UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
decided: October 10, 1973.
UNITED STATES OF AMERICA, APPELLEE,
STEPHEN MANCUSO, DEFENDANT-APPELLANT
Appeal from a judgment of conviction for knowingly making false material declarations in violation of 18 U.S.C. § 1623, entered in the United States District Court for the Western District of New York, after trial before John T. Curtin, Judge, and a jury.
Kaufman, Chief Judge, Moore and Mansfield, Circuit Judges.
KAUFMAN, Chief Judge:
It is in the nature of a perjury case that there be conflicting versions of the underlying facts -- one version, constituting the claimed perjury, having been asserted by the accused at a prior proceeding, and the other being put forth by prosecution witnesses at trial. We are met in this appeal with an unusual case in which three versions have appeared, with the appellant having maintained essentially the same position at both proceedings, but the Government witness having himself given two conflicting stories at trial.
Mancuso appeals his conviction following a jury trial, on two counts of a three-count indictment brought under 18 U.S.C. 1623.*fn1 Three portions of his testimony, given on May 23, 1972, before a United States grand jury empaneled in the Western District of New York, were alleged to be perjurious. The jury acquitted on Count One. On Counts Two and Three Judge Curtin imposed concurrent terms of imprisonment of 18 months, with two months to be served in a jail-type institution, the balance suspended, and probation for two years.*fn2 Although Mancuso mounts numerous attacks upon these convictions, we deem it necessary to treat only one issue extensively -- whether the testimony embodied in either count satisfied the materiality requirement of the statute.
The grand jury investigation centered on extortion and official corruption involving the construction industry and certain public officials of the City of Batavia, New York. More particularly, the inquiry concerned possible illegalities surrounding a specific construction project performed by the Twin Village Construction Corporation ("Twin Village") for the City of Batavia in the latter half of 1970.
Prior to Mancuso's appearance, the grand jury had heard testimony from Joseph Laraiso.*fn3 The pertinent parts of Laraiso's testimony concerned three matters. He testified that Twin Village had been extorted by Joseph Zito in its ultimately successful attempt to secure a contract awarded by the City for reconstruction of Dewey Avenue,*fn4 and that he rewarded Zito by putting him on the payroll of that project for several weeks, although Zito neither did nor was expected to do any useful work. He stated that soon after the project began, in May or June 1970, an unforeseen problem arose on the site.*fn5 He instructed Mancuso, Twin Village's project supervisor, to offer John Claypool, Batavia's Chief Engineer, a bribe to persuade Claypool to recommend that the contract be modified.*fn6 Finally, he asserted that soon after Claypool refused to alter the contract, Laraiso and Mancuso learned of an incipient City investigation of the attempt to bribe him. Zito offered to "fix" this investigation by bribing certain City Councilmen. Laraiso was agreeable, but needed a method of transmitting funds to Zito for this purpose. Laraiso and Mancuso hit upon the idea of having Laraiso draw a $500 corporate check to Mancuso. Mancuso cashed the check, and gave the proceeds to Zito, but the problem arose of accounting for the check to Mancuso. At a meeting among Mancuso, Joseph Laraiso, and Laraiso's brother Carmen, Mancuso suggested that he would be willing to execute a $500 bill of sale to the corporation for a fictitious sale of a chain saw and surveyor's transit. This procedure was adopted.
After this testimony by Joseph Laraiso, Mancuso was called to appear before the grand jury. He was served with a subpoena at about 6:00 p.m. on May 22, requiring him to appear before the grand jury the following morning. He did so, without having consulted an attorney. The Justice Department prosecutor presenting the case to the grand jury, Robert Ozer, informed Mancuso that the grand jury was investigating possible crimes against the United States, but did not identify the specific nature of the inquiry. He advised Mancuso that he could consult an attorney at any time, and that he need not answer questions which might incriminate him. Mancuso waived his right to confer with counsel, and answered all questions, often elaborating upon his responses extensively. Relying on Laraiso's story, Ozer asked him, inter alia, whether Zito was a bona fide employee during the period he was on the Dewey Avenue payroll (Count One),*fn7 whether Mancuso ever told Laraiso to falsify the Twin Village records to account for a $500 check to Mancuso (Count Two), and whether Mancuso ever learned of a City investigation of the alleged attempt to bribe Claypool (Count Three).
The portion of grand jury testimony embodied in Count Two deals with alleged falsification of corporate records. Ozer asked Mancuso whether he had ever received money other than his paycheck from Laraiso.*fn8 Mancuso freely admitted that on one occasion he had permitted Laraiso to "funnel" a $500 corporate check through him. He stated that he had cashed the check and returned the proceeds to Laraiso. He flatly denied that he had given the money to Zito, and disclaimed knowledge of whether Laraiso had done so.*fn9 Ozer then repeatedly asked Mancuso whether he had told Laraiso to falsify the corporate records to account for this check. Although Mancuso at first denied any memory of the subject, and then displayed some confusion as to the meaning of the question,*fn10 he finally made the statement that "I have had no reason to ever even suggest" such falsification. Count Two charged that it was material to the grand jury to know whether Mancuso suggested falsification of Twin Village's records, and that Mancuso's denial was knowingly false.
At the trial Laraiso repeated the version he had related to the prosecutors and the grand jury. On cross-examination, however, the telling event transpired which lifts this case above the commonplace perjury case. In melodramatic fashion, defense counsel pointedly reminded Laraiso that the alleged attempt to bribe Claypool, which Laraiso claimed had occasioned the need to put money in the hands of Zito, occurred at the beginning of the Dewey Avenue project, in May or June 1970. The check and bill of sale, however, bore the date November 12, 1970, when the job was virtually complete. To everyone's surprise and the Government's dismay, Laraiso suddenly remembered on the witness stand that the story he had told the prosecutors more than a year before, and then repeated both before the grand jury and on direct examination at trial, was totally erroneous.*fn11 He recalled that the transaction in issue had nothing to do with Zito, Dewey Avenue or the City of Batavia at all. He admitted on cross-examination that in November 1970, Twin Village was engaged in the performance of a wholly private construction contract for Litton Industries, in Batavia. This was entirely unrelated to Dewey Avenue, or any other City project. Laraiso then revealed that Andrew Clemons, an individual architect employed by Litton, had helped Twin Village obtain and perform the private contract. Laraiso had decided it would be appropriate to offer Clemons a "gratuity" in appreciation of his assistance, and it was for this purpose that the $500 check to Mancuso and the false bill of sale were intended. Laraiso insisted, however, that as he had originally testified, it was Mancuso who suggested use of the bill of sale to account for the attempted payment to Clemons.*fn12
Carmen Laraiso, testifying for the prosecution, parroted his brother by stating that he too suddenly recalled that the transaction involved the Clemons affair, not the Dewey Avenue project.*fn13 He corroborated his brother's testimony that the bill of sale was Mancuso's suggestion.*fn14
Mancuso testified in his own defense at the trial, and insisted that the documents -- the check and bill of sale -- related to the private architect, not the public contract. He stated his belief that he had not suggested the method of falsifying the corporate records, but could not exclude that possibility.
At the conclusion of the government's case the defense unsuccessfully moved for dismissal of Count Two because the testimony was not material. This motion was renewed at the conclusion of the entire case and again after the verdict. We need not consider Mancuso's claim that the evidence does not support the jury finding of knowing falsity, for we are of the opinion that the trial court erred in failing to dismiss the count for lack of proof of materiality.*fn15
Materiality is an essential element of the statutory offense which the Government has the burden of establishing. United States v. Stone, 429 F.2d 138, 140 (2d Cir. 1970). The Government concedes that whether testimony is material is a question of law to be decided by the court. United States v. McFarland, 371 F.2d 701, 703 n.3 (2d Cir. 1966), cert. denied, 387 U.S. 906, 18 L. Ed. 2d 624, 87 S. Ct. 1689 (1967); United States v. Marchisio, 344 F.2d 653, 665 (2d Cir. 1965). The issue, in the language of § 1623(a), is whether the defendant made a "false material declaration."
False testimony before a grand jury need not bear upon the ultimate question of guilt or innocence of specific federal crimes in order to possess the requisite materiality. We have held on several occasions*fn16 since our landmark case, Carroll v. United States, 16 F.2d 951 (2d Cir.), cert. denied, 273 U.S. 763, 71 L. Ed. 880, 47 S. Ct. 477 (1927), the famous controversy over the lady in Earl Carroll's bathtub, that it is sufficient if the untrue declaration has "a natural effect or tendency to influence, impede or dissuade the grand jury from pursuing its investigation. . . ." 16 F.2d at 953. We are required to examine both the nature of the inquiry at which the testimony was given and the evidence introduced at trial to prove its falsity, in order to determine whether a truthful answer could conceivably have aided the grand jury investigation.*fn17
The ultimate issue, therefore, is whether the Government has shown that it could possibly have assisted the grand jury if it knew that Mancuso suggested the means of accounting for an attempted "gratuity" to the private architect, Clemons, in connection with a job unrelated to the inquiry. We believe that the evidence totally fails to support such a view. The question posed to Mancuso related to a wholly immaterial event. Neither the answer he in fact gave nor the truth he allegedly concealed could have impeded or furthered the investigation. The question could not, therefore, have elicited a material reply. See cases cited note 17, supra. The only argument offered in support of materiality is that until Mancuso testified, the grand jury had received a single coherent version of the facts from Laraiso. Mancuso's contradiction of Laraiso's claim that Mancuso suggested the false bill of sale presented the first conflict in evidence, which, it is said, confused the grand jury, forced it to reconsider its investigation, and therefore in a general sense "impeded" the inquiry. The difficulty with this argument is that the grand jury's confusion is more properly traceable to Laraiso's erroneous testimony, compounded by prosecutor Ozer's misapprehension, that the transaction bore some relationship to the alleged bribery associated with the Dewey Avenue job, when in fact it did not. Had Mancuso admitted that he told Laraiso how to falsify the corporate records, the misconception would have been reinforced, not dissipated. We therefore cannot agree that the truth Mancuso allegedly concealed could conceivably have led to the discovery of relevant evidence or that his alleged false statements tended to influence, impede or dissuade the grand jury from pursuing its investigation. A finding of materiality must have some basis in the content of the testimony itself. That which is otherwise wholly immaterial cannot become material solely because a prior witness, innocently but mistakenly led on by the prosecutor, has given the false or erroneous impression that it has some materiality. Accordingly, we reverse the conviction on Count Two.
The Count Three conviction is grounded in Ozer having asked Mancuso before the grand jury whether he and Laraiso ever received word that the City was to begin an investigation of them concerning a bribe attempt. This elicited an "answer" which consumes more than three pages of the grand jury transcript. Mancuso admitted learning of the investigation, and then in great detail described a second meeting he claimed he initiated with Claypool. Mancuso's version was that he convinced Claypool of his error in having construed Mancuso's prior effort to persuade him to approve revision of the Dewey Avenue contract as a bribe offer. Count Three alleged that this testimony was false because a second meeting never occurred.
At trial Claypool testified that Mancuso had offered a bribe at their one and only meeting.*fn18 Claypool stated that this had angered him greatly, causing him to depart promptly. He reported the incident to his superiors. When asked whether he had any second meeting with Mancuso such as the latter had described, he replied three times, "Not that I recall, no."*fn19
Mancuso's attacks on the sufficiency of the evidence to support Count Three are wholly without merit. We shall treat only the claim that his testimony concerning the claimed second meeting with Claypool lacked the requisite materiality. We deem this desirable to explicate further our discussion of Count Two.
The claim is that the testimony was not material because an indictment dealing with the attempt to bribe Claypool was never returned by the grand jury. Moreover, it is urged, no evidence was introduced at trial to indicate any interstate nexus of the incident to warrant federal jurisdiction. This argument completely misconceives the nature of both the grand jury function and the materiality requirement.
At the time Mancuso appeared, the grand jury had heard testimony from Laraiso depicting a pattern of extortion and public corruption involving Twin Village and the City of Batavia. An attempt to bribe Claypool, the City's Chief Engineer, could clearly play a significant part in the case being developed, either as an independent crime*fn20 or as an evidentiary stone in the larger edifice. And although it is certainly not necessary to materiality of grand jury testimony that an indictment be returned, the fact that Zito and Valenti were ultimately indicted and convicted for federal crimes establishes a fortiori that the possibility of federal jurisdiction existed.
Since evidence of the bribe attempt itself would be material, Mancuso's false testimony that he had convinced Claypool that there had been no bribe offer was clearly material, as it tended to impede or dissuade the grand jury from pursuing its investigation. Carroll v. United States, supra ; cases cited note 16, supra. Neither the failure of the grand jury to return an indictment concerning the alleged bribery attempt, nor the absence of proof that federal jurisdiction over it would have existed, is relevant to the issue of materiality. The conviction on Count Three is affirmed. We have reviewed appellant's other arguments and they are equally unpersuasive.
Since the trial court imposed identical concurrent sentences on Counts Two and Three and we have today reversed the conviction on Count Two, it is appropriate that we remand the case to the district court for review of sentence. We do so because of the possibility that conviction on both counts might have affected the punishment set for each.*fn21 Of course, we do not imply any view on the propriety of the original sentence. We leave the sentence to be imposed entirely to the discretion of district court.