Unpublished Disposition, 851 F.2d 361 (9th Cir. 1986)Annotate this Case
UNITED STATES of America, Plaintiff-Appellee,v.John G. BRYCE, Defendant-Appellant.
United States Court of Appeals, Ninth Circuit.
Submitted May 19, 1988.* Decided June 28, 1988.
Before NELSON, NOONAN and LEAVY, Circuit Judges.
John G. Bryce appeals from his conviction for making a material false statement concerning his employment status in a matter within the jurisdiction of the Social Security Administration, in violation of 18 U.S.C. § 1001. He contends that there was insufficient evidence to support the district court's finding of guilt. We affirm.
On November 13, 1986, John G. Bryce was indicted for making a false statement of material fact concerning his employment status in a matter within the jurisdiction of the Social Security Administration, in violation of 18 U.S.C. § 1001. Bryce waived his right to a jury trial, and a bench trial was held in February 1987.
At the trial, the following evidence was presented: Bryce began receiving social security disability benefits in 1976 following heart surgery, and he continued to receive benefits until May 1985. The Social Security Administration also provided, based upon Bryce's disability, additional social security benefits to other family members. A primary eligibility requirement for the continued receipt of disability benefits is that an individual be unable to perform substantial and gainful work activity. In determining the status of recipients, the Social Security Administration "depends very heavily" on information provided by the recipients.
On December 16, 1981, Lynn Anderson, a claims representative with the Social Security Administration, interviewed Bryce. During that interview, Bryce stated that: (1) he had not actually worked since becoming disabled; (2) he was not connected with Bryce's Shoe Stores at all; (3) his only ownership connection with Bryce's Shoe Stores was that he was married to the co-owner and his brother was the other owner; (4) his connection with the shoe stores was that he "may vacuum the store and take out the garbage and clean up at closing time"; (5) his wife did all the buying for Bryce's Shoe Stores. Anderson reduced Bryce's statements to a written document which Bryce read and signed.
The government presented numerous witnesses who testified to Bryce's activities in the shoe stores, including two witnesses who had negotiated exclusively with Bryce in selling their shoe businesses to him; witnesses who had observed Bryce frequently in the stores "working, selling shoes"; an employee who testified that Bryce worked six days a week in the store, that Bryce's brother and son were subject to Bryce's direction when they were in the store, and that Bryce "did everything there was to do in a shoe store"; another employee who described Bryce as an "workaholic"; three shoe sales representatives from major shoe companies who testified that they received shoe orders exclusively from Bryce at all of his four stores and understood him to be the owner; and two local bankers who testified that they dealt primarily with Bryce regarding financing applications for the various shoe stores.
Other testimony regarding Bryce's activities at the shoe stores included testimony from a customer who purchased shoes from Bryce in November 1980; a newspaper publisher who testified that Bryce dealt directly with him in placing ads for his stores in the local newspapers; the manager of a shopping mall who negotiated a lease with Bryce for a shoe store in 1980 or 1981; and a producer of retail store fixtures who sold Bryce fixtures for the shoe stores.
The defense presented other evidence at the trial to support Bryce's contention that he did not work in the shoe stores, including Bryce's son, brother, and wife, who all testified that Bryce did not own the stores or work actively at the stores, and a manager of one of the shoe stores, who stated that Bryce was in the stores infrequently, occasionally giving advice.
The district court found Bryce guilty of the charged offense, stating that Bryce's assertions that he did nothing " 'but take out the garbage' ... were patently untrue." Bryce timely appeals.
Bryce contends that the evidence was not sufficient to support a finding of guilt. This court reviews a challenge to the sufficiency of the evidence to determine whether, viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of a crime beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 318-19 (1979); United States v. Hale, 784 F.2d 1465, 1470 (9th Cir.), cert. denied, --- U.S. ----, 107 S. Ct. 110 (1986). Section 1001 prohibits the making of material false representations to a government agency regarding a matter within the agency's jurisdiction. 18 U.S.C. § 1001; United States v. Vaughn, 797 F.2d 1485, 1490 (9th Cir. 1986). The statement must be made intentionally and with the knowledge that it is false, but the defendant need not know of the agency's jurisdiction and he need not intend to deceive. Vaughn, 797 F.2d at 1490.
Here, the evidence was sufficient to support a finding that Bryce knowingly made a false statement punishable under 18 U.S.C. § 1001. Bryce reported to the Social Security claims representative that he was "not connected with the Bryce's Shoe Stores at all." The evidence showed, however, that Bryce was directly and actively involved in virtually every aspect of the business. He negotiated for and purchased other shoe stores, dealt directly with loan officers in obtaining financing for the stores, placed orders with shoe company representatives, supervised employees, worked actively in the stores selling shoes to customers, and was described as a "workaholic" by a former employee. Although Bryce presented some testimony contradicting the government's evidence, determinations of credibility are properly left to the district court. See United States v. McConney, 728 F.2d 1195, 1200-01 (9th Cir.) (en banc) (credibility of witnesses is a factual determination reviewed under the deferential, clearly erroneous standard), cert. denied, 469 U.S. 824 (1984); see also United States v. Green, 745 F.2d 1205, 1208 (9th Cir. 1984) (verdict supported by sufficient evidence upheld although there was some evidence which could have supported defendant's version of the facts), cert. denied, 474 U.S. 925 (1985).
Bryce further argues that the inability of the "average layman" to understand the Social Security regulations diminished the government's ability to prove the materiality of Bryce's statements. The government, however, presented uncontradicted evidence that Bryce's statements were material to the Social Security Administration's determination of eligibility for benefits and the status of benefit recipients. See Vaughn, 797 F.2d at 1490 (a statement is considered material under 18 U.S.C. § 1001 if it has the propensity to influence agency action; actual influence on agency action is not an element of the crime).1 Bryce's false statement that he did not work at the shoe stores did not result from an inability to understand Social Security regulations but from his responses to simple questions addressed to him by a Social Security claims representative about his work activity. Thus, the materiality of his statements was not affected by any alleged misunderstanding of the provisions of Social Security regulations.
Bryce also argues that the district court should not have considered the evidence of his statement concerning Marilyn Sharp.2 Bryce contends that the Sharp statement falls within the "exculpatory no" exception to the application of 18 U.S.C. § 1001. However, because Bryce did not object to the admission of this evidence at trial, this court may not reverse on this issue absent plain error. See United States v. Sims, 617 F.2d 1371, 1377 (9th Cir. 1980) (absent plain error, a conviction will not be reversed on evidentiary grounds not revealed to the trial court at the time of the assertedly erroneous ruling). Further, the "exculpatory no" exception does not apply to statements that are related to a claim to a privilege from the United States or that may potentially impair the function of a United States agency. See United States v. Medina de Perez, 799 F.2d 540, 544 n. 5 (9th Cir. 1986); United States v. Carrier, 654 F.2d 559, 561 (9th Cir. 1981). Here, Bryce's statement regarding Marilyn Sharp was related to his own claim to Social Security benefits because he was aware that the claims representative was also seeking information regarding his status, and the statement also potentially impaired the function of the Social Security Administration in its administration of both Sharp's and Bryce's benefits. Further, Bryce does not object to the admission of his separate statement regarding his own work activities, in which he asserted that he was "not connected with the Bryce's Shoe Stores at all." Therefore, the exclusion of his statement regarding Marilyn Sharp would not affect his conviction for his other false assertions. See, e.g., United States v. Talley, 790 F.2d 1468, 1470 (9th Cir.) (any nonconstitutional error in admission of evidence is harmless where the fact finder more probably than not would have reached the same conclusion absent the erroneous ruling), cert. denied, --- U.S. ----, 107 S. Ct. 224 (1986).
Bryce further argues that the government failed to prove that he was required to report these facts to the Social Security Administration. However, to support a conviction under 18 U.S.C. § 1001, the government is not required to prove that the falsification concerned a matter which another statute or a regulation requires the defendant to provide. See United States v. Olson, 751 F.2d 1126, 1127-28 (9th Cir. 1985).
Finally, Bryce argues that his activities at the shoe stores were not "substantial gainful activity" within the meaning of the Social Security regulations because he did not receive any monetary remuneration from the stores for his activities there, and therefore that his statement that he did not work at the stores was not false. However, where a disability recipient is self-employed, the determination of whether he is engaged in "substantial gainful activity" does not depend upon whether he receives remuneration. See 20 C.F.R. Sec. 416.975(a) (Social Security Administration "will evaluate your work activity on the value to the business of your services regardless of whether you receive an immediate income for your services"). Further, Bryce not only stated to the claims representative that he did not work at the stores, but that he was not connected to the shoe stores at all, and that his connection to the stores was that "he may vacuum the store and take out the garbage and cleanup at closing time." The evidence supports the district court's finding that these assertions were false, independent of any possible misunderstanding Bryce may have had about the definition of "work" under the Social Security regulations. Thus, the evidence was sufficient to support Bryce's conviction under 18 U.S.C. § 1001. See Hale,, 785 F.2d at 1470.
The panel unanimously finds this case suitable for disposition without oral argument. Fed. R. App. P. 34(a); 9th Cir.R. 34-4
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Circuit R. 36-3
Bryce additionally argues that the government failed to prove that all of the assertions forming the basis for the indictment were material to the questions before the Social Security Administration. Specifically, he claims that his assertions that his only ownership connection with the shoe stores was that his wife and brother were the co-owners were not material to the determination of his eligibility for benefits. However, his assertions were material to the nature and extent of his self-employment and satisfy the Vaughn test for materiality. Further, Bryce does not argue that the government failed to prove the materiality of his remaining false assertions concerning his work activity, which independently support his conviction
The Social Security claims representative had arranged the interview with Bryce to discuss the work activity of Marilyn Sharp, a bookkeeper for the shoe stores who was receiving disability benefits, as well as Bryce's own work activity. During questioning on the extent of Sharp's activities Bryce stated that he was "not involved in the operation of the stores." The claims representative then took a full statement from Bryce regarding his own work activity and employment status