United States v. Shah

[364] Garwood
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
__________________
No. 93-9074
__________________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
NITIN SHAH,
Defendant-Appellant.
______________________________________________
Appeal from the United States District Court for the
Northern District of Texas
______________________________________________
(January 31, 1995)
Before POLITZ, Chief Judge, GARWOOD, and BENAVIDES, Circuit Judges.
GARWOOD, Circuit Judge:
Defendant-appellant Nitin Shah (Shah) appeals his conviction,
following a jury trial, of making a false statement in violation of
18 U.S.C. § 1001. We affirm.
Facts and Proceedings Below
The evidence, viewed in the light most favorable to the
verdict, reflects the following.
On June 9, 1992, the General Services Administration (GSA)
issued a solicitation for the purchase of irons, ironing boards,
and ironing board pads. The solicitation called for a bid from
each of a number of prospective suppliers. Because the bid was to
be negotiated, not sealed, the offeror was allowed to alter the
price after submission but before the award. Among the prospective
bidders was Omega Electronics (Omega), a small California company
that had held the previous contract for steam irons with GSA.
Omega had also previously dealt with GSA and the GSA contract
specialist, Linda Brainard (Brainard), on an undisclosed number of
small purchase contracts. Brainard testified that these contracts
occasioned numerous telephone contacts between her and Shah,
Omega's president.
On July 1, 1992, GSA mailed the solicitation for iron products
to Omega's address in San Carlos, California. The solicitation
contained the following language under section 13, entitled
"Certificate of Independent Price Determination":
"(a) The offeror certifies thatSQ
(1) The prices in this offer have been arrived at
independently, without, for the purpose of
restricting competition, any consultation,
communication, or agreement with any other offeror
or competitor relating to (i) those prices, (ii)
the intention to submit an offer, or (iii) the
methods or factors used to calculate the prices
offered;
(2) The prices in this offer have not been and
will not be knowingly disclosed by the offeror,
directly or indirectly, to any other offeror or
competitor before bid opening (in the case of a
sealed bid solicitation) or before contract award
(in the case of a negotiated solicitation) unless
otherwise required by law; and
(3) No attempt has been made or will be made by
the offeror to induce any other concern to submit
or not to submit an offer for the purpose of
restricting competition.
"(b) Each signature on the offer is considered to be a
certification . . . that the signatorySQ
(1) . . . has not participated and will not
participate in any action contrary to subparagraphs
2
(a)(1) through (a)(3) above . . . ."
The same solicitation was also sent to Kipper & Company, a New York
concern specializing in the supply of hand and power tools to
commercial and governmental customers. Jerome Kipper (Kipper),
president of Kipper & Company, testified that he and Shah had
spoken a "few times" on the telephone.1 Besides these
conversations, which occurred sometime in November or December of
1991, Shah and Kipper communicated only occasionally and very
briefly during the early part of 1992.
On July 7, 1992, shortly after Omega received the GSA
solicitation but one day before Omega sent it out, Shah telephoned
Kipper and suggested that they share their bids. Shah explained
that, by fixing and exchanging price information, they could rig
the bidding and thus split the award. According to his plan, Shah
would acquire the delivery depots west of the Mississippi, while
Kipper would take those to the east. In response to this proposal,
Kipper told Shah that he "questioned . . . [Shah's] ethic but
admired his ambition." Although he clearly did not agree to trade
price information, Kipper testified that he was "non-committal" at
the close of the conversation. Shah again left his phone number.
The next day, July 8, 1992, Shah signed and mailed the
solicitation to GSA, in which he certified that the prices
contained in the bid "have not been and will not be disclosed." In
the solicitation, he identified himself as the Managing Partner of
Omega and listed the San Carlos, California, address as well as the
1
During those conversations, Shah sought a price quote on a
large quantity of Black & Decker irons.
3
telephone number earlier given to Kipper. Shah also filled in
blanks throughout the solicitation, including information above and
below section 13, the certification of independent price
determination.
Kipper reported his July 7 conversation with Shah to both GSA
and his attorney. Under the supervision of a GSA investigator,
Kipper made two telephone calls to Shah on July 15, 1992, several
days after both Kipper and Shah had submitted their bids to GSA.
Both conversations were recorded and transcribed. In the first
call, Kipper introduced himself and apologized for not having
called him back "the other day." In vague terms, Kipper reminded
Shah of their July 7 conversation. After agreeing that they could
still withdraw their submitted bids, Shah asserted that the
swapping of price information would be to their mutual advantage.2
When Kipper asked Shah if he had ever swapped prices with other
vendors, Shah answered,
"No. This is the first occasion and I SQ you sounded
that you're a . . . shrewd businessman, and you will
understand the logistics and mechanics of it, so that's
why I talk to you frankly. I wouldn't be talking . . .
like this to anybody else.
"MR. KIPPER: Okay.
"MR. SHAH: I just took a calculated risk, rather. You
know, you can only talk . . . to certain people, not all
the people would be cooperative and all that. . . . I
hope you understand what I'm saying."
Without detailing a plan to swap prices, Kipper ended the
conversation and told Shah he would call him back. The jury heard
2
Shah observed that, in a bidding battle, "we lose money and
the Government gains that"; he described the plan as working
"together as a complement rather than an adversary."
4
this entire conversation. Although the transcript and audiotape of
the second July 15 conversation were not put in evidence, Kipper
testified that, during that conversation, they agreed to fax to
each other their bids and, further, that Shah requested
confidentiality. They then carried out this agreement.3
On January 6, 1993, a grand jury returned a one-count
indictment against Shah charging him with "knowingly and willfully"
having made a "false, fictitious and fraudulent" statement to GSA,
a government agency, contrary to 18 U.S.C. § 1001, namely "the
statement that the prices in this offer have not been and will not
be knowingly disclosed by the offeror, directly or indirectly, to
any other offeror or competitor before bid opening or contract
award." The indictment formed the basis of an arrest warrant,
which two GSA special officers executed at Shah's San Carlos,
California, address. After entering a plea of not guilty, Shah was
tried and convicted before a jury in July 1993. At the close of
the government's case (Shah presented no evidence), Shah properly
but unsuccessfully moved for acquittal. He was sentenced to three
years' probation and fined $5,000. Shah filed a timely appeal.
Discussion
On appeal, Shah contends that the jury lacked sufficient
evidence of identity and falsity, that the court erred in refusing
a proposed instruction, and that the indictment varied fatally from
3
Shah faxed Kipper a copy of the bid pages from his
solicitation, and Kipper sent fictitious price information in
exchange. The actual fax was retrieved by Kipper & Company's
vice president, Adam Mellon, who authenticated the document at
trial.
5
the proof at trial. Shah also argues that a promise of future
performance cannot, as a matter of law, constitute a violation of
18 U.S.C. § 1001. This last issue, as well as the related
evidentiary claim, are the pith of Shah's appeal and, for that
reason, will be discussed first.
Section 1001, known as the False Claims Act, prohibits the
knowing and willful making of "false, fictitious or fraudulent
statements or representations"4 on a matter "within the
jurisdiction of any department or agency of the United States." 18
U.S.C. § 1001.5 The purpose of this broadly worded statute is "to
protect the authorized functions of governmental departments and
agencies from the perversion which might result from . . .
deceptive practices." United States v. Gilliand, 61 S. Ct. 518, 522
(1941). To establish a violation, the government must prove five
elements: "(1) a statement, that is (2) false (3) and material,
4
In applying the terms "false, fictitious or fraudulent," we
have emphasized the potentially perverting effect of the
statements, which "must have a natural tendency to influence, or
be capable of affecting or influencing, a governmental function."
United States v. Markham, 537 F.2d 187, 196 (5th Cir. 1976),
cert. denied, 97 S. Ct. 739 (1977). The alleged
"misrepresentation need not have influenced the actions of the
Government agency, and the Government agents need not have been
actually deceived." Id.
5
Section 1001 provides:
"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, fictitious or fraudulent statements or
representations, or makes or uses 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."
6
(4) made with the requisite specific intent, [and] (5) within the
purview of government agency jurisdiction." United States v.
Puente, 982 F.2d 156, 158 (5th Cir.) (quoting United States v.
Lichenstein, 610 F.2d 1272, 1276 (5th Cir.), cert. denied, 100
S. Ct. 2991 (1980)), cert. denied, 113 S. Ct. 2934 (1993).6 With
regard to the "requisite specific intent," we have observed, "A
false representation is one . . . made with an intent to deceive or
mislead." United States v. Guzman, 781 F.2d 428, 431 (5th Cir.),
cert. denied, 106 S. Ct. 1798 (1986).7 In words more relevant to
this case, the district court correctly instructed the jury that
the government must prove "that the defendant made the false
statement for the purposes of misleading the General Services
Administration."
The central issue in this case, however, focuses only on the
6
In this Circuit, whether a statement is material is a
question of law. United States v. McIntosh, 655 F.2d 80, 82 (5th
Cir. 1981), cert. denied, 102 S. Ct. 1450 (1982). Contra United
States v. Gaudin, 28 F.3d 943 (9th Cir. 1994) (en banc) (breaking
with every other circuit decision on point to rule that
materiality is a question of fact for the jury), cert. granted in
part, 63 U.S.L.W. 3268 (Jan. 6, 1995). This question was
therefore not before the jury.
7
Section 1001, however, "does not require an intent to
defraud SQthat is, the intent to deprive someone of something by
means of deceit." Lichenstein, 610 F.2d at 1277. In this sense,
the False Claims Act seeks to protect more than the simple
proprietary interests of the federal government; it "has for its
object the protection and welfare of the government,"
specifically protection against "deceit, craft or trickery"
designed "to interfere with or obstruct one of [the United
States's] lawful government functions." McNally v. United
States, 107 S. Ct. 2875, 2881 n.8 (1987) (citation omitted).
Section 1001 is thus distinct from general fraud statutes, such
as the mail fraud statute, wherein "any benefit which the
Government derives from the statute must be limited to the
Government's interests as property holder." Id.
7
second element, falsity. We are asked to decide whether what Shah
stated or represented in the solicitation could violate section
1001, and, if so, whether the government proved that it did. The
critical language in the solicitation reads, "The prices in this
offer have not been and will not be knowingly disclosed by the
offeror . . . to any other offeror or competitor before . . .
contract award." The statement was made when Shah submitted the
solicitation on July 8, 1992. As of that date, there is no
evidence that Shah had disclosed any price information. He had
only proposed doing so the day before. It was not until July 15
that Shah actually disclosed the information. Therefore, only the
"will not disclose" portion of the statement is at issue.
By disclosing his bid to a competitor, Shah broke a promise
made and certified in the solicitation. As the government
concedes, however, a broken promise is not alone a basis for
criminal liability under section 1001. Otherwise, as Shah
correctly points out, every breach of a governmental contract would
be converted into a section 1001 false statement, thus exposing the
breaching party to criminal prosecution. To establish a violation,
then, the government must prove, among other things, that the
statement "I will not disclose price information before the
contract award" was false when made. Shah contends that this
statement can be neither true nor false when made because it is
simply a prediction of future performance. As such, the statement
is either true or false only after the promise is carried out or
broken. The government, on the other hand, argues that this
statement clearly implies and manifests an intent which itself may
8
render a promise true or false when made and which may be proved by
circumstantial evidence of Shah's state of mind. According to the
government, if Shah all the while intended to disclose price
information, but nevertheless promised not to, he made a false and
fraudulent statement to GSA in violation of section 1001.
To support its argument, the government cites two cases from
other circuits, United States v. Hartness, 845 F.2d 158 (8th Cir.),
cert. denied, 109 S. Ct. 308 (1988), and United States v. Mandanici,
729 F.2d 914 (2d Cir. 1984). In Hartness, the defendant argued
that he could not be prosecuted under section 1001 for making a
false projection of future income because a projection, when made,
is neither true nor false. Hartness, 845 F.2d at 160. Although
the issue posed in Hartness is identical to that here, the facts
are somewhat different. There, projections of income on an
application to the Farmers Home Administration were governed in
part by objective criteria, by facts then in existence: namely,
the amount of current income.8 Id. The court recognized that a
wrong prediction, standing alone, cannot support liability under
section 1001: "No one can be prosecuted for failing to accurately
predict the future." Id. The existence of verifiable facts in the
projection equation, however, distinguished the defendant's
statement from a pure prediction and made his prosecution that much
less problematic. Id. at 160-61. Hartness, therefore, is
different from the case at hand, in which the truth or falsity of
8
In Hartness, the defendant had based the projection on full-
time employment even though the applicant, a full-time college
student, had then worked only part time.
9
Shah's statement is not so readily or objectively discernible.
Mandanici is more persuasive. There, the defendant was
convicted of making the following two false statements: (1) that
the estimated price of some renovation work was $88,000 and (2)
that he would do $88,000 worth of work. Mandanici, 729 F.2d at
916-17. The government claimed that these two statement were false
when made. According to the government, the first statement was
false because, at the time it was made, the defendant knew the work
would not cost that much. Id. at 919-20. The court found
insufficient evidence to support that charge because the evidence
at trial addressed only the defendant's intention not to carry out
the work and not his knowledge of the costs. Because there was no
evidence on the record from which a juror could find that the work,
if performed, would cost anything other than $88,000, the court
reversed the conviction on this count. Id. at 920.
The court, however, upheld the conviction on the second count.
Id. The second statement was a promise to do $88,000 worth of
workSQin other words, to do the renovation work that was the basis
of the price estimate. According to the charge, when the defendant
made this statement, he actually did not intend to do $88,000 worth
of work. Id. The circumstantial evidence in support of this
charge included a letter indicating completion of the work and
false documentation of expenditures, both submitted after the
statement was made. Id. Based on this "ample" evidence, the court
agreed that the defendant had "falsely represented his intentions"
and upheld the conviction. Id. Shah asserts that Mandanici (like
Hartness) is distinguishable because the false statement at issue
10
there was "intrinsically intertwined" with the price estimation, a
verifiable fact. That fact, however, was assumed true in
Mandanici, and its accuracy had no bearing on whether the defendant
had misrepresented his intentions to perform the renovation work
fully. In short, had the defendant done the work promised, there
was no reason to suspect that the price would be any less or more
than the $88,000 estimated. Nonetheless, Shah is correct that, in
focusing on the sufficiency of the evidence, the Second Circuit
presumed precisely what is at issue in this case: whether a
promise to perform can ever violate section 1001.
Although it is true that Mandanici does not explicitly support
the government's argument, Shah too fails to cite authoritative
support for his contention that a promise cannot be false and thus
the basis of prosecution under section 1001. Shah relies on
Williams v. United States, 102 S. Ct. 3088 (1982).9 In Williams,
the Supreme Court considered whether an insufficient funds check
could be considered a false statement within the meaning of 18
U.S.C. § 1014.10 Although the government argued that a check stated
that the drawer had sufficient funds in the bank, the Court
rejected this reading. The checks were, according to the Court,
not technically statements at all; they "served only to direct the
9
Shah also cites United States v. Glover, 25 F. Cas. 1339
(C.C.D.C. 1831). In Glover, the court held that a "promissory
oath cannot be the subject of an indictment for perjury," which
holding probably restates what the government does not dispute:
that to break a promise does not make the promise false when
made. In any event, Glover is too cursory to be helpful. Over
160 years old, the decision is exactly two sentences long, and
the context of the holding is unclear.
10
Section 1014 prohibits making a false statement to a bank.
11
drawee banks to pay the face amounts to the bearer, while
committing petitioner to make good the obligations if the banks
dishonored the drafts." Williams, 102 S. Ct. at 3091. This,
according to the Court, was the only "meaning" of a check. Id. at
3092. The Court noted, moreover, that the government's
interpretation of a check's meaning did not necessarily comport
with common understanding: "[I]t would be equally plausible to
suggest that . . . the drawer will have sufficient funds deposited
in his account by the time the check clears, or that the drawer
will make good the face value of the draft if it is dishonored by
the bank." Id. at n.7.
Like Mandanici, Williams does not directly confront the issue
presented in this case. Simply put, the issue in Williams was
whether a check makes a statement at all and, if so, what
statement. Although the Court could not agree with the government
about what exactly a check implicitly represents, there is no
dispute in this case as to what Shah stated and thereby clearly
implied. Contrary to Shah's suggestion, the Supreme Court did not
hold that a check was a promise and therefore not a statement.
Williams neither mentioned nor pursued a distinction between
statements and promises. The Court never suggests that a promise
cannot, as a matter of law, be or contain a statement or
representation. Instead, a check is not a statement because it is
not "a factual assertion," because it does not "make any
representation as to the state of petitioner's bank balance." Id.
at 3091. By relying on Williams for the proposition that a promise
is not a statement, Shah begs the very question at issue: whether
12
the statement at hand is capable of being termed true or false;
whether, in other words, a promise can be construed as "a factual
assertion."
Finally, the holding in Williams must be considered in
context; the Court was obviously troubled by the government's
characterization of a check's meaning and feared that such an
interpretation would expose anyone who bounced a check to federal
criminal liability. Id. at 3092. This concern mirrors Shah's
suggestion that the government's interpretation of false statement
or representation under section 1001 would criminalize every broken
promise. The government, however, makes no such contention here.
It is not breaking a promise that exposes a defendant to criminal
liability, but making a promise with the intent to break it.
Whereas breaking a promise cannot retroactively render the promise
false when stated, generally the making of a promise will
necessarily imply an intent to perform, the absence of which may
itself make a promise false when stated.
This distinction is critical. In the present context, the
statement "I will not disclose prices" is something more than a
prediction; it clearly contains a necessary implication, signified
by the phrase "I will," that the maker intends to do what he
promises. See Restatement (Second) of Torts § 530(1) cmt. c
("Since a promise necessarily carries with it the implied assertion
of an intention to perform it follows that a promise made without
such an intention is fraudulent . . . .") (emphasis added). The
implication is necessary because the statement's meaning depends on
it. In the setting of this case, the statement "I will not
13
disclose prices, but I intend to disclose prices" is nonsense
because the second clause negates the communicated meaning of the
first.11
That a promise can inherently be false when made is supported
by case law not cited by either party. In Elmore v. United States,
267 F.2d 595 (4th Cir.), cert. denied, 80 S. Ct. 82 (1959), the
defendant was convicted of making false statements and
representations on an application to the Farmers Home
Administration in violation of the Commodity Credit Corporation
Act, 15 U.S.C. § 714m(a).12 The defendant purchased surplus wheat
from the government on the condition that the wheat be used only to
feed livestock or poultry. Id. at 602. Although the defendant
certified as much, the wheat was later used for other purposes.
Following his conviction, the defendant argued that "false
statements" should be confined to "false statements of existing
fact":
"Since the statements by the defendant in regard to the
4200 bushels of wheat purchased . . . were not statements
of facts but promises as to the future use of the
commodity, it is said that he committed no crime. . . .
It is said that if Congress had intended to make false
11
We cannot ignore the plain but implicit meaning of the
promise. In United States v. Clark, 546 F.2d 1130, 1134 (5th
Cir. 1977), the defendant submitted a form on which he had made a
written statement assigning payments "said to be due" to a third
party even though that third party was due nothing. Though the
statement on the form was thus literally true, we went beyond
these words to consider what the defendant in effect represented,
namely, that he had something to assign. Id. See United States
v. Thomas, 593 F.2d 615, 620 n.17 (5th Cir. 1979) (ruling that
the statement was in effect false even if literally true), cert.
denied, 101 S. Ct. 120 (1980).
12
Section 714m(a) prohibits the making of false statements for
the purpose of influencing the Commodity Credit Corporation.
14
promises as to the future a criminal offense . . ., it
would have made express provision therefore as it did in
18 U.S.C. § 1341 [the mail fraud statute] . . . ." Id.
at 603.
The court rejected this argument and read the statute to cover
"false and fraudulent promises which the maker does not intend to
perform." Id. In terms of frustrating the purpose of the act, the
court could see no practical difference between false statements
and false promises:
"[I]t cannot be supposed that Congress intended to direct
the criminal sanctions of the act only against those who
make false statements of existing fact and to exculpate
those who should obtain surplus commodities by making
false promises which they do not intend to fulfill. In
practical effect, a false promise fraudulently given
amounts to a false statement of an existing intent and it
can be as destructive as the false statement of a
material fact. We think Congress intended to cover it by
the statute." Id. (emphasis added).
In so holding, the court noted that other courts had taken similar
approaches to the Selective Service and Training Act of 1940, the
Home Owners' Loan Corporation Act of 1942, and the False Claims
Act, the statute at issue in this case.13
As the Fourth Circuit recognized in Elmore, there is a series
of cases in which this Court has upheld convictions for making
false promises in violation of section 1001. All these cases
involve applications by veterans for a Home Loan Guaranty, in which
the veterans had to certify that the loans were for the purchase of
13
The court cited Todorow v. United States, 173 F.2d 439 (9th
Cir.), cert. denied, 69 S. Ct. 1169 (1949), in which the defendant
was convicted of falsely promising in an application to purchase
surplus army trucks that the trucks were for his own use and not
for resale. The court did not, however, discuss the distinction
between promises and other statements, but simply held that there
was sufficient circumstantial evidence that the defendant's
representation was false when made.
15
a home. In Corcoran v. United States, 229 F.2d 295, 297 (5th Cir.
1956), for instance, the defendant was charged with causing to be
made a promise to use loan proceeds for the purchase of a home when
the applicant "did not intend to occupy the said property as his
home." The Court upheld the conviction, noting that if the
Veterans Administration had known that the applicant never intended
to so use the funds, the loan would have been rejected. See also
McClanahan v. United States, 230 F.2d 919 (5th Cir.) (upholding the
conviction of an accomplice who caused to be made such statements
of purpose where applicant had no real intent to occupy the
premises), cert. denied, 77 S. Ct. 33 (1956); Russell v. United
States, 222 F.2d 197 (5th Cir. 1955) (same). Although in all of
these cases this Court termed the statement of purpose "false," we
never explicitly discussed a distinction between statements of
existing fact and those of future performance, as the Fourth
Circuit did in Elmore. See also United States v. Elliott, 771 F.2d
1046, 1050 (7th Cir. 1985) (upholding conviction of the defendant-
applicant where defendant claimed he had changed his mind after
filling out the application).
Albeit implicit, this Court's assumption in prior cases that
a promise can be a false statement is supported by the common law
of fraud. Although "[i]t is a general rule that fraud cannot be
predicated upon statements which are promissory in their nature at
the time they are made and which relate to future action or
conduct," 37 Am.Jur. 2d, Fraud and Deceit, § 60, it is also
generally accepted, under common law principles, that
"fraud may be predicated on promises made with a present
16
intention not to perform them or, as the rule is
frequently expressed, on promises made without any
intention of performance . . . . The gist of the fraud
. . . is not the breach of the agreement to perform, but
the fraudulent intent of the promisor, the false
representation of an existing intention to perform where
such intent is in fact nonexistent. . . . The generally
accepted modern theory categorizes a promise which the
promisor does not intend to carry out, as a misstatement
of material and subsisting fact." Id. § 68 (footnotes
omitted).14
Furthermore, "[a] person's statement that he intends to do
something when he has no present intention of doing it is a false
statement of an existing fact, because it falsely represents the
state of his mind, and the state of his mind is a fact." Id. § 64
(footnote omitted). See also Restatement (Second) of Torts §
530(1) ("A representation of the maker's own intention to do or not
to do a particular thing is fraudulent if he does not have that
intention"). This common-law understanding of fraud comports with
the words and purpose of section 1001.
Nevertheless, at oral argument, Shah argued that the terms of
section 1001 should not be read to cover promises. Shah relies on
the principle of expressio unius est exclusio alterius (the
expression of one thing is the exclusion of another), based on the
absence of the word "promises" in section 1001, as compared to its
14
Generally, "there is no inference of fraudulent intent not
to perform from the mere fact that a promise made is subsequently
not performed." Id. (footnote omitted). See also id. § 478;
Restatement (Second) of Torts § 530(1) cmt. d. However, where
the nonperformance is coupled with other probative factors, such
as "where only a short time elapses between the making of the
promise and the refusal to perform it, and there is no change in
the circumstances," an intent not to perform when the promise was
made may, in appropriate circumstances, be properly inferred. 37
Am. Jur. 2d, Fraud and Deceit, § 478 (footnotes omitted).
17
presence in the mail, wire, and bank fraud statutes.15 We reject
this argument for two reasons. First, as mentioned before, a
promise to perform is not only a prediction, but is generally also
a representation of present intent. Promises and representations
are simply not mutually exclusive categories. The plain terms of
the statute can therefore be said to cover representations of
present intent.
Further, the inclusion of the word "promise" in the mail fraud
statute is a "codification" of an old Supreme Court case, in which
the Court held that the absence of the word "promise" in the
statute did not prevent prosecution for making a promise without
any intention of performance. In Durland v. United States, 16
S. Ct. 508 (1896), the defendant was convicted of fraudulently
promising to issue bonds, which amounted to a "scheme or artifice
to defraud" in violation of the statute. The defendant argued
that, under the common law of false pretenses, "fraud . . . must be
the misrepresentation of an existing or past fact, and cannot
consist of the mere intention not to carry out a contract in the
future." Id. at 511. Without delving into common law principles,
the Court rejected this contention, construing the statute to
"includ[e] everything designed to defraud by representations as to
the past or present, or suggestions and promises as to the future."
Id. A promise, the Court concluded, can be as fraudulent as a
statement of present fact if the promisor never intended to
15
These statutes prohibit "any scheme or artifice to defraud,"
as well as schemes for obtaining money or property by "false or
fraudulent pretenses, representations, or promises." 18 U.S.C.
§§ 1341, 1343, 1344.
18
perform. Id. According to the Court,
"If the testimony had shown that . . . the defendant . .
. had entered in good faith upon that business, believing
that out of the moneys received they could, by investment
or otherwise, make enough to justify the promised
returns, no conviction could be sustained, no matter how
visionary might seem the scheme. The charge is that, in
putting forth this scheme, it was not the intent of the
defendant to make an honest effort for its success, but
that he resorted to this form and pretense of a bond
without a thought that he . . . would ever make good its
promises. It was with the purpose of protecting the
public against all such intentional efforts to despoil,
and to prevent the post office from being used to carry
them into effect, that this statute was passed; and it
would strip it of value to confine it to such cases as
disclose an actual misrepresentation as to some existing
fact, and exclude those in which is only the allurement
of a promise. This, which is the principal contention of
counsel, must be overruled." Id.
The Supreme Court has recently recognized that the congressional
inclusion of the word "promise" in the mail fraud statute is, in a
sense, a redundancy, a "codification" of existing case law.
McNally v. United States, 107 S. Ct. 2875, 2880-81 (1987).
For the foregoing reasons, we reject Shah's contention that a
"promise to perform" cannot, as a matter of law, ever violate
section 1001. We hold that, under section 1001, a promise may
amount to a "false, fictitious or fraudulent" statement if it is
made without any present intention of performance and under
circumstances such that it plainly, albeit implicitly, represents
the present existence of an intent to perform.16
16
Shah contends the trial court erred in refusing the
following instruction:
"You are instructed that you cannot convict unless
the facts that you find to be false beyond a reasonable
doubt occurred before the making of the statement
containing those facts, and, further, that the
defendant knew that the facts were false."
19
In the present setting, it is clear that the statement or
promise implicitly represents Shah's present intent. We now
determine whether the government proved falsity in this case. Shah
claims, in his first evidentiary point, that the evidence was
inadequate to support the necessary premise that Shah had no
intention of carrying out the promise when he made it. We view the
evidence in the light most favorable to the jury verdict and will
affirm if a rational trier of fact could find that the government
proved all essential elements of the crime beyond a reasonable
doubt. United States v. Mackay, 33 F.3d 489, 493 (5th Cir. 1994).
As mentioned earlier, whether a defendant intended to perform is a
question of fact concerning the defendant's state of mind. The
mere fact of subsequent nonperformance is not alone sufficient for
conviction. See note 14, supra. Although the call is a close one,
we cannot say that the circumstantial evidence in this case was
insufficient to justify the verdict. Courts have routinely relied
on circumstantial evidence to support such false-promise
determinations. See Corcoran, 229 F.2d at 297; Elliott, 771 F.2d
at 1050; Mandanici, 729 F.2d at 920; Todorow, 173 F.2d at 443-44.
Because this proposed instruction at best confusingly states the
law, the district court was right to refuse it. United States v.
Linn, 889 F.2d 1369, 1371-72 (5th Cir. 1989), cert. denied, 111
S. Ct. 43 (1990). The relevant facts must be false when the
statement is made, not before or after that time. Furthermore,
to the extent the proposed instruction was based on the
assumption that a promise cannot be false, it was mistaken and
confusing. The district court correctly charged the jury that it
must find that "the defendant made the statement intentionally
knowing that it was false" in order to convict Shah. The court
went on, "A statement is false if it was untrue when made and
then known to be untrue by the person making it." This
instruction represents a correct and adequate statement of the
law.
20
See also note 14, supra.
At the end of the first conversation, Kipper was "non-
committal," and Shah left his telephone number. From these facts,
a jury could infer that the matter was not abandoned, but was
rather left open. That Shah submitted his bid before actually
exchanging the information does not invalidate this inference.
When he submitted his offer, Shah was aware that the bids could be
changed up until the contract award. Indeed, he stated as much in
his initial exchanges with Kipper during their first monitored
conversation on July 15. Further, although Shah did not reinitiate
further contact after their conversation on July 7, when Kipper
called a few days after the submission of the bids, Shah was
immediately receptive to his earlier suggestion and wasted no time
arranging an exchange of bid information. During this
conversation, which occurred so shortly after Shah's July 8
statement, Shah neither expressed surprise at Kipper's broaching
the subject nor treated it as an about-face. Shah certainly
intended to exchange price information on July 7 and July 15; under
the evidence, the jury could infer that he had the same intention
on July 8. In short, the evidence introduced at trial as to events
both before and after the submission of Shah's offer supports the
jury's verdict.
Shah also claims that the government failed to prove that the
Nitin Shah who submitted the bid and exchanged the price
information was the Nitin Shah who was arrested. This contention
is without merit. Given that the GSA agent who arrested Shah
testified that he found Shah at the address listed on the bid as
21
that of Omega Electronics and that the Nitin Shah arrested was the
only Nitin Shah living at that address, the only logical
interpretation of the evidence at trial was that the Shah who was
arrested was the one who committed the crime. There was nothing
whatever to suggest the contrary. The government need not make a
case for identity air-tight; identity may be inferred
circumstantially, and the ample circumstantial evidence in this
case pointed in only one directionSQtoward the defendant. See
United States v. Royals, 777 F.2d 1089, 1091 (5th Cir. 1985).
We must likewise reject Shah's final evidentiary claim: that
the government failed to prove that Shah actually read the
certification and thus made his statement "knowingly." As a party
to prior supply contracts with GSA, Shah was not new to the bidding
process or to the GSA's forms. Further, Shah filled in information
both below and above section 13, the section at issue. Shah
supplied requested information in over sixty separate locations
throughout the solicitation, including his signature in four
places. Finally, Shah's request for confidentiality suggests that
he knew of the certification. Nothing suggests that he did not.
A jury could infer beyond a reasonable doubt that Shah read and
understood what he signed and submitted. See Puente, 982 F.2d at
159; see also United States v. Munna, 871 F.2d 515, 517 (5th Cir.
1989), cert. denied, 110 S. Ct. 871 (1990).
Finally, we find no support for Shah's contention that there
was an impermissible variance between the indictment and the proof
at trial. The basis for this claim is the omission in the
indictment of the two parenthetical phrases contained in the actual
22
statement in the solicitation: that prices will not be disclosed
before bid opening "(in the case of a sealed bid solicitation)" or
contract award "(in the case of a negotiated solicitation)."17 Shah
claims that, by omitting this parenthetical language, the
government relieved itself of the obligation of proving what bid
arrangement was at issue and whether there had been a contract
award or bid opening at the time the statement was made. However,
to constitute reversible error, there must be not only a variance,
but a material one. United States v. Moree, 897 F.2d 1329, 1334
(5th Cir. 1994) ("A mere variance in language between proof and the
explicit language of the indictment which does not constitute the
modification of an essential element of the offense charged is not
error."). It is not essential that the government, in the
indictment, set up verbatim the factual bases for its allegation of
falsity, so long as the facts to be proved are implicit in the
allegation. Id.
To be material, the variance must "prejudice[] the defendant's
'substantial rights,' either by surprising the defendant at trial
or by placing the defendant at risk of double jeopardy." United
States v. Robinson, 974 F.2d 575, 578 (5th Cir. 1992). Here, the
17
The indictment describes the relevant false statement as
follows: "[t]he prices in this offer have not been and will not
be knowingly disclosed by the offeror, directly or indirectly, to
any other offeror or competitor before bid opening or contract
award unless otherwise required by law." The statement contained
in the solicitation, which was admitted in evidence at trial,
reads as follows: "The prices in this offer have not been and
will not be knowingly disclosed by the offeror, directly or
indirectly, to any other offeror or competitor before bid opening
(in the case of a sealed bid solicitation) or contract award (in
the case of a negotiated solicitation) unless otherwise required
by law."
23
variance is immaterial because it did "not impair the defendant's
ability to defend himself through failing to identify the nature of
the charge." Id. (citation and quotation marks omitted). Because
Shah was at all times fully aware what provision of the bid was the
basis for the indictment, he cannot credibly claim surprise.
United States v. Arlt, 567 F.2d 1295, 1298 (5th Cir.) (finding no
prejudice where the indictment incorrectly identified the form upon
which defendant allegedly made a false statement because defendant
was in any event aware what statement in the actual form the
government was relying on), cert. denied, 98 S. Ct. 2250 (1978).
Because Shah has failed to show that the variance was material, we
reject this final contention.
Conclusion
For the foregoing reasons, the judgment of the district court
is
AFFIRMED.
24