United States v. James Arthur Friedhaber

856 F.2d 640, 1988 U.S. App. LEXIS 12207, 1988 WL 92387

• Court: Court of Appeals for the Fourth Circuit
• Decided: September 9, 1988
• Docket: 86-5657
• Status: Published

Opinions

K.K. HALL, Circuit Judge:

At his trial in September of 1986, James Arthur Friedhaber was found guilty by a jury of making false statements to a grand jury of the United States in violation of 18 U.S.C. § 1623. The district judge, however, set aside the verdict and entered an order of acquittal pursuant to Fed.R.Crim. P. 29(b), concluding that Friedhaber’s false statements had not been “material.” The United States appealed and a divided panel of this Court affirmed the district court’s determination in United States of America v. James Arthur Friedhaber, 826 F.2d 284 (4th Cir.1987). A majority of this Court having now voted to rehear the government’s appeal en banc, we reconsider the issue and reverse.

I.

Friedhaber’s testimony before a federal grand jury stemmed from an investigation of a fire that destroyed a funeral home in Southport, North Carolina, on August 11, 1984. The owners of the funeral home, Thomas E. Gilbert III and Thomas E. Gilbert IV, (“the Gilberts”) had become targets of the investigation after it was learned that the fire appeared to have been purposely set with multiple points of origin and accelerated with kerosene. The Gil-berts were subsequently indicted on a variety of charges, including conspiracy to commit arson, arson, and mail fraud in connection with an effort to collect insurance proceeds from the fire.

Friedhaber, an unlicensed air conditioning and heating repairman, had delivered his bill for certain repair work to the funeral home between 10:00 a.m. and 10:30 а.m. on August 11, 1984. As one of only two people known to have been in the building before the fire was discovered around 12:15 p.m., he was subsequently interviewed by Tim Batchelor, an agent for the North Carolina State Bureau of Investigation, and Gary Moss, a private investigator employed by the carrier of the funeral home’s fire insurance. At the September б, 1984, interview, Friedhaber stated that while he was in the building he neither saw nor smelled anything unusual and that “everything appeared to be okay.”

In February, 1986, Friedhaber was interviewed by Charles Beck, a private investigator retained by the Gilberts in connection with a civil suit against their fire insurance carrier. Friedhaber informed Beck that on the day of the fire he had smelled a “pungent odor” in the funeral home like “an old barrel that had a fire in it.” He further described the odor as “a stale smell like old burning trash” somewhat akin to insulation smoldering in the walls.

On June 4, 1986, Friedhaber was subpoenaed to appear before the grand jury. In his subsequent testimony, Friedhaber again stated that he had smelled a pungent odor like an old garbage barrel in the funeral home on the day of the fire. When confronted with the apparent inconsistency between his testimony and his statement of September 6, 1984, Friedhaber denied that he had given a different account to Batche-lor and Moss. Friedhaber insisted that he had told the investigators about the pungent odor but they had failed to write it down.

On June 18, 1986, Friedhaber was indicted for making false statements to the grand jury. The indictment specifically charged that his denial of inconsistent statements was both false and material to the government’s investigation of the fire at the Gilbert Funeral Home. Following his indictment, Friedhaber allegedly admitted to government agents that he had not told Batchelor and Moss about the pungent odor described to the grand jury.

At trial, Friedhaber argued that even if the falsity of his statement was conceded,¹ his denial of inconsistency could not be considered material to the grand jury’s deliberations. Accordingly, at the close of the government’s presentation, he moved for an immediate order of acquittal pursuant to Fed.R.Crim.P. 29.² The district judge reserved ruling on the motion and sent the case to the jury. After the jury returned a verdict of guilty, the court immediately granted the Rule 29(b) motion, noting that no evidence had been presented “to show how defendant’s allegedly false statement has adversely affected ... [the grand jury’s] work.”

This appeal by the United States pursuant to 18 U.S.C. § 3731³ followed.

II.

Our concern today is not with determining the law, but rather with its correct application. The essential elements of a violation of 18 U.S.C. § 1623 have been firmly established. The government must prove:

1. That the defendant’s testimony was given under oath before a grand jury;

2. That the testimony given was false in one or more of the respects charged;

3. That the false testimony was knowingly given; and

4. The subject matter of the testimony was “material” to the grand jury’s investigation.

Materiality has also been expressly defined in this Circuit as the “natural effect or tendency to impede, influence or dissuade the grand jury from pursuing its investigation.” United States v. Paolicelli, 505 F.2d 971, 973 (4th Cir.1974). The inquiry into materiality assesses potential. It considers whether the false statement was “capable of influencing the grand jury on the issue before it.” United States v. Bailey, 769 F.2d 203 (4th Cir.1985).

On appeal, the government argues that although the district court cited the proper law, its Rule 29 order erroneously relied on the lack of actual effect of Friedhaber’s perjury. The government further contends that the defendant’s false statement must be regarded as material because it bolstered his own credibility as a key witness while undermining that of the investigating agents. We find the government’s position persuasive.

Clearly, by noting both the absence of adverse affect and the fact that the government could still continue with its investigation of the Gilberts through the sitting grand jury, the district court did examine, in at least some fashion, the actual effect of Friedhaber’s testimony. That issue was, of course, irrelevant to a proper inquiry into Section 1623 materiality. The critical error in the district court’s reasoning, however, was not in merely considering the actual effect of Friedhaber’s perjury, but in undervaluing the potential effect of the defendant’s misstatements. We are fully satisfied that Friedhaber’s false testimony was capable of improperly influencing the grand jury.

It is important to remember that the perjury for which Friedhaber was convicted was not the “pungent odor” story itself, but rather his claim that he had told that same story to all investigators. As a witness who had been in the funeral home immediately before the fire, his testimony regarding possible causes was of obvious significance. By testifying that he had smelled an odor similar to burning trash or smoldering insulation, the defendant impliedly suggested that the fire was of a natural origin and not a kerosene-accelerated fire, as alleged by the government. His subsequent insistence that he had consistently given the same account of the events of August 11,1984, would, if believed, have substantially enhanced his credibility while simultaneously impeaching the credibility of Batchelor and Moss. Surely, that must be regarded as material. See e.g. United States v. Berardi, 629 F.2d 723 (2nd Cir.), cert. denied, 449 U.S. 995, 101 S.Ct. 534, 66 L.Ed.2d 293 (1980).

III.

We, therefore, conclude for the foregoing reasons that the decision of the district court to grant Friedhaber’s Rule 29 motion for acquittal must be reversed. The case is hereby remanded to the district court with instructions that the jury’s verdict of guilty be reinstated.

REVERSED AND REMANDED.

1 . Although Friedhaber continued to deny at trial that his statement to the grand jury had been untrue, he does not contest, on appeal, the trial jury’s contrary conclusion.

2 . Fed.R.Crim.P. 29 states in pertinent part:

Rule 29. Motion for Judgment of Acquittal

(a) Motion Before Submission to Jury.

Motions for directed verdict are abolished and motions for judgment of acquittal shall be used in their place. The court on motion of a defendant or of its own motion shall order the entry of judgment of acquittal of one or more offenses charged in the indictment or information after the evidence on either side is closed if the evidence is insufficient to sustain a conviction of such offense or offenses. If a defendant’s motion for judgment of acquittal at the close of the evidence offered by the government is not granted, the defendant may offer evidence without having reserved the right.

(b) Reservation of Decision on Motion.

If a motion for judgment of acquittal is made at the close of all the evidence, the court may reserve decision on the motion, submit the case to the jury and decide the motion either before the jury returns a verdict or after it returns a verdict of guilty or is discharged without having returned a verdict.

3 . 18 U.S.C. § 3731 provides in pertinent part that:

In a criminal case, an appeal by the United States shall lie to a court of appeals from a decision, judgment or order dismissing an indictment ... after verdict or judgment ... except that no appeal shall lie where the double jeopardy clause of the United States Constitution prohibits further prosecution.