Court Opinion

ID: 9481523
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:21:45.054686+00
Date Added: 2024-06-11T17:48:22.658537
License: Public Domain

RESTANI, Judge:
I dissent. I do not agree with the majority’s conclusions as to the false statement counts of the indictment. I also disagree as to the effect of allusions to ethnic stereotypes.
As the majority points out, defendant relies on Bronston v. United States, 409 U.S. 352, 93 S.Ct. 595, 34 L.Ed.2d 568 (1973) (evasive, but literally true, statement does not warrant perjury conviction) for the proposition that a conviction on false statement counts cannot stand if premised upon literally true statements. Bronston has been applied to other offenses involving false statements. See, e.g., United States v. Poutre, 646 F.2d 685 (1st Cir.1980). Similar reasoning has also been applied to a false statement/false representation statute in this Circuit. See United States v. Diogo, 320 F.2d 898 (2d Cir.1963) (Sham marriage nonetheless a marriage for false statement purposes). This Circuit, however, requires that literal truth be *201judged in context. United States v. Schafrick, 871 F.2d 300, 303-04 (2d Cir.1989).
In discussing the false statement counts, the majority states that “[t]he evidence in this case shows that the point of sale address was required in Box 31 of Form 1500.” At 192. While I agree that the evidence shows that the point of sale address was what was sought by the form drafters, what was specifically requested in Box 31 of Form 1500 was simply an office address of the supplier. Form 1500 did not specify “point of sale.” In its discussion of the fraud counts, the majority answers Weiss’s argument that the Manual applies only to carriers by stating that the point of sale address is required by Form 1500, and that “[t]he Manual, therefore, is not the basis for this prosecution.” At 194 (citing Weiss, 914 F.2d at 1521). The majority apparently used the same reasoning, that the Manual simply explained the proper address to be furnished on the Form 1500, for its finding that Weiss was properly convicted on the false statement counts. In failing to address completely Weiss’s arguments, which go beyond those presented previously by Gleicher and PMSC, the majority has applied the reasoning upholding the convictions of the other two defendants instead of using the reasoning which this court should employ in determining whether the defendant before us on this appeal may succeed by arguing new issues.
In the previous appeal, defendant Gleicher argued that the court could not rely on the Manual to convict him because, at the time in question, it had not been approved by the Office of Management and Budget. Alternatively, Gleicher argued that the relevant portions of the Manual did not cover Box 31 of Form 1500.1 It must also be noted that Gleicher argued exclusively that the Manual could not be used as a basis for conviction for fraud. This makes sense, for if the Manual could not be a basis for a fraud conviction, by implication it could not be a basis for a false statements conviction. This reasoning does not work both ways, however. The court could uphold the convictions as to fraud while finding that defendants had made not actual “false statements.” This is because “[i]t is well settled that to establish such a scheme [to defraud], it is not necessary that there should be actual misrepresentation of an existing fact. It is sufficient if the proposed venture be presented in such a way as is calculated to carry out the intent to deceive.” Fournier v. United States, 58 F.2d 3, 5 (7th Cir.) cert. denied, 286 U.S. 565, 52 S.Ct. 647, 76 L.Ed. 1297 (1932). For instance, “the deceitful concealment of material facts can be considered actual fraud ...” United States v. Bush, 522 F.2d 641, 651 (7th Cir.1975), cert. denied, 424 U.S. 977, 96 S.Ct. 1484, 47 L.Ed.2d 748, reh’g denied, 425 U.S. 986, 96 S.Ct. 2194, 48 L.Ed.2d 811 (1976). Weiss was familiar with the Manual, knew that the Secretary obligated the carriers to determine the point of sale and took steps to conceal the point of sale. Barring other problems, Weiss’s fraud conviction could stand because “[t]he aspect of the scheme to ‘defraud’ is measured by a nontechnical standard. It is a reflection of moral uprightness, of fundamental honesty, fair play and right dealing in the general and business life of members of society.” Gregory v. United States, 253 F.2d 104, 109 (5th Cir.1958).
The determination of whether or not a defendant has made a false statement is largely “technical.” One cannot be convicted of having made a false statement if the statement was literally true. Bronston, supra. Defendant’s knowledge of the Manual does not create a context which renders an otherwise literally true statement false. Compare Schafrick, supra. By its own terms, “[t]he Medicare Carriers Manual provides the practical operating instructions needed by the contractors responsible for administration of the Supplementary Medical Insurance Program — Part B of Medicare.” Appendix at 79. Moreover, “[t]his manual was not promulgated as a rule; it was no more than an informal *202interpretation of existing statutes and regulations.” Avol v. Secretary of Health and Human Services, 883 F.2d 659, 661 (9th Cir.1989). The Secretary of Health and Human Services publishes manuals for carriers who are contractually bound to follow their provisions. “[T]hese provisions are designed to put carriers, not practitioners [those participating in the Medicare program], on notice.” Glick v. Secretary of the Department of Health and Human Services, 714 F.Supp. 39, 41 (D.Mass.1989) (Carrier erred in determining that practitioner had received over-payments on the basis that he had failed to provide documentation, allegedly required by the Carriers Manual, of the services which he performed). As the government successfully argued in Melashenko v. Bowen, No. CV-P-87-533, 1990 WL 159905 (E.D.Calif. June 19, 1990)2, the manuals create no rights of due process in third parties, i.e., suppliers of medical services, assuming arguendo that the manuals could be read as mandating procedures. Like another such manual, the Claims Manual (produced by the Social Security Administration), “[i]t has no legal force, and does not bind” the Secretary. Schweiker v. Hansen, 450 U.S. 785, 789, 101 S.Ct. 1468, 1471, 67 L.Ed.2d 685 (per curiam), reh’g denied, 451 U.S. 1032, 101 S.Ct. 3023, 69 L.Ed.2d 401 (1981). No more can it bind Weiss in filling out government forms for false statement purposes. Box 31 of Form 1500 required Weiss to put down the corporation’s address. If what Weiss inserted was literally true, the court erred in upholding his false statement convictions merely because the non-binding Manual called for the particular office at the point of sale.
I do not believe, however, that the false statement counts should be dismissed. For Weiss’s statements to be literally true, the corporation must have had real offices, and not merely sham ones, at the addresses provided. Counts Eight through Ten of the Indictment deal with the allegedly false statements regarding the Illinois address. It appears that the corporation may have had a real sales office there. Counts Eleven through Sixteen of the Indictment deal with the false statements regarding the Ohio address. The evidence indicates that this was the address of a full-time mother of eight who had sold a few products for defendants. That this could be called a true office is unlikely. Counts Seventeen and Eighteen deal with the false statements regarding the New Jersey address, where the corporation maintained a warehouse. This is a middle case. For false statement purposes, the trial judge should have instructed the jury to decide, independently of the Manual, whether the defendants maintained an actual office at each of these locations. I would vacate Weiss’s conviction on counts Eight through Ten, Counts Twelve through Sixteen and Count Eighteen and remand for a new trial to address the question of whether the corporation’s various offices were real or sham, for purposes of the false statement counts.3
Of even greater concern to me, however, is the majority’s finding that the prosecutor’s opening and summation did not improperly invoke religious or ethnic prejudice.4 I conclude that the majority has failed to apply United States ex rel. Haynes v. McKendrick, 481 F.2d 152 (2d Cir.1973), properly.5 According to Haynes, once the court determines that the prosecutor has made improper racial remarks, we *203must determine whether there was a 'probability of prejudice. Id. at 159. The court did not state that this was the proper test for all cases, and as noted by the majority it expressly left open the question of “whether jury verdicts tainted by racially prejudicial statements by the prosecutor should be measured by the harmless error test, but rather should receive automatic reversal.” Id. at 161.
Again, in this case the majority does not decide this issue because of its finding that the remarks alluding to ethnic stereotypes were not improper. I disagree, the context of the remarks, from the opening statement likening the trial to a book, through the repeated references to greed, to the summation wherein the title of the book is revealed, seem calculated to raise prejudice. The trial court, however, apparently did not perceive a malicious intent and there is a possibility that the offensive remarks were simply ill-considered. But regardless of the prosecutor’s intent we must have concern for what message the jury received. That is the essence of Haynes. The court gave no curative instruction nor did it examine the jury on this point either before or after receipt of the verdict.6 Although such steps raise other problems, in their absence we must assume that a prejudicial message was received.
I am not dissuaded from this conclusion by the fact that the title of Shakespeare’s play refers to the good Antonio and not to the greedy, if redeemed, Shylock. I doubt that many people who have not read The Merchant of Venice recently are familiar with Antonio. The problem is not one of literary analysis but of a common negative stereotype. Shylock, a dominant figure in The Merchant of Venice, is a negative stereotype, all too familiar to those who have never read the Bard or even to those whose last passing acquaintance with him was as high school sophomores.
As noted in Haynes, when racial prejudice is involved, “[m]ore than just harm to the individual defendant is involved ...” Haynes, 481 F.2d at 157. Moreover, “[rjacially prejudicial remarks are ... so likely to prevent the jury from deciding a case in an impartial manner and so difficult, if not impossible, to correct once introduced, that a good argument for applying a more absolute standard may be made.” Id. at 161. Prejudicial ethnic and religious remarks should face similar treatment. Nonetheless, in United States v. Modica, 663 F.2d 1173 (2d Cir.1981), cert. denied, 456 U.S. 989, 102 S.Ct. 2269, 73 L.Ed.2d 1284 (1982) (prosecutor’s improper summation vouching for the credibility of its witness not reversible error because the summation remarks were the only improper behavior that occurred and the prosecution had an overwhelming case), the court expressed its frustration when confronted by non-prejudicial prosecutorial misconduct, because of reluctance to reverse justly decided cases.
Here a less than absolute standard should not bar reversal. As indicated, the probability that the jury received a message of ethnic and religious bias exists and error was made as to the false statement counts. The error in placing the Carrier Manual in its proper place with regard to the false statement counts may also have infected the other charges. Intent is crucial, and I would not categorize the evidence as overwhelming. Because of the combination of errors, I would reverse conviction on all counts against Weiss and remand for a new trial.

. PMSC adopted Gleicher’s arguments and also argued that we should overturn its conviction due to alleged prosecutorial misconduct.

. In Melashenko, a doctor claimed that he had been improperly excluded from the Medicare program. He contended, inter alia, that the manuals gave him procedural rights.

. Weiss was acquitted on Counts Eleven and Seventeen.

. Although the prosecutor’s conduct did not warrant reversal in the prior Weiss decision, in that case the court was faced with a defendant which indicated it was not bothered by the improper allusion. Weiss 914 F.2d at 1525. Furthermore, the issue of whether the Carriers Manual created obligations as to third parties for false statement purposes was not presented directly.

.Because I find reversal is necessitated by negative comments as to ethnicity, I do not examine the precise effect of invocation of class prejudice in this case. See United States v. Stahl, 616 F.2d 30 (2d Cir.1980).

. In this situation, it is likely that examination of the jurors would violate Rule 606, Federal Rules of Evidence.