Opinion ID: 214683
Heading Depth: 4
Heading Rank: 1

Heading: Whether Ford's Actions Violated Section 1001

Text: Ford argues that section 1001 does not apply to his actions because the disclosure duties that he breached were owed only to state entities outside of federal jurisdiction. He makes an important distinction between the subject matter of his non-disclosures and the entities to which he owed disclosure duties. Ford all but concedes that the subject matter of his non-disclosureshis financial interests related to TennCarewas federal. Indeed, TennCare is paid for mostly with federal funding and exists only because of a federal waiver from federal Medicaid. However, the disclosures that Ford was supposed to make were owed to state entitiesthe Tennessee Senate and Tennessee Registry of Election Finance. Herein lies the distinction central to Ford's argument. While the facts that he failed to disclose concerned an entity inseparable from federal ties, the entities to which he failed to disclose those facts were anything but federal. Ford's distinction has merit. In Holmes, 111 F.3d at 465, the defendant was charged pursuant to section 1001 for filing false unemployment claims with the Michigan Employment Security Commission. However, this Court held that the false statements did not fall within federal jurisdiction because the federal government neither fund[ed] the fraudulently obtained state benefit payments, nor ha[d] any authority to act upon discovering that the state program ha[d] been defrauded. Id. at 466. The Court also favorably quoted a similar Ninth Circuit case: To establish jurisdiction, the information received must be directly related to an authorized function of the federal agency. Otherwise, the scope of section 1001 jurisdiction would be virtually limitless. Id. (quoting United States v. Facchini, 874 F.2d 638, 642 (9th Cir. 1989) (en banc)) (internal quotation marks omitted). Here, Ford's failures to disclose financial interests were related to functions of the state government of Tennesseethe senate's and election registry's reporting requirements. The senate and election registry likely could have exercised authority in this situation. Cf. Gibson, 881 F.2d at 322. They could have reprimanded Ford or exacted some equitable remedy, but no federal entity had similar authority in this situation. Furthermore, the United States presented no evidence that the senate or election registry operate on federal funds. Ford's distinction is also persuasive in light of this Court's opinion in Gibson. There, Peabody Coal contracted with the Tennessee Valley Authority, a federal agency, to mine coal on the Authority's land. Gibson, 881 F.2d at 320. The defendant contracted with Peabody to sell tires to Peabody's operation on the Authority's land. Id. In connection with the contract, the defendant signed an agreement to file reports with the Authority if requested. Id. The agreement also listed the Authority as Peabody's contractor and detailed the applicability of section 1001 to the defendant. Id. Thereafter, the defendant submitted false invoices to Peabody for which the defendant was convicted pursuant to section 1001. Id. On appeal, this Court affirmed the conviction and held that section 1001 applied. Id. at 322-23. The Authority had jurisdiction, for purposes of § 1001, to investigate and prevent fraud in the performance of its contracts. Id. (quoting Rodgers, 466 U.S. at 479, 104 S.Ct. 1942) (internal quotation marks omitted). In Gibson, the defendant made false statements to Peabody, but he was contractually connected to the federal government because of his contract with Peabody and Peabody's relationship with the Authority. Here, on the other hand, Ford was not contractually connected to the federal government and he only owed reporting duties to the senate and election registry. Those entities are not controlled by the federal government. Ford only breached disclosure duties owed to entities controlled, funded, and administered by the State of Tennessee. There is no controlling authority, from the Supreme Court or otherwise, to support the proposition that a state official is liable under section 1001 for the violation of a state law duty to disclose. Thus, section 1001 does not apply to Ford's non-disclosures. Furthermore, we find additional support for Ford's position in the Rule of Lenity, which instructs us to resolve ambiguit[ies] concerning the ambit of criminal statutes. . . in favor of lenity. Skilling, 130 S.Ct. at 2932 (quoting Cleveland v. United States, 531 U.S. 12, 25, 121 S.Ct. 365, 148 L.Ed.2d 221 (2000)). Pursuant to the language of section 1001(a)(2), the falsehood or non-disclosure must be as to any matter within the jurisdiction of the federal government. The meaning of any matter and jurisdiction requires interpretation of unspecific words at an extremely high level of abstraction. Should a state conflict of interest as to a matter within the state's jurisdiction also come within federal jurisdiction anytime the state government is assisting the federal government as to some objective, whether it be health care, law enforcement, highways, etc.? The statute would cover lies made to federal government agents. But it is completely unclear whether the federal statute covers a failure to disclose to a federal agency a simple conflict of interest by a state public official that results in the state official's receipt of federal funds through multiple state and private intermediaries. If the defendant is not a state official but a Medicaid patient who lies to a doctor to get drugs that, in the end, Medicaid reimburses the cost of, is this lie a matter covered by the statute? Or if a patient should give his doctor false information that results in a medical test or procedure, the cost of which is reimbursed by Medicare, is the patient guilty of a section 1001 violation? The ambiguities of the language of section 1001 fit squarely within the Rule of Lenity, and we resolve them in favor of Ford. See Skilling, 130 S.Ct. at 2932 (invoking the Rule of Lenity to the ambiguity in the honest services statute, 18 U.S.C. § 1346); see also United States v. Santos, 553 U.S. 507, 514, 128 S.Ct. 2020, 170 L.Ed.2d 912 (2008) (same result based on the Rule of Lenity in the money laundering statute). Accordingly, we vacate Ford's convictions for violating section 1001 because his non-disclosures were not matters of federal jurisdiction.