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United States v. Zacher

decided: October 17, 1978.


Appeal from a judgment entered in the United States District Court for the Western District of New York, after a jury trial before John T. Elfvin, Judge, convicting appellant of four counts of receiving bribes in connection with the provision of Medicaid services, in violation of 42 U.S.C. § 1396h(b) (1972) (subsequently amended). The Court of Appeals determined that appellant's conduct was not proscribed by the statute as it then existed, reversed the judgment of the district court and remanded with instructions to dismiss the indictment.

Before Oakes, Gurfein and Meskill, Circuit Judges.

Author: Meskill

Appellant William H. Zacher and his father were partners in ownership of the Manhattan Manor Nursing Home in Buffalo, New York. Zacher held the position of Nursing Home Administrator there under a license issued by the State of New York. In 1973, the year the Home opened, Zacher was approached by several people interested in placing in the Home relatives due to be released from local hospitals. At the time, Zacher was charging his private patients $29.00 per day. Some of the patients for whom admission was sought were eligible for Medicaid. Zacher calculated (accurately) that Medicaid would reimburse him at a rate of about $25.00 per day. In the four instances relevant to this appeal, after discussions with their respective families, Zacher admitted the patients on the understanding that each family would pay him $4.00 per day as a "supplement" to the Medicaid payments. These supplementary payments were generally made monthly, by check, until the fall of 1973. At that time Zacher informed the families that payments were no longer to be made by check at the Home's office but were to be made in cash to Zacher personally.*fn1 Private patients continued to pay by check. No receipts were given for the cash payments. In the fall of 1974, Zacher informed the families that no more payments from them would be required.*fn2

Zacher was convicted of four counts of receiving bribes in connection with the provision of Medicaid services, in violation of 42 U.S.C. § 1396h(b) (1972). In the relevant period, 1973-74, this statute read as follows:

(b) Whoever furnishes items or services to an individual for which payment is or may be made in whole or in part out of Federal funds under a State plan approved under this subchapter and who solicits, offers, or receives any

(1) kickback or bribe in connection with the furnishing of such items or services or the making or receipt of such payment, or

(2) rebate of any fee or charge for referring any such individual to another person for the furnishing of such items or services

shall be guilty of a misdemeanor and upon conviction thereof shall be fined not more than $10,000 or imprisoned for not more than one year, or both.*fn3

This appeal turns on the question of whether the payments received by Zacher can be considered bribes within the meaning of that statute.*fn4 We hold they cannot. In view of our decision on this issue, we need not reach the other questions raised by appellant.*fn5

At trial, the government called three witnesses active in the administration of the Medicaid program in New York State and in Buffalo. None of these witnesses was able to point to any federal, state or county statute, rule or regulation that might shed light on the intended scope of the term "bribe" in § 1396h(b).*fn6 Because the statute itself does not define the term "bribe" we must look to similar statutes, the common law, and common sense for aid in its interpretation. In doing so, we follow the reasoning of Justice Jackson in Morissette v. United States, 342 U.S. 246, 263, 72 S. Ct. 240, 250, 96 L. Ed. 288 (1952):

(W)here Congress borrows terms of art in which are accumulated the legal tradition and meaning of centuries of practice, it presumably knows and adopts the cluster of ideas that were attached to each borrowed word in the body of learning from which it was taken and the meaning its use will convey to the judicial mind unless otherwise instructed. In such case, absence of contrary direction may be taken as satisfaction with widely accepted definitions, not as a departure from them.

Common law bribery has been defined as "the voluntary giving or receiving of anything of value in corrupt payment for an official act done or to be done or with the corrupt intent to influence the action of a public official or of any other person professionally concerned with the administration of public affairs." 12 Am.Jur.2d Bribery § 2 (footnotes omitted). See also United States v. Brecht, 540 F.2d 45, 48 (2d Cir. 1976). Cf. United States v. Worrall, 2 U.S. (2 Dall.) 384, 1 L. Ed. 426, 28 F. Cas. 774 (1798); 3 R. A. Anderson, Wharton's Criminal Law & Procedure, Bribery, §§ 1380-81 (1957); Black's Law Dictionary 239 (4th ed. 1968). Most American jurisdictions have enacted statutes which cover the corrupt influencing of public officials, and many have extended the bribery prohibition to cover corrupt payments to voters, athletes, union representatives and commercial employees. 12 Am.Jur.2d Bribery § 3.

The federal statute entitled "Bribery of public officials and witnesses" imposes criminal penalties on anyone who "Corruptly gives, offers or promises anything of value to any public official" with the intent to influence any official act or to influence the official to commit a fraud on the United States or to violate his lawful duty. 18 U.S.C. § 201(b) (emphasis added). Parallel provisions cover the public official who "corruptly" solicits or receives anything of value in return for being so influenced. 18 U.S.C. § 201(c) (emphasis added). Section 201 provides for lesser penalties in cases where anything of value is given to a public official "for or because of any official act performed or to be performed." 18 U.S.C. §§ 201(f) and (g). Although both categories of offenses are prohibited in the "bribery" section, § 201, the federal judiciary has characterized the first group of offenses, requiring a corrupt intent, as bribery, and has referred to the lesser included offense, not requiring a corrupt intent, as the giving or receiving of an illegal gratuity. See, e. g., United States v. Evans, 572 F.2d 455, 480 (5th Cir. 1978); United States v. Crutchfield, 547 F.2d 496, 498 (9th Cir. 1977); United States v. Brewster, 165 U.S. App. D.C. 1, 506 F.2d 62, 67-76 (D.C. Cir. 1974); United States v. Harary, 457 F.2d 471, 472 (2d Cir. 1972); United States v. Egenberg, 441 F.2d 441, 443 (2d Cir.), Cert. denied, 404 U.S. 994, 92 S. Ct. 530, 30 L. Ed. 2d 546 (1971); United States v. Barash, 412 F.2d 26, 37 (2d Cir.), Cert. denied, 396 U.S. 832, 90 S. Ct. 86, 24 L. Ed. 2d 82 (1969); United States v. Cohen, 387 F.2d 803, 806 (2d Cir. 1967), Cert. denied, 390 U.S. 996, 88 S. Ct. 1197, 20 L. Ed. 2d 95 (1968). See also United States v. Irwin, 354 F.2d 192, 196 (2d Cir. 1965), Cert. denied, 383 U.S. 967, 86 S. Ct. 1272, 16 L. Ed. 2d 308 (1966) (Congress has power to outlaw unauthorized payments to public officials in absence of proof of corruption or breach of duty). The many cases drawing the bribe-gratuity distinction augment our understanding of the scope of the word "bribe" as used by the judiciary. Our examination of this and other federal statutes, however, has failed to uncover any uniform definition of the term "bribe" as used in the federal code.*fn7

The common thread that runs through common law and statutory formulations of the crime of bribery is the element of corruption, breach of trust, or violation of duty. As this Court observed in United States v. Esperdy, 285 F.2d 341, 342 (2d Cir.), ...

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