Court Opinion

ID: 9462902
Source: CourtListenerOpinion
Date Created: 2023-08-04 22:53:04.640949+00
Date Added: 2024-06-11T17:32:00.551187
License: Public Domain

Eugene A. WRIGHT, Circuit Judge
(specially concurring):
I concur but add a few words on the subject of Darrell Goldfine’s conviction under Section 1001. It was proper because: (a) despite the anticipation of criminal prosecution the DEA agents were conducting a legitimate administrative investigation at the time they asked the question generating Goldfine’s false reply; and (b) the false statement was clearly “material” under Brandow.
By the plain words of § 1001 Goldfine’s conduct was proscribed and the conviction proper. See Bedore, 455 F.2d at 1110. Even if the statute is read more narrowly than its plain words dictate, our interpretive decisions in Brandow and Bedore when read together stand for this rule: Section 1001 proscribes the willful submission to federal agencies, by one asserting or possessing a claim against or privilege from the United States, of false statements calculated to induce, and having the intrinsic capability of inducing, favorable agency reliance or action. Compare Brandow, 268 F.2d at 565, with Bedore, 455 F.2d at 1111.
Darrell Goldfine was dispensing controlled substances by virtue of a governmental privilege and was required to register annually to preserve the privilege. [21 U.S.C. § 822(a); 21 C.F.R. § 1301.21 (1974)]. To determine the propriety of reregistration, the Attorney General must consider among others these factors: the degree to which the registrant has avoided improper diversion of controlled substances; his past distribution experience generally; and “such other factors as may be relevant to and consistent with the public health and safety.” [21 U.S.C. § 823(b) and (e)].
To ascertain the degree of statutory compliance and to gather facts for determining whether proposed registration or reregistration is or is not “inconsistent with the public interest” [21 U.S.C. § 823(b) and (e)], the Attorney General has broad authority to conduct administrative inspections. [Id. § 880]. It was such an inspection that was conducted here.
To be sure, the DEA agents may have contemplated criminal proceedings when they questioned Darrell Goldfine and they gave appropriate advance warnings. But this fact does not compel us to conclude, as would Judge Ferguson, that “[t]he question of [Darrell Goldfine’s] continued status as a registrant was wholly peripheral to the criminal investigation.”
The agents conducted their “accountability audit” pursuant to Section 880, which authorizes “administrative inspections.” The investigators obtained only an administrative warrant.
Goldfine presented no evidence to overcome the presumptive legitimacy of the administrative procedure (see, e. g., Phillips v. Fidalgo Island Packing Co., 238 F.2d 234,16 Alaska 338 (9th Cir. 1956)), other than the fact that the agents knew certain criminal acts had occurred. However, as 21 U.S.C. § 883 indicates, mere suspicion on the part of DEA agents of a criminal violation does not mean that the agency will necessarily recommend prosecution. The DEA may give the regulated party “an opportunity to present his views,” id., and if satisfied with the explanation may choose not to seek a criminal prosecution by the Attorney General.
Thus I conclude that despite the possibility of criminal prosecution, there was indubitably a legitimate administrative purpose for the investigation and for the questions asked during it.
*829Under the “intrinsic capabilities” test of Brandow, 268 F.2d at 565, Goldfine’s false statement was clearly “material” despite the agents’ knowledge of its falsity. This court has in several decisions affirming § 1001 convictions determined that the false statement was in fact capable of influencing agency action. United States v. Deep, 497 F.2d 1316, 1321-22 (9th Cir. 1974) (en banc); United States v. Cole, 469 F.2d 640, 641 (9th Cir. 1972); Robles v. United States, 279 F.2d 401, 404 (9th Cir. 1960). Yet since each decision affirmed the conviction on this basis, there was no need to reach the question squarely presented in Brandow: Whether a § 1001 conviction may be sustained if the false statement had only the “intrinsic capability” of misleading or defrauding the United States.
That is the question before this court. Brandow, being neither expressly nor impliedly overruled, controls the facts of this case.*

 Ignoring for the moment the distinction between oral unsworn statements and written statements under oath, Bedore and Brandow are apparently incompatible on their facts. However, Bedore did not involve any “claim or privilege.” In Bedore we expressly excepted the “claim or privilege” cases from our holding. The “intrinsic capability” test announced in Brandow applies with greater force to an obvious “claim or privilege” case, such as this one, than to the very facts before the Brandow court.