibits misrepresentations and affirmative concealments in any matter within the jurisdiction of any department or agency of the United States. Defendants argue that the affirmative acts of concealment proffered by the government--Sacharczyk's actions concerning the French and Perry CTRs--were not matters within the jurisdiction of the IRS. Even if the government's evidence is accepted, defendants contend that the most Sacharczyk has done is conceal facts from a state agency. We do not agree. 71 The Supreme Court has held that the statutory language requiring that knowingly false statements be made 'in any matter within the jurisdiction of any department or agency of the United States' is a jurisdictional requirement. Its primary purpose is to identify the factor that makes the false statement an appropriate subject for federal concern. United States v. Yermian, 468 U.S. 63, 68, 104 S.Ct. 2936, 2939, 82 L.Ed.2d 53 (1984). The Court has also consistently held that the jurisdictional clause of Sec. 1001 should be given a broad interpretation. See United States v. Rogers, 466 U.S. 475, 479-84, 104 S.Ct. 1942, 1946-48, 80 L.Ed.2d 492 (1984); Bryson v. United States, 396 U.S. 64, 71, 90 S.Ct. 355, 359, 24 L.Ed.2d 264 (1969); United States v. Notarantonio, 758 F.2d 777 (1st Cir.1985); see also United States v. Bramblett, 348 U.S. 503, 507, 75 S.Ct. 504, 507, 99 L.Ed. 594 (1955) (There is no indication in either the committee reports or in the congressional debates that the scope of the statute was to be in any way restricted.). 72 In this circuit, as in virtually all others, it has been held that a concealment or misrepresentation need not be made directly to a federal agency or department to sustain a Sec. 1001 conviction. See Notarantonio, 758 F.2d at 787 (collecting cases); United States v. Suggs, 755 F.2d 1538, 1542 (11th Cir.1985) (same); United States v. Richmond, 700 F.2d 1183, 1187-88 (8th Cir.1983) (same). The government, however, must prove a nexus, a necessary link, between the deception of the nonfederal agency and the function of a federal agency. United States v. Petullo, 709 F.2d 1178, 1180 (7th Cir.1983) (quoting United States v. Baker, 626 F.2d 512, 514 n. 5 (5th Cir. (1980)); see Notarantonio, 758 F.2d at 787. The link may be established by showing that the concealments or  'false statements ... result in the perversion of the authorized functions of a federal department or agency.'  Notarantonio, 758 F.2d at 787 (quoting United States v. Stanford, 589 F.2d 285, 297 (7th Cir.1978), cert. denied, 440 U.S. 983, 99 S.Ct. 1794, 60 L.Ed.2d 244 (1979)). 3 73 Defendants' argument that there is no necessary link between Sacharczyk's actions and statements concerning the French and Perry CTRs and the jurisdiction of the IRS is misplaced. All of the cases cited for support by the defendants concern prosecutions under Sec. 1001 for making false representations or statements to a non-federal agency. The question presented was whether the false statements impacted the function of a federal agency. See, e.g., Petullo, 709 F.2d at 1179-80 (false work vouchers submitted to city which used some federal funds to pay for the work); United States v. Baker, 626 F.2d 512 (5th Cir.1980) (false time sheets submitted to city for services provided under federal grant); United States v. Candella, 487 F.2d 1223 (2d Cir.1973) (false statements made to city agency to obtain federal monies), cert. denied, 415 U.S. 977, 94 S.Ct. 1563, 39 L.Ed.2d 872 (1974). 74 The case at bar presents a different scenario. Defendants were prosecuted for knowingly and willfully conceal[ing] and cover[ing] up, by trick, scheme, and device, material facts to the Internal Revenue Service, by failing to file, and causing the failure to file Currency Transaction Reports. The failure to file CTRs clearly falls within the jurisdiction of the IRS. Although not so explicitly stated, defendants' position is that the affirmative acts alleged by the government that form the basis for the trick, scheme, or device element of a Sec. 1001 offense also must have taken place within the jurisdiction of a federal agency. We do not agree. 75 The jurisdictional element of a Sec. 1001 offense is controlled by the substantive falsehoods or acts of concealment charged in the indictment. Whether the prosecution is for making a false statement or for concealing a material fact, the jurisdictional element of Sec. 1001 turns on whether the falsity or coverup would result in the perversion of the authorized functions of a federal agency or department. Notarantonio, 758 F.2d at 787 (quoting Stanford, 589 F.2d at 297). When the prosecution is for a coverup or concealment, however, there is the additional requirement of proving a trick, scheme or device. See Woodward, 469 U.S. at 108, 105 S.Ct. at 612; supra pp. 589, 590. To establish this the government must prove some affirmative act of concealment. See Shannon, 836 F.2d at 1129-30; supra at 589, 590. We do not construe this requirement to mean that every aspect of the scheme, trick or device must be confined within the jurisdiction of a federal agency. It is enough that the underlying concealment fall within that jurisdiction. Here, the failure to file CTRs places this case within the jurisdiction of the IRS. That failure perverts the functions of the IRS. Sacharczyk's actions concerning the French and Perry CTRs are the affirmative acts that must be proven to establish a trick, scheme or device under Sec. 1001. Since the trick, scheme or device is purely derivative of and dependent upon the underlying concealment, we believe the proper jurisdictional focus should be on the concealment. 76 Even if we accepted defendants' argument that the affirmative acts must also be within the jurisdiction of a federal agency, our result would remain unchanged. The government produced evidence that: (1) DiPerna, the state bank examiner, had been directed by the IRS to begin enforcing the rules and regulations concerning CTRs; (2) DiPerna examined St. Michael's in part to ensure their compliance with federal laws regarding CTRs; (3) during the examination, he discovered two reportable transactions for which no CTRs had been filed; (4) he informed Sacharczyk that if they were filed with the IRS he would not mention them in his report; (5) Sacharczyk filled out CTR forms for the two transactions; (6) she showed copies of them to DiPerna and stated that she had filed them with the IRS; (7) DiPerna did not report the credit union's previous failure to file these CTRs; (8) Sacharczyk never, in fact, filed the two CTRs. 77 These actions and representations perverted the functioning of the IRS. For these two reportable transactions, no CTRs were filed. But for the alleged ruse engineered by Sacharczyk, the IRS would have learned of the omissions from DiPerna's report. As DiPerna testified, he was at the credit union to ensure its compliance with the federal laws. The IRS must rely on such local examiners to ferret out violations. By allegedly duping this agent, Sacharczyk successfully avoided IRS discovery of St. Michael's failure to file CTRs. We believe this suffices to place her alleged actions within the jurisdiction of a federal agency even under the defendants' standard. 78 To sum up. There is no jurisdictional bar to the Sec. 1001 count. Although there was sufficient evidence for a conviction, the jury instruction was fatally flawed and the conviction cannot be salvaged by any of the theories advanced by the government. The conviction on this count must, therefore, be vacated. 79