Appellant Yermian was charged with violating 18 U.S.C. Sec. 1001 (1976).1 At trial, Yermian's defense was simply that he did not know at the time he signed a personnel security form that it would be sent to the government. He appeals his conviction. Our jurisdiction rests on 28 U.S.C. Sec. 1291. We reverse the judgment and remand for a new trial because the trial court construed the scienter requirement of section 1001 too narrowly and gave the jury an inadequate instruction on that issue.

I. Facts.

Shortly after appellant Yermian was hired as an engineer by Galton Industries, Inc. (Galton) of Hawthorne, California, Galton asked Yermian to fill out a personnel security form. In filling out the form, Yermian provided the company with false information as to his job history and criminal record. At a later date, Galton presented Yermian with a typed version of the form, which Yermian signed, allegedly without carefully re-reading it. A notice at the bottom of the typed form warned that a false representation would be a violation of 18 U.S.C. Sec. 1001 and elaborated on the possible penalty for such a violation.

Galton subsequently sent the form to the Department of Defense, pursuant to a routine FBI security check necessitated by the nature of Galton's work. The FBI discovered that some of Yermian's statements were false and denied Yermian a security clearance. Confronted with the reasons for the denial of his security clearance, Yermian immediately conceded that he had lied.

II. Scienter Requirement of 18 U.S.C. Sec. 1001.

18 U.S.C. Sec. 1001 provides in part that "[w]hoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully ... makes any false ... statements" shall be fined or imprisoned. 18 U.S.C. Sec. 1001 (1976).2

The courts have long recognized that a conviction under section 1001 requires that the defendant know at the time he makes the statement that the statement is false, United States v. Lange, 528 F.2d 1280, 1288-89 (5th Cir.1976), and that the statement is made in a matter within the jurisdiction of a federal agency, United States v. Kraude, 467 F.2d 37, 38 (9th Cir.), cert. denied, 409 U.S. 1076, 93 S. Ct. 684, 34 L. Ed. 2d 684 (1972); Lowe v. United States, 141 F.2d 1005, 1006 (5th Cir.1944).

Yermian concedes that he knew at the time he made the statement that it was false. He also concedes that since the process of checking the security status of the employees of a defense contractor is a matter within the jurisdiction of the Department of Defense and since his false statement regarding his prior employment history and criminal record was connected to that security-checking process, the statement was made in a matter within the jurisdiction of a federal agency. He asserts, however, that at the time he made the admittedly false statement he had no idea that the statement was part of a federal security-checking process and hence had no knowledge that the statement was made in a matter within the jurisdiction of a federal agency. He contends that he had no knowledge that Galton was required to submit information regarding the security status of its employees to the federal government and that Galton's submission to the FBI of the information Yermian had provided was entirely unexpected by him.

Hence, we must decide whether the element of specific intent embodied in the words "knowingly and willfully" of section 1001 includes not only the defendant's knowledge of the statement's falsity, but also the defendant's knowledge that the statement, at the time it was made, was made in a matter within the jurisdiction of a federal agency.

No decision in this circuit has addressed the precise question raised here.3 In United States v. Cella, 568 F.2d 1266, 1288 (9th Cir.1978), the defendant contended the evidence was insufficient to show that he knew that his false statement was made in a matter within the jurisdiction of a federal agency. We sustained the conviction, on the basis that it was beyond credulity that the defendant, who was the administrator of Mercy Hospital, could be "ignorant" of the fact that his false entries on hospital records "would eventually be used to prepare income tax returns ... and Medicare reimbursement reports." There was also direct evidence of the defendant's knowledge. In Cella we assumed, without holding, that an element of the offense was knowledge of federal involvement.

In sustaining convictions under section 1001, the Second and Eighth circuits have apparently made the same assumption, stressing in their opinions the fact that the defendant had actual knowledge that his false statement was made in a matter within the jurisdiction of a federal agency. E.g., United States v. Candella, 487 F.2d 1223, 1226-27 (2d Cir.1973) (defendant "was aware" that his false statements submitted to New York City would form basis for federal reimbursement), cert. denied, 415 U.S. 977, 94 S. Ct. 1563, 39 L. Ed. 2d 872 (1974); Ebeling v. United States, 248 F.2d 429, 434-35 (8th Cir.) (defendant employee personally knew and intended that false invoices would become part of a cost statement submitted to federal government by employer for reimbursement), cert. denied, 355 U.S. 907, 78 S. Ct. 334, 2 L. Ed. 2d 261 (1957).

By contrast, courts in the Fifth, Sixth, and Seventh circuits have stated that the defendant's knowledge that a false statement is made in a matter within the jurisdiction of a federal agency is not a necessary element of section 1001. United States v. Baker, 626 F.2d 512, 516 (5th Cir.1980);4 United States v. Stanford, 589 F.2d 285, 297 (7th Cir.1978), cert. denied, 440 U.S. 983, 99 S. Ct. 1794, 60 L. Ed. 2d 244 (1979); United States v. Lewis, 587 F.2d 854, 857 (6th Cir.1978) (per curiam). Each of those cases, however, involved a direct attempt by a defendant to obtain funds from a federal source by fraudulent means.

We are now confronted directly with the question whether the government must prove as an essential element of a section 1001 violation that at the time the defendant made the false statement he knew that the statement was made in a matter within the jurisdiction of a federal agency. In light of the paucity of analysis in the cases and the lack of direct authority in our circuit, we must look closely at the language of section 1001 and the policy and purposes underlying it to determine whether jurisdictional knowledge is an essential element of a section 1001 offense.

We find the language of the statute ambiguous, as did the court in Baker, 626 F.2d at 515. While the phrase "knowingly and willfully" clearly provides that specific intent is a crucial element of the offense, neither the grammatical construction nor the punctuation of the statute indicates whether the "knowingly and willfully" phrase modifies only the phrase "makes any false, fictitious or fraudulent statements" or the broader phrase "in any matter within the jurisdiction of any department or agency of the United States ... makes any false, fictitious or fraudulent statements."

The placement of the "knowingly and willfully" phrase after, rather than before, the "jurisdiction phrase" is not indicative of whether jurisdictional knowledge is an element of the section 1001 offense. In the immediate statutory predecessor to section 1001, the words "knowingly and willfully" did precede not only the phrase "make ... any false or fraudulent statements" but also the phrase "in any matter within the jurisdiction of any department or agency of the United States." Act of Apr. 4, 1938, ch. 69, 52 Stat. 197 (the "1938 Act").5 The recodification of the 1938 Act in 1948, that resulted in the present language of section 1001, was intended to be not a "substantive change," see United States v. Bramblett, 348 U.S. 503, 508, 75 S. Ct. 504, 507, 99 L. Ed. 594 (1954) (describing 1948 revision of the 1938 Act), but merely one of several "minor changes of phraseology." H.R.Rep. No. 304, 80th Cong., 1st Sess. A80-A81 (1947) reprinted in 1948 U.S.Code Cong.Serv., Spec. Pamphlet for Title Eighteen 2434, 2535. Consequently, the fact that the "jurisdiction" phrase now precedes the "knowingly and willfully" phrase is not determinative of whether or not the latter phrase was meant to be read to modify the "jurisdiction" phrase.6

Although perhaps not entirely conclusive, the legislative history of section 1001 and its predecessors supports the view that Congress intended jurisdictional knowledge to be an element of the crime.7

The earliest predecessor of the present section 1001 that made the making of a false statement in a matter within the jurisdiction of any federal agency8 a crime, the Act of Oct. 23, 1918, ch. 194, 40 Stat. 1015 (the "1918 Act"),9 specifically included an element of specific intent to defraud the United States. No one could be convicted under the 1918 Act for making a false statement unless he had done so either "for the purpose of obtaining ... the payment" of a "claim upon or against the Government of the United States" or "for the purpose and with the intent of cheating and swindling or defrauding the Government of the United States." 40 Stat. at 1015 (emphasis added). This requirement of specific intent to defraud the United States carried with it an implicit, if not explicit, requirement that the maker of the false statement know that the statement is made in a matter within the jurisdiction of a United States agency.

After the Supreme Court had narrowly construed the phrase "defrauding the Government of the United States" contained in the 1918 Act to mean solely "fraudulent[ly] causing ... [a] pecuniary or property loss" to the federal government, United States v. Cohn, 270 U.S. 339, 346-47, 46 S. Ct. 251, 253, 70 L. Ed. 616 (1925), Congress sought to extend the reach of the statute to protect more broadly "the authorized functions of governmental departments and agencies from the perversion which might result from ... deceptive practices." United States v. Gilliland, 312 U.S. 86, 93, 61 S. Ct. 518, 522, 85 L. Ed. 598 (1940) (describing enactment of the Act of June 18, 1934, ch. 587, 48 Stat. 996 (the "1934 Act")).10 To effect the change, Congress deleted the references to a "purpose" of obtaining payment of a claim upon or against the United States and to a "purpose" and "intent" of cheating or defrauding the United States. Id. However, to be sure that a conviction under the new law still required the making of a false statement in a matter within the jurisdiction of the federal government, Congress inserted a new reference to federal jurisdiction at the end of the description of the prohibited conduct.11 United States v. Bramblett, 348 U.S. at 507-08, 75 S.Ct. at 507 (describing 1948 revision of the 1938 Act) ("jurisdiction" phrase inserted "simply to compensate for the deleted language as to purpose--to indicate that not all falsifications but only those made to government organs were reached").

The committee reports and the Congressional debates on the various bills12 which culminated in the 1934 Act contain references to the act's broadening the offense to include the presentation of false papers "before any department or agency of the Government," H.R.Rep. 829, 73d Cong., 2d Sess. 2 (1934) (emphasis added) (report on H.R. 8046); to the protection of "[t]he rights of the accused" by a requirement that the "act [of presentation of a false written instrument relating to any matter within federal jurisdiction] must be committed willfully and knowingly," id; to the extension of the law so that it "would close around and prosecute those who ... make false affidavits or submit fictitious bids, and so forth," 78 Cong.Rec. 2859 (1934) (statement of Sen. Ashurst on S.R. 2686); to the "purpose" of the bill being to protect "the revenues of the people from persons who knowingly make false certificates and supply fictitious bids" and to stop "these grafters, place hunters, and obscene buzzards who are trying to extract money illegally out of the Treasury," id. at 2858; and to the printing of a warning about the law on "every proposal," id. at 3724 (statement of Rep. McKeown on H.R. 8046). These references indicate that the legislators contemplated application of the 1934 Act in situations where the maker of the statement knows that the statement is made in a matter within the jurisdiction of a federal agency. The fact that the amendment was directly designed to remedy two sorts of conduct in which the makers of false statements clearly know of Federal involvement--the presentation of "false papers" regarding hot oil before the Department of Interior and the use of false certificates of wages paid by contractors in order to obtain reimbursement from the Public Works Administration, S.Rep. No. 1202, 73d Cong., 2d Sess. 1 (1934) (report on H.R. 8912 amendments)--also supports the conclusion that Congress, in deleting from the statute the requirement of fraudulent intent to cause pecuniary loss, did not at the same time intend to eliminate the previous requirement that the maker know that the statement was made in a matter within the jurisdiction of a federal agency.

We conclude that Congress intended that knowledge of federal involvement be an element of the crime. We agree with the Baker court that "18 U.S.C. Sec. 1001 is designed to protect federal funds and functions from fraudulent interference." 626 F.2d at 516; see also United States v. Gilliland, 312 U.S. 86, 93, 61 S. Ct. 518, 522, 85 L. Ed. 598 (1940). This is entirely consistent with the language of the statute and its history. But we do not subscribe to the view that "[i]n furthering these purposes, it is irrelevant whether defendant knew that his intentionally false statements might eventually influence a federal agency." Baker, 626 F.2d at 516 (emphasis added). To the contrary, the defendant's knowledge of federal involvement is entirely relevant to the proper effectuation of the Congressional goals, and a requirement of section 1001 that such knowledge exist is entirely consistent with the Congressional view of the scope of the statute as revealed by the statutory language and legislative history.

Accordingly, we hold that as an essential element of a section 1001 violation, the government must prove beyond a reasonable doubt13 that the defendant knew at the time he made the false statement that it was made in a matter within the jurisdiction of a federal agency.14

III. Adequacy of Jury Instructions.

The government contends that even if knowledge of governmental involvement is an essential element of 18 U.S.C. Sec. 1001, the instruction given to the jury met that requirement. The jury was instructed that it could convict upon a finding "that the defendant knew or should have known that the information was to be submitted to the government" (emphasis added). The government argues that the instruction reflects a "reasonably foreseeable" standard and that this "objective" standard15 is proper if knowledge that the statement is destined for the government is an element of the crime.

The standard proposed by the government, however, does not comport with the "subjective" standard of criminal knowledge required by this circuit. United States v. Jewell, 532 F.2d 697 (9th Cir.) (en banc), cert. denied, 426 U.S. 951, 96 S. Ct. 3173, 49 L. Ed. 2d 1188 (1976). In Jewell, we held "(1) that the required knowledge is established if the accused is aware of a high probability of the existence of the fact in question, (2) unless he actually believes it does not exist." Id. at 704 n. 21, 96 S.Ct. at n. 21; see also United States v. Esquer-Gamez, 550 F.2d 1231, 1235-36 (9th Cir.1977).

In this case, the court's instruction allowed the jury to find knowledge merely on the basis that the defendant should have known that his statements were going to the government and hence were made in a matter within federal agency jurisdiction. It allowed the jury to convict Yermian even if it did not find that he was aware of a high probability that the statement was made in a matter within the jurisdiction of the government, or, indeed, even if it believed that he, in fact, did not know that his statement would be sent to the government.

The district court's judgment is, therefore, REVERSED and REMANDED.