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United States v. Mandanici

decided: March 7, 1984.

UNITED STATES OF AMERICA, APPELLEE,
v.
JOHN C. MANDANICI, JR., DEFENDANT-APPELLANT



Appeal from a judgment of conviction entered in the United States District Court for the District of Connecticut, after a jury trial before Robert C. Zampano, Judge, of three counts of making false statements inviolation of 18 U.S.C. § 1001. Affirmed in part; reversed in part.

Oakes and Kearse, Circuit Judges, and Wyzanski, District Judge.*fn*

Author: Kearse

KEARSE, Circuit Judge:

Defendant John C. Mandanici, Jr., appeals from a judgment entered in the United States District Court for the District of Connecticut, after a jury trial before Robert C. Zampano, Judge, convicting him on three counts of making false statements in a matter within the jurisdiction of the Department of Housing and Urban Development ("HUD"), in violation of 18 U.S.C. § 1001 (1976). Mandanici was sentenced (a) on count three, to a five-year term of imprisonment, execution of which was suspended, a fine of $10,000 to be paid within twelve months, and probation for three years; (b) on count two, to a five-year prison term, execution of which was suspended, and a $10,000 fine to be paid within twelve months, such penalty to be consecutive to that imposed on count three; and (c) on count one, to a five-year term of imprisonment, execution of which was suspended, and probation for two years, to be concurrent with the sentences imposed on counts two and three. On appeal Mandanici contends principally that the evidence presented at trial was insufficient to support his conviction. We agree as to count one and reverse as to that count; we affirm the convictions on counts two and three.

I. BACKGROUND

Mandanici was the owner of an apartment building at 1477 Central Avenue, Bridgeport, Connecticut ("1477 Building" or "Building") as to which he sought and received rent subsidy benefits under the HUD-funded Section 8 Moderate Rehabilitation Program described at 24 C.F.R. § 882 (1980) ("Section 8 Program"). The Section 8 Program, designed to provide decent, safe, and sanitary housing for low income persons through the moderate rehabilitation of properties owned by private landlords, id., was administered by state Public Housing Authorities ("PHAs") funded by HUD through Annual Contribution Contracts. To participate in the Section 8 Program, a landlord was required (1) to have a building needing repair of a major component, such as a roof or heating system, (2) to complete rehabilitation work approved by the local PHA, and to spend in that work at least $1000 times the number of qualifying units,*fn1 and (3) to complete and file a number of HUD documents with the local PHA. Upon satisfaction of these requirements, the landlord was guaranteed, for a period of up to 15 years, a per-qualifying-apartment rental of between 100% and 140% of their fair market rental as determined by HUD.

The HUD documents to be filed by a landlord in connection with the Section 8 Program consisted of three types of printed forms designed to enable the local PHA to evaluate the landlord's rehabilitation proposal and to monitor his completion of the agreed work. The first document was the initial application form ("Application"), in which the landlord described the building, briefly summarized the proposed rehabilitation, and estimated the cost of such rehabilitation. The second, to be completed and filed by the landlord after approval of the Application by the local PHA, was an Agreement to Enter into Housing Assistance Payments Contract ("AHAP Contract"). In the AHAP Contract, which governed the contractual relationship between the landlord and the local PHA during the rehabilitation, the landlord was to (1) provide a more detailed description of the approved rehabilitation and its expected cost, and (2) promise to perform this rehabilitation in accordance with an agreed-upon schedule which stated deadlines for the commencement and completion of the work. The third document to be completed and filed by the landlord was a Housing Assistance Payment Contract ("HAP Contract"), certifying that the approved rehabilitation of the units qualifying under the Section 8 Program either had been completed in accordance with the provisions of the AHAP Contract or would be completed "in accordance with the terms on which the units were accepted." Once the HAP Contract was completed and signed by both the landlord and an agent of the local PHA, the landlord would begin to receive HUD-funded rent subsidies from the local PHA. Both the AHAP Contract and the HAP Contract bore express warnings that the knowing and willful making of a false statement therein could subject the maker of the statement to prosecution under 18 U.S.C. § 1001.

The Section 8 Program in Bridgeport was administered by the Housing Authority of the City of Bridgeport ("Bridgeport HA"), which had been allocated funding by HUD for a total of 100 apartment units in the Bridgeport area. In October 1980, Mandanici applied to participate in the Section 8 program by filing an Application for rent subsidies for all 88 units in his 1477 Building. This Application was followed by an AHAP Contract dated December 1, 1980, and, eventually, a HAP Contract dated July 1, 1981.

In 1982, a federal grand jury indicted Mandanici on three counts of making false statements in these three documents.*fn2 Count one charged that Mandanici had violated 18 U.S.C. § 1001 by representing in his Application "that he would perform rehabilitation work on property owned by him . . ., said work to cost an estimated $88,000 whereas, . . . as [Mandanici] then and there well knew, the rehabilitation work that he agreed to perform would not cost $88,000." Count two charged that Mandanici had violated § 1001 by representing in his AHAP Contract "that he would perform a total of $88,000 in rehabilitation work on property owned by him . . ., whereas, . . . as [Mandanici] then well knew, the rehabilitation work that he performed on the said property would not cost $88,000." Count three charged that Mandanici had violated § 1001 by representing in his July 1, 1981 HAP Contract "that property owned by him . . . had been rehabilitated in accordance with the terms and conditions of the . . . [AHAP] Contract, . . . whereas, . . . as [Mandanici] then well knew, the work had not been performed in accordance with the terms of the . . . [AHAP] Contract."

A. The Evidence at Trial

In his initial application in October 1980, Mandanici gave a brief description of the proposed rehabilitation and estimated its total cost at $88,000. In completing his Application Mandanici was assisted by Joseph Gambino, a registered architect employed by Bridgeport HA to aid Section 8 Program applicants in making cost estimates for their buildings. Gambino conducted a cursory inspection of the 1477 Building, determined that a major component of the 1477 Building -- the roof -- was in need of repair, and listed on Mandanici's Application the following general work that was necessary to make the units in the 1477 building safe, decent, and sanitary installation of a new roof, repair and replacement of broken windows, patching and plastering of walls, caulking of windows, installation of smoke detectors, elevator repair, insulation of pipes, and repair of the electrical system. Gambino also estimated the cost of the proposed rehabilitation at $88,000, and listed this cost on Mandanici's Application. Mandanici signed the Application, certifying "that the data . . . contained in this Application . . . are true, correct, and complete."

Mandanici's Application was approved by Bridgeport HA, which officially informed Mandanici of its approval by letter dated November 12, 1980. This letter reaffirmed that a minimum investment by Mandanici of $88,000 was required for participation in the Section 8 Program.

Gambino then began assisting Mandanici to prepare a final "work write-up," specifying each rehabilitation task to be performed on the 1477 Building and the estimated cost (taken by Gambino from a trade cost-estimate book) of each such task. In the process, Gambino reminded Mandanici that his entitlement to Section 8 Program benefits depended on his spending $88,000. The work write-up specified a five-ply roof to be placed on the building at a cost of $23,000; 500 thermal windows replaced at a cost of $5,000; walls of the apartments patched and plastered at a cost of $100 per unit, for a total cost of $8800; windows caulked at a cost of $5 per unit, for a total of $440; a crane rented at a cost of $500 per day for seven days to hoist the caulkers to the windows, for a total of $3500; 192 smoke detectors installed at a cost of $50 each, totaling $9600; kitchen cabinets repaired and replaced at a cost of $2000; carpeting replaced at a cost of $1800; door frames replaced at a cost of $9000; elevator oil packing gland repaired at a cost of $1000; sanitary soil lines insulated at an approximate cost of $4280; broken pipes replaced in the cellar at a cost of $396; electrical system repaired at a cost of $5000; and 344 window screens installed at a cost of $30 each, totaling $10,320. Finally, administrative costs in the amount of $3864 were added, bringing the total to $88,000. Mandanici attached this work write-up as Exhibit B to his AHAP Contract, "agree[ing] to complete the rehabilitation . . . in accordance with the work write-up."

The AHAP Contract imposed on Mandanici a schedule for commencement and completion of the rehabilitation work. It provided that the work was to be commenced not later than February 1, 1981. It provided that the work was to be completed not later than 60 days after the effective date of the AHAP Contract. Since Mandanici's AHAP Contract ...


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