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United States v. Arch Trading Co. - 987 F.2d 1087 (4th Cir. 1993)

Rule:

To establish a violation of 18 U.S.C.S. § 1001, it must be proved that (1) the defendant made a false statement to a governmental agency or concealed a fact from it or used a false document knowing it to be false, (2) the defendant acted "knowingly or willfully," and (3) the false statement or concealed fact was material to a matter within the jurisdiction of the agency. A material fact about a matter within the jurisdiction of the agency is one that has a natural tendency to influence agency action or is capable of influencing agency action.

Facts:

Arch Trading Company, Inc. (“Arch Trading”) was indicted after government agents discovered that Arch Trading's executives violated two emergency executive orders prohibiting doing business with Iraq by their attempt to enter Iraq to install laboratory equipment pursuant to an existing contract with an Iraqi agency. Arch Trading was convicted of disobeying the emergency executive orders in violation of 50 U.S.C.S. § 1701 et seq., and of lying to the Department of Treasury's Office of Foreign Assets Control in violation of 18 U.S.C.S. § 1001.

Issue:

Did the district court err in convicting Arch Trading of conspiring to commit an offense against the United States in violation of 18 U.S.C.S. § 371, of disobeying the emergency executive orders in violation of 50 U.S.C.S. § 1701 et seq., and of lying to the Department of Treasury's Office of Foreign Assets Control in violation of 18 U.S.C.S. § 1001?

Answer:

No

Conclusion:

The court affirmed and held that when Congress provided criminal sanctions for violations of executive orders, such violation constituted an "offense" for the purposes of 18 U.S.C.S. § 371. Also, the evidence supported a conviction under either the "offense" or the "defraud" clause of § 371, the orders were not void for vagueness, and Arch Trading had actual notice of the illegality of its actions. Finally, Arch Trading's conviction under 18 U.S.C.S. § 1001 involved a question of materiality, which was a question of law to be determined by the trial judge and, therefore, there was no reversible error by the trial court's failure to clarify that issue for the jury.

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