USA v. William Patrick CLARK.  No. 14-1251.

William Patrick Clark’s trucking business was hired to perform hauling services on a state-and federally funded highway project in Missouri. Because federal funds were in play, Clark’s contract with the project’s general contractor required that he pay his truck drivers the federal prevailing wage pursuant to the Davis-Bacon Act (which, at the time, was $35.45/hour). Clark chose not to do so, however, individually contracting with his drivers for roughly $15/hour instead. Throughout the project, as required by his contract, Clark submitted weekly payroll certifications in which he falsely attested to paying his workers $35.45/hour. After his work on the project concluded, he submitted an affidavit to the Missouri Department of Transportation (“MODOT”), certifying compliance with Missouri state law and its state wage order. On account of these attestations, the government charged Clark with ten counts of making false statements in violation of 18 U.S.C. § 1001.

On appeal, Clark argues that the government presented insufficient evidence for the jury to conclude that his false statements were material to the federal government—an element of § 1001.

A. Materiality of the MODOT Affidavit

18 U.S.C. § 1001(a)(3) provides that “whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully . . . makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry,” faces criminal liability. In other words, the statute makes it a criminal offense to render a statement that: (1) is false, (2) is material, (3) is knowingly and willfully made, and (4) concerns a matter within the jurisdiction of a federal department or agency. United States v. Turner, 551 F.3d 657, 662 (7th Cir.2008). For a statement to be materially false, it “must have `a natural tendency to influence, or [be] capable of influencing, the decision of the decisionmaking body to which it was addressed.'” United States v. Gaudin, 515 U.S. 506, 509, 115 S.Ct. 2310, 132 L.Ed.2d 444 (1995) .  “We do not require the statement to actually influence the agency to which it was directed, or even that the agency rely on the statement in any way.” United States v. Lupton, 620 F.3d 790, 806 (7th Cir.2010). Rather, “[t]he `central object’ of the materiality inquiry is `whether the misrepresentation or concealment was predictably capable of affecting, i.e., had a natural tendency to affect, the official decision.'” Turner, 551 F.3d at 663 .

In terms of the jurisdiction element, “[a] false statement may fall within section 1001 even when it is not submitted to a federal agency directly and the federal agency’s role is limited to financial support of a program it does not itself directly administer.” United States v. Petullo, 709 F.2d 1178, 1180 (7th Cir.1983). “In such cases, the necessary link between deception of the non-federal agency and effect on the federal agency is provided by the federal agency’s retention of the ultimate authority to see that the federal funds are properly spent.” Id.

Clark concedes that his statements in the MODOT affidavit were false.  He argues, though, that the government failed to introduce evidence at trial proving that his misstatements, which he submitted to a state agency and which concerned compliance with Missouri state law, were materially false.

Whether a statement is “material” is a fact question for the jury. United States v. Beaver, 515 F.3d 730, 740 (7th Cir.2008). Normally, “[a] defendant who challenges the sufficiency of the evidence faces a daunting standard of review. In considering such a challenge, we view `the evidence in the light most favorable to the Government, defer[] to the credibility determination of the jury, and overturn[] a verdict only when the record contains no evidence, regardless of how it is weighed, from which the jury could find guilt beyond a reasonable doubt.'” United States v. Carter, 695 F.3d 690, 698 (7th Cir.2012)

Unfortunately, the government appears to miss Clark’s point. The affidavit Clark submitted to MODOT on September 27, 2011 swears only that he complied with “all provisions and requirements set out in Chapter 290, Sections 290.210 through and including 290.340, Missouri Revised Statutes, pertaining to the payment of wages to workmen” and with “Annual Wage Order No. 50” issued by the Missouri Highway and Transportation Commission. On its face, therefore, the form gives us no indication of its ability to affect the federal government.

And the government submitted no evidence at trial that a federal agency or department ever received the affidavit, that the federal government viewed or considered the affidavit when disbursing federal funds or conducting project audits, or—more fundamentally—that it even knew that Missouri required such affidavits.

For these reasons, we agree with Clark that the government introduced no evidence from which a rational trier of fact could conclude that the contents of the affidavit were capable of influencing the decisions of the federal government beyond a reasonable doubt. Its failure to do so is fatal to its materiality argument.[3]

Accordingly, we reverse Clark’s conviction.

By:  Chicago Federal Criminal Defense Attorney Michael J. Petro

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