United States v. Shah - 44 F.3d 285 (5th Cir. 1995)

Rule:

The False Claims Act prohibits the knowing and willful making of false, fictitious or fraudulent statements or representations on a matter within the jurisdiction of any department or agency of the United States. 18 U.S.C.S. § 1001. To establish a violation, the government must prove five elements: (1) a statement, that is (2) false (3) and material, (4) made with the requisite specific intent, and (5) within the purview of government agency jurisdiction. With regard to the requisite specific intent, a false representation is one made with an intent to deceive or mislead.

Facts:

The General Services Administration (GSA) issued a solicitation for the purchase of irons, ironing boards, and ironing board pads. Because the bid was to be negotiated, not sealed, the offeror was allowed to alter the price after submission but before the award. Among the prospective bidders was Omega Electronics (Omega), a small California company that had held the previous contract for steam irons with GSA. Omega had also previously dealt with GSA and the GSA contract specialist, Linda Brainard (Brainard), on an undisclosed number of small purchase contracts. Brainard testified that these contracts occasioned numerous telephone contacts between her and Nitin Shah, Omega's president. GSA mailed the solicitation for iron products to Omega's address in San Carlos, California. The same solicitation was also sent to Kipper & Company. Jerome Kipper (Kipper), president of Kipper & Company, testified that he and Shah had spoken a "few times" on the telephone. Kipper testified that, during one of their conversations, they agreed to fax to each other their bids and, further, that Shah requested confidentiality. They then carried out this agreement. Shah was convicted of making a false statement in violation of 18 U.S.C. § 1001. Shah appealed and argued that his promise not to divulge his bid price to anyone else, after he had submitted the bid, could not be a violation of § 1001 as a matter of law.

Issue:

Was Shah’s conviction under 18 U.S.C. § 1001 proper?

Answer:

Yes.

Conclusion:

The court held that a promise made without the intent to perform was fraudulent. Shah had approached the other bidder with his scheme prior to submitting his bid and so at that time did not intend to carry out his promise of confidentiality. He also did not have that intention when they resumed conversation after the bids were submitted, so the jury could infer that Shah had the same intention on the day he submitted the bid. The court also held that Shah’s identity could be inferred circumstantially from the ample evidence that pointed to him. Lastly, the court rejected Shah’s claim that he had not knowingly promised confidentiality of the solicitation because evidence was sufficient for a jury to infer that Shah read and understood what he had signed and submitted. The conviction was affirmed.