## Facts

- Grumman Aircraft Engineering Corp. contracted with the U.S. Navy to produce jet aircraft and subcontracted Steiner Plastics Manufacturing Co., Inc. to make plexiglass cockpit canopies.
- The subcontract required the canopies to be subject to inspection by both Grumman and the Navy, and inspections occurred at Steiner’s Glen Cove, New York plant.
- Production problems led to an accumulation of roughly 250 defective or incomplete canopies; about 100 could not be reworked to pass inspection.
- A scheme was implemented to ship unapproved canopies by removing inspection approval stamps and serial numbers from canopies that had been properly inspected and approved and affixing them to canopies that had not been inspected and approved.
- The government’s principal witness, production manager Walter Speck, testified that he proposed the scheme and that Malcolm Steiner (the corporation’s president and co-owner) authorized him to carry it out.
- The corporation was convicted in federal district court of one conspiracy count and six substantive counts under 18 U.S.C. § 1001 and fined $45,500.

## Issues

1. Whether switching inspection approval stamps and serial numbers on canopies produced for a Navy aircraft program was conduct “in any matter within the jurisdiction” of a federal department or agency under 18 U.S.C. § 1001.
2. Whether the trial court’s refusal to admit certain evidence regarding the canopies’ defective condition or prior rejection undermined proof of falsification or concealment of a material fact under § 1001 and required reversal.
3. Whether the evidence was sufficient to establish that the corporation, through its managing personnel, knowingly and willfully participated in the conspiracy and § 1001 violations.

## Decision

- The Second Circuit affirmed the corporation’s convictions and fines.
- The court held that the scheme implicated a matter within the Navy’s jurisdiction because the Navy had contractual inspection rights and actually conducted inspections at the plant.
- The court held that transferring approval stamps and serial numbers falsified or concealed a material fact: the inspection and approval status of the delivered canopies.
- The court found no reversible error in excluding evidence about the precise defective condition of the canopies because the material fact was whether required inspections and approvals had occurred.
- The court concluded that Speck’s testimony and the evidence permitted the jury to find knowing and willful corporate participation, including through authorization by the corporation’s president.

## Legal Principles

- “Jurisdiction” under 18 U.S.C. § 1001 reaches deceptive conduct that affects a federal agency’s authorized inspection or approval function, including conduct by private subcontractors where the agency retains inspection rights.
- Misrepresenting inspection status by falsifying indicia of approval (such as inspection stamps and serial numbers) constitutes falsification or concealment of a material fact under § 1001.
- For § 1001 materiality in an inspection regime, the central inquiry is whether the false device misrepresents compliance with required inspection/approval procedures, not the technical degree of defect in the item.
- A corporation may be held criminally responsible for § 1001 violations and related conspiracy when the scheme is carried out by employees with authorization or direction from senior management acting for the company.

## Conclusion

The Second Circuit upheld Steiner Plastics’ conspiracy and § 1001 convictions, ruling that falsifying inspection stamps and serial numbers on items subject to Navy inspection fell within federal jurisdiction and materially misrepresented inspection approval, and that the evidence supported knowing and willful corporate participation.


United States v. Steiner Plastics Mfg. Co., 231 F.2d 149 (2d Cir. 1956)