Court Opinion

ID: 9476899
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:08:35.124179+00
Date Added: 2024-06-11T17:45:34.518590
License: Public Domain

PREGERSON, Circuit Judge,
dissenting:
I dissent. I believe the facts of this case fulfill neither section 1001’s jurisdiction requirement nor its materiality requirement. Moreover, I believe it is evident that Congress never intended that section 1001 should apply to individuals applying for state unemployment benefits.
Section 1001 states in full:
Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined not more than $10,000 or imprisoned not more than five years, or both.
(Emphasis added.)
There can be no conviction under section 1001 unless both materiality and jurisdiction are shown. See United States v. *1163Green, 745 F.2d 1205, 1208 (9th Cir.1984), cert. denied, 474 U.S. 925, 106 S.Ct. 259, 88 L.Ed.2d 266 (1985).

Jurisdiction

To satisfy section 1001’s jurisdiction requirement, the defendant’s false statement must “relate to a matter in which a federal agency has power to act,” Green, 745 F.2d at 1208, and must concern the “authorized functions of an agency or department” rather than “matters peripheral to the business of that body.” United States v. Rodgers, 466 U.S. 475, 479, 104 S.Ct. 1942, 1946, 80 L.Ed.2d 492 (1984). The Supreme Court’s use of the term “authorized functions” is critical. While it is clear that in order to have jurisdiction an agency need not have a “financial or proprietary interest,” United States v. Gilliland, 312 U.S. 86, 91, 61 S.Ct. 518, 521, 85 L.Ed. 598 (1941), all of the cases cited by the majority opinion that have found a section 1001 violation have involved a direct relationship between the false statement and an authorized function of a federal agency. Thus, in Rodgers, the Supreme Court upheld the section 1001 conviction of a man who had lied repeatedly to the Federal Bureau of Investigation, causing that agency to spend hundreds of hours of staff time investigating his stories. In that case, the defendant’s false statements disrupted the FBI’s performance of its statutorily authorized functions. Similarly, in United States v. Balk, 706 F.2d 1056 (9th Cir.1983), false statements submitted to a grand jury were held to fall under section 1001 because the statements were falsified welder certifications that the defendant used to obtain work as a navy contractor. These false statements directly damaged the U.S. Navy’s ability to operate properly. The remaining cases cited by the majority opinion also involve false statements that directly affect authorized functions of the federal government. Bryon v. United States, 396 U.S. 64, 71, 90 S.Ct. 355, 360, 24 L.Ed.2d 264 (1969) (false affidavit filed with National Labor Relations Board); United States v. Canel, 708 F.2d 894 (3d Cir.), cert. denied, 464 U.S. 852, 104 S.Ct. 165, 78 L.Ed.2d 151 (1983) (false statement to government of United States territory, which is under direct federal supervision); United States v. Cartwright, 632 F.2d 1290 (5th Cir.1980) (fraud within institution insured by Federal Savings & Loan Insurance Corporation).
The majority opinion does not identify any “authorized function” of any federal agency that is directly affected by false statements made by individuals who apply to the state of Oregon for unemployment benefits. The majority opinion discusses 42 U.S.C. § 503(a)(7), which requires that states, on the request of any federal agency, make available statistical information about recipients of unemployment compensation. Section 503(a)(7), however, only authorizes the federal government to obtain information from the state; it does not establish any direct information-gathering relationship between the federal government and any individual applying for unemployment benefits in Oregon. Thus, a false statement made by an applicant for Oregon unemployment payments does not implicate an “authorized function” of a federal agency. Rather, the false statement is a matter that is “peripheral to the business” of the federal government. See Rodgers, 466 U.S. at 479, 104 S.Ct. at 1946. Therefore, I would hold that section 1001’s jurisdiction requirement is not satisfied.

Materiality

The materiality requirement of section 1001 is closely related to the jurisdiction requirement. “A statement is considered material if it has the propensity to influence agency action....” United States v. Vaughn, 797 F.2d 1485, 1490 (9th Cir.1986). I do not believe that a false statement made by an individual applicant for Oregon unemployment benefits is material to the authorized functions of any federal agency. The federal government’s only active duty with respect to state unemployment compensation programs is to pay for administrative costs. A false statement by any individual applying for benefits in Oregon would have no propensity to affect the federal government’s decision whether to provide administrative funding, or the amount thereof, for the state program. There is no nexus between false state*1164ments made to the state by individual claimants and the federal government’s power to act. Therefore, I would hold that section 1001's materiality requirement is not satisfied.

Congressional Intent

I believe it is clear that Congress did not intend that section 1001 should apply to false statements made by applicants for state unemployment benefits. After section 1001 was enacted, Congress enacted 18 U.S.C. § 1919, which specifically criminalizes the making of false claims for federal unemployment benefits. Congress apparently thought that section 1001 did not cover the filing of false claims as to federal unemployment benefits; otherwise, it would not have felt the need to enact section 1919. If Congress felt that section 1001 did not cover the filing of false claims for federal unemployment benefits, it is hard to accept the argument that when Congress enacted section 1001 it intended to cover the filing of false claims for state-funded unemployment benefits. Moreover, had Congress intended to make giving false statements with respect to state-funded unemployment insurance a federal crime, it would have enacted a provision similar to section 1919 to accomplish that purpose. The fact that Congress did not enact a prohibition concerning false claims filed with respect to state-funded unemployment insurance seemingly reflects Congress’ view that prosecution of such misrepresentations is better left to the states.
Because I believe that section 1001 does not apply to false statements made by applicants for state unemployment compensation and that prosecution of such claims rests with the states, I would reverse.