UNITED STATES OF AMERICA, PETITIONER V. ESMAIL YERMIAN

   No. 83-346

   In the Supreme Court of the United States

   October Term, 1983

   The Solicitor General, on behalf of the United States, petitions
for a writ of certiorari to review the judgement of the United States
Court of Appeals for the Ninth Circuit in this case.

   Petition for a Writ of Certiorari to the United States Court of
Appeals for the Ninth Circuit

            TABLE OF CONTENTS
   Opinion below
   Jurisdiction
   Statute involved
   Statement
   Reasons for granting the petition
   Conclusion
   Appendix A
   Appendix B

                             OPINION BELOW

   The opinion of the court of appeals (App. A, infra, 1a-15a) is
reported at 708 F.2d 365.

                             JURISDICTION

   The judgment of the court of appeals was entered on April 19, 1983.
 A timely petition for rehearing was denied on July 5, 1983 (App. B,
infra, 16a).  The jurisdiction of this Court is invoked under 28
U.S.C. 1254(1).

                           STATUTE INVOLVED

   18 U.S.C. 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.

                          QUESTION PRESENTED

   Whether, in a prosecution for the making of a false statement in
violation of 18 U.S.C. 1001, the government must prove that the
defendant knew that the statement was made "in (a) matter within the
jurisdiction of (a) department or agency of the United States."

                               STATEMENT

   Following a jury trial in the United States District Court for the
Central District of California, respondent was convicted on three
counts of making a false statement in a matter within the jurisdiction
of a federal agency, in violation of 18 U.S.C. 1001.  He was sentenced
to concurrent terms of five years' imprisonment on each count, the
first six months to be served and the balance suspended in favor of a
term of five years' probation.  The court of appeals reversed (App. A,
infra, 1a-15a).

   1. The evidence at trial showed (see App. A, infra, 2a) that in
1979 respondent was hired as an engineer by Gulton Industries, a
defense contractor.  Respondent was required to obtain a Department of
Defense security clearance, since he was to have access to classified
material in the course of his employment.  Gulton's security officer
therefore asked respondent to fill out a "Department of Defense Work
Sheet for Preparation of Personnel Security Questionnaire" (ibid.; Tr.
46-48).

   In response to a question on the work sheet asking whether he had
ever been charged with any violation of law, respondent failed to
disclose that in 1978 he had been convicted of mail fraud, in
violation of 18 U.S.C. 1341.  In describing his employment history,
respondent falsely stated that he had been employed by Bell
Helicopter, International, of Houston, Texas, and Square D Corporation
of Los Angeles, California (Tr. 47-49, 54-55, 61-62, GX 1, 6).  The
Gulton security officer typed the information provided by respondent
onto another document captioned "Department of Defense Personnel
Security Questionnaire." Respondent reviewed that document for errors
and signed a certification stating that his "answers (were) true,
complete, and correct to the best of (his) knowledge and belief, and
(were) made in good faith" and that he knew "that any
misrepresentation or false statement * * * may subject (him) to
prosecution under Section 1001 of the United States Criminal Code * *
*" (GX 3, at 5).  The form respondent signed bore the following
warning directly above the signature block (Tr. 50-52;  GX 3, at 5):

      NOTE:  PENALTY FOR MISREPRESENTATION -- Failure to answer all
      questions, or any misrepresentation (by omission or concealment,
      or by misleading, false, or partial answers) may serve as a
      basis for denial of clearance for access to classified
      Department of Defense information.  In addition, Title 18,
      United States Code 1001, makes it a criminal offense, punishable
      by a maximum of 5 years imprisonment, $10,000 fine, or both,
      knowingly and willfully to make a false statement or
      representation to any Department or Agency of the United States
      as to any matter within the jurisdiction of any Department or
      Agency of the United States.

         This includes any statement knowingly and willfully made by
      employer or employee herein which is knowingly incorrect,
      incomplete or misleading in any important particular * * *.

   After witnessing respondent's signature, the Gulton security
officer mailed the completed form to the Defense Industrial Security
Clearance Office for processing (Tr. 51-52).  Government investigators
subsequently discovered that the information respondent had furnished
was false, and he was denied a security clearance.  When told of the
discovery, respondent acknowledged that the information he had
provided was false (App. A, infra, 2a;  Tr. 68).

   At trial, respondent testified that he had responded falsely to
questions on the security questionnaire concerning his criminal record
and employment history (Tr. 58-60).  He explained that he had made the
false statements so that the information on the security questionnaire
would be consistent with similar fabrications he had included on his
employment application (Tr. 62).  Respondent testified that he
believed the information on the form would be used by Gulton only for
classification of its employees and that he was unaware that the
information was to be transmitted to the Department of Defense or to
any other government agency (Tr. 62-63).  /1/ Respondent asserted that
he had not read the form carefully when he signed it and thus did not
notice either the words "Department of Defense" on the first page or
the warning printed above the signature block (Tr. 65-66).

   Prior to trial, respondent submitted a proposed jury instruction
stating, inter alia, that a statement is fraudulent "if known to be
untrue, and made or caused to be made with the intent to deceive the
Government agency to whom submitted" (E.R. 7).  /2/ The trial court
rejected that proposal and instead instructed the jury that the intent
element of Section 1001 requires a finding that petitioner "did * * *
(the) act or acts (charged) with knowledge * * * that the writing or
document was false or fictitious" and that he "knew or should have
known that the information was to be submitted to a government agency"
(Tr. 109).  Respondent objected to the instruction, contending that
only actual knowledge that a statement is being made to an agency of
the United States satisfies the intent element of Section 1001 (Tr.
84, 115).

   On appeal, respondent again did not dispute that he had made false
statements on the security questionnaire, but claimed only that he did
not know the questionnaire would be sent to the government for
purposes of a security clearance.  Respondent contended that the trial
court erred in failing to instruct the jury that it was required to
find that he had actual knowledge that the statements were made in a
matter within the jurisdiction of a federal agency (App. A, infra,
3a).

   2. The court of appeals reversed (App. A, infra, 1a-15a).  The
court held that in a prosecution under Section 1001 the government
must prove beyond a reasonable doubt that the defendant knew at the
time he made the false statement that it was made in a matter within
the jurisdiction of a federal agency.  The court recognized (App. A,
infra, 5a-6a) that its holding conflicts with decisions of the Fifth,
Sixth and Seventh Circuits.  /3/ In addition, it acknowledged that its
construction of the intent requirement of Section 1001 is not mandated
by the language of the statute, which it characterized as "ambiguous"
(App. A, infra, 6a).  /4/ However, the court concluded that the
legislative history of Section 1001 and its predecessors, although
"not entirely conclusive" (App. A, infra, 7a), suggests that Congress
intended that knowledge of the facts giving rise to federal
jurisdiction be an element of the offense.

   The court observed (App. A, infra, 8a) that an earlier version of
Section 1001 expressly required proof of an intent to defraud the
government.  In 1934 Congress removed the reference to intent to
defraud and added the requirement that a statement be made in a matter
within the jurisdiction of a federal agency.  The court cited various
statements made during congressional consideration of the 1934
amendment, in which legislators suggested examples of false statements
that would be covered by the amendment (App. A, infra, 10a-12a).
Although the court acknowledged that many of the legislators' comments
addressed versions of the legislation that ultimately were not
enacted, it concluded that the comments nonetheless indicated that the
legislators believed the 1934 amendment would cover cases in which the
maker of a statement would have known that it was made in a matter
within the jurisdiction of a federal agency (id. at 12a).  /5/ The
court concluded on the basis of this legislative history "that
Congress intended that knowledge of federal involvement be an element
of the crime" and that "the defendant's knowledge of federal
involvement is entirely relevant to the proper effectuation of the
Congressional goals * * *" (id. at 12a-13a).

   The court of appeals rejected the government's alternative argument
that any requirement of knowledge of federal involvement was satisfied
by the objective "should have known" portion of the jury instruction.
In the court's view, the instruction that respondent "knew or should
have known that the information was to be submitted to the government"
was insufficient because it allowed the jury to return a conviction
even if it believed that respondent did not actually know that his
statements were within federal agency jurisdiction.  The court
concluded that under the subjective standard of criminal knowledge
used by the Ninth Circuit the jury was required to find -- beyond a
reasonable doubt -- that respondent had actual knowledge of federal
involvement.  App. A, infra, 14a-15a.

                   REASONS FOR GRANTING THE PETITION

   This case presents an important and recurring question concerning
the elements the government must prove to establish a violation of the
federal false statement statute, 18 U.S.C. 1001.  Section 1001 makes
it a crime "in any matter within the jurisdiction of any department or
agency of the United States knowingly and willfully (to) * * * make()
any false, fictitious or fraudulent statements." The court of appeals
has held that a defendant cannot be convicted under Section 1001
unless the government establishes beyond a reasonable doubt not only
that the defendant's statement was made in a matter within the
jurisdiction of a federal agency and that the defendant knew the
statement was false, but also that the defendant knew of the facts
giving rise to federal jurisdiction.  That unprecedented holding,
which is clearly at odds with the legislative purpose underlying
Section 1001, conflicts with decisions of the three other courts of
appeals that have considered the issue.  If permitted to stand, the
decision will substantially impede the government's ability to
prosecute persons who have made false statements that -- although not
made directly to a federal agency -- have the capacity seriously to
interfere with governmental functions.

   1. The Fifth, Sixth and Seventh Circuits have held that knowledge
that a statement is made in a matter within the jurisdiction of a
federal agency is not an essential element of a violation of Section
1001.  United States v. Baker, 626 F.2d 512 (5th Cir. 1980);  United
States v. Lewis, 587 F.2d 854 (6th Cir. 1978) (per curiam);  United
States v. Stanford, 589 F.2d 285 (7th Cir. 1978), cert. denied, 440
U.S. 983 (1979).  In each of those cases the defendants had submitted
false statements to a state or local agency responsible for
administering a program involving federal funding /6/ and later
claimed not to have been aware of the federal involvement in the
program.  In each case the court of appeals rejected the defendants'
contention that the jury should have been instructed that it was
required to find beyond a reasonable doubt that the defendants knew of
the federal involvement.  /7/

   The three courts of appeals declined to read into Section 1001 an
"unexpressed requirement" that an individual be aware not only that
his statement is false, but also that his fraud is being perpetrated
on the federal government (United States v. Lewis, supra, 587 F.2d at
857, citing United States v. Feola, 420 U.S. 671 (1975)).  The courts
found clear support for their construction of Section 1001 in the
underlying legislative purpose to prevent the perversion of the
authorized functions of federal agencies.  See United States v. Baker,
supra, 626 F.2d at 515-516;  United States v. Stanford, supra, 589
F.2d at 297.  They concluded that requiring proof of actual knowledge
of federal involvement "would give the term (jurisdiction) a narrow
and technical meaning not intended by Congress." Ibid.

   Unlike the Fifth, Sixth and Seventh Circuits, which "declin(ed) to
write any such requirement into the Act" (United States v. Lewis,
supra, 587 F.2d at 857), the court below concluded that knowledge of
the facts giving rise to federal jurisdiction is an essential element
of a violation of Section 1001 and that the prosecution therefore must
establish such knowledge beyond a reasonable doubt.  Unless this
conflict in the circuits is resolved, there will be a serious adverse
effect on the government's ability to protect federally-sponsored
programs and other governmental functions from fraud.

   The holding of the court below will affect a broad range of false
statement prosecutions.  Much information that is not transmitted
directly to the federal government nevertheless is capable of
affecting federal functions because it ultimately is transmitted to a
federal agency or otherwise used in connection with a federal program.
 /8/ For example, many federal benefit programs, including those
relating to public welfare, medical care, employment training, and low
income housing, are administered primarily through state, local, or
private agencies.  Beneficiaries of such programs normally do not
submit applications or other information directly to the federal
government;  rather, they deal with intermediary agencies.  /9/
Subcontractors on government contracts normally submit to the prime
contractor statements concerning prices, costs, and performance
standards, /10/ while sellers of a commodity subject to a government
pricing program may provide certifications to purchasers.  /11/ As in
this case, private defense contractors obtain information from their
employees and forward it to the federal government, which conducts
security investigations.  In each of these situations, false
statements have the capacity to interfere seriously with the integrity
of a federal program:  they can induce the payment of federal funds
not authorized by statute, or the granting of a security clearance to
an individual who should not have access to sensitive defense
information.  As the courts of appeals have noted, /12/ these adverse
effects on federal functions can occur whether or not the person
making the false statement can be shown to have been aware of the
facts supporting federal jurisdiction.

   The decision below will make it impossible to obtain convictions
under Section 1001 in many cases.  Awareness of federal involvement is
often peculiarly within the knowledge of the defendant;  when a false
statement is not submitted directly to a federal agency, such
awareness cannot be inferred simply from the making of the statement.
Even in a case like this one, in which the form gives clear notice
that statements will be submitted to a federal agency, the government
may be unable to rebut the defendant's assertion that he did not see
the notice.  Here the form was captioned "Department of Defense
Personnel Security Questionnaire," and a large warning over
respondent's signature explained that false statements could result in
prosecution under Section 1001.  Nevertheless, the government was
unable to present direct evidence to refute respondent's testimony
that he failed to notice either the caption or the warning.  The court
below compounded the difficulties of proof by holding that the
government would not be permitted to satisfy its burden of proof by
showing that under the particular circumstances a reasonable person
should have known that a statement fell within the jurisdiction of a
federal agency;  instead the government must establish subjective
knowledge of federal involvement.  In many cases, such proof will be
impossible, even though the potential for harm to federal functions is
clear.

   2. The holding of the court below that knowledge of federal
involvement is an essential element of a violation of Section 1001 is
at odds with Congress's purpose:  protecting federal functions and
funds from fraud.  As the Court explained in United States v.
Gilliland, 312 U.S. 86, 93 (1941), the statute, as amended in 1934,
"indicated the congressional intent to protect the authorized
functions of governmental departments and agencies from the perversion
which might result from the deceptive practices described." In view of
the broad legislative purpose, the Court has concluded that Section
1001 is to be read expansively.  See United States v. Bramblett, 348
U.S. 503, 507 (1955) ("(t)here is no indication in either the
committee reports or in the congressional debates that the scope of
the statute was to be in any restricted").  The decision below
subverts the broad legislative objective by effectively immunizing a
broad category of false statements that are not made directly to a
federal agency but that can nevertheless cause serious harm to federal
functions.  Congress could not have intended such a result.

   The conclusion of the court below that the reference to federal
involvement in Section 1001 is not simply a jurisdictional
requirement, but also part of the scienter requirement of the statute,
is inconsistent with the reasoning of this Court in United States v.
Feola, supra.  In Feola the Court held that knowledge of facts giving
rise to federal jurisdiction is not an essential element of a
violation of the federal assault statute, 18 U.S.C. 111.  The Court
looked to the purposes of the statute in concluding that "(a)ll the
statute requires is an intent to assault, not an intent to assault a
federal officer." 420 U.S. at 684.  The legislative purpose underlying
Section 1001 similarly indicates that the statute requires only the
intent to deceive, not the intent to deceive the federal government.
As in Feola, construction of the statute not to require knowledge of
jurisdictional facts does not create any risk of unfairness to
defendants, because the conduct at issue is wrongful regardless of the
identity of the target.  See 420 U.S. at 685.  /13/

   Nothing in either the language or the legislative history of
Section 1001 indicates that Congress meant to require that the
government establish beyond a reasonable doubt that a defendant had
knowledge of the facts that give rise to federal jurisdiction.  /14/
The court of appeals' unprecedented expansion of the government's
burden of proof in Section 1001 cases will seriously interfere with
the government's ability to protect its funds and functions from
fraud.  In view of the conflict among the circuits created by the
decision below, review by this Court is warranted.

                              CONCLUSION

   The petition for a writ of certiorari should be granted.

   Respectfully submitted.

   REX E. LEE

      Solicitor General

   STEPHEN S. TROTT

      Assitant Attorney General

   PAUL M. BATOR

      Deputy Solicitor General

   CAROLYN F. CORWIN

      Assistant to the Solicitor General

   JOHN F. DE PUE

      Attorney

   AUGUST 1983

   /1/ Respondent testified that he did not believe Gulton "would have
either the resources or the inclination" to verify the data he had
furnished (Tr. 69).

   /2/ "E.R." signifies the excerpt of record filed in the court of
appeals.

   /3/ United States v. Baker, 626 F.2d 512, 516 (5th Cir. 1980);
United States v. Stanford, 589 F.2d 285, 297 (7th Cir. 1978), cert.
denied, 440 U.S. 983 (1979);  United States v. Lewis, 587 F.2d 854,
857 (6th Cir. 1978) (per curiam).  The court observed (App. A, infra,
4a-5a) that in other cases courts have assumed, without deciding, that
knowledge of federal involvement is an element of a violation of
Section 1001, citing United States v. Cella, 568 F.2d 1266, 1288 (9th
Cir. 1977);  United States v. Candella, 487 F.2d 1223, 1226-1227 (2d
Cir. 1973), cert. denied, 415 U.S. 977 (1974);  and Ebeling v. United
States, 248 F.2d 429, 434-435 (8th Cir.), cert. denied, 355 U.S. 907
(1957).

   /4/ The court of appeals believed (App. A, infra, 6a-7a) that the
placement and punctuation of the terms "knowingly and willfully" do
not indicate whether those terms modify only the phrase "makes any
false, fictitious, or fraudulent statements" or the broader phrase "in
any matter within the jurisdiction of any department or agency of the
United States * * * makes any false, fictitious, or fraudulent
statements."

   /5/ In particular, the court pointed to Congress's concern with the
presentation to the Department of the Interior of false papers
concerning "hot oil" and with the use of false wage certificates
submitted for payment to the Public Works Administration (App. A,
infra, 12a).

   /6/ In Baker the defendants submitted false time sheets to a local
housing authority, which in turn submitted the information to the
Department of Housing and Urban Development in connection with the
documentation of expenditures of federal grant funds.  In Lewis and
Stanford the defendants applied through state agencies to receive
benefits under the Aid to Families With Dependent Children and food
stamp programs.

   /7/ In some Section 1001 cases, courts have noted that the evidence
indicated that a defendant knew of federal involvement.  However,
these cases do not hold squarely that such knowledge is an essential
element of the violation.  See, e.g., United States v. Cella, 568 F.2d
1266, 1288 (9th Cir. 1977);  United States v. Lange, 528 F.2d 1280,
1287 n.11 (5th Cir. 1976);  United States v. Candella, 487 F.2d 1223,
1226-1227 (2d Cir. 1973), cert. denied, 415 U.S. 977 (1974);  Ebeling
v. United States, 248 F.2d 429, 434-435 (8th Cir.), cert. denied, 355
U.S. 907 (1957).

   /8/ It is well established that statements may be made in a matter
within the jurisdiction of the United States for purposes of Section
1001, even if they are not made directly to the federal government.
See, e.g., United States v. Hooper, 596 F.2d 219, 222-223 (7th Cir.
1979);  United States v. Candella, supra, 487 F.2d at 1227;  United
States v. Matanky, 483 F.2d 1319, 1322 (9th Cir.), cert. denied, 414
U.S. 1039 (1973);  United States v. Waters, 457 F.2d 805 (3d Cir.
1972) (per curiam).

   /9/ See, e.g., United States v. Baker, supra (public housing);
United States v. Stanford, supra (welfare benefits);  United States v.
Matanky, supra (medical benefits).

   /10/ See, e.g., Ebeling v. United States, supra;  32 C.F.R. XXIII
(subcontracting policies and procedures).

   /11/ See United States v. Wolf, 645 F.2d 23 (10th Cir. 1981).

   /12/ See United States v. Baker, supra, 626 F.2d at 516;  United
States v. Stanford, supra, 589 F.2d at 297-298.  As the court stated
in Baker, supra, 626 F.2d at 516:

         18 U.S.C. Section 1001 is designed to protect federal funds
      and functions from fraudulent interference.  In furthering these
      purposes, it is irrelevant whether defendant knew that his
      intentionally false statements might eventually influence a
      federal agency.

   /13/ The court of appeals suggested in a footnote (App. A, infra,
14a n.14) that Feola could be distinguished from this case on the
ground that committing an assault is a crime in every state, even
apart from the federal statute.  However, the same can be said of the
making of a false statement.  See, e.g., Cal. Penal Code Section 532
(West 1970) (false pretenses);  id. Section 484 (theft).  In any
event, making of a false statement punishable under Section 1001 is
malum in se;  thus, there is no danger that an unsuspecting defendant
will be unfairly surprised if his conduct turns out to be a violation
of a federal statute.

   See also United States v. Bankston, 603 F.2d 528, 532 (5th Cir.
1979) (knowledge of interstate transportation is not an element of a
violation of 18 U.S.C. 1201);  United States v. Hobson, 519 F.2d 765,
769-770 (9th Cir.), cert. denied, 423 U.S. 931 (1975) (knowledge by an
accessory after the fact that a federal offense has been committed is
not required under 18 U.S.C. 3);  United States v. Howey, 427 F.2d
1017, 1018 (9th Cir. 1970) (knowledge that property taken belongs to
the United States is not an element of the offense under 18 U.S.C.
641).

   /14/ The legislative history cited by the court of appeals (App. A,
infra, 8a-12a) consists primarily of scattered comments by legislators
about versions of the 1934 amendment to Section 1001 that never became
law and that were considerably more restrictive than the amendment
that eventually was enacted.  Moreover, the fact that the legislators
referred primarily to types of false statements that normally would be
made with knowledge of federal involvement does not suggest that
Congress intended to confine the reach of Section 1001 to those
particular categories of false statements.  The court of appeals
itself characterized the legislative history as "not entirely
conclusive" (id. at 7a).  In view of Congress's broad purposes in
enacting the 1934 amendments, the court's restrictive reading of the
legislative history appears to be clearly incorrect.

   Appendix Omitted