False statements.

AuthorDavis, John E.
PositionTenth Survey of White Collar Crime

Section 1001 of Title 18 of the United States Code(1) is a frequently used and far-reaching(2) statute which criminalizes false statements made directly or indirectly to the federal government.(3)

The statute has evolved into the broad criminalization of a variety of deceptive statements.(4) Section 1001 covers offenses that fall into three general categories: (1) falsification, concealment, or other cover-up of a material fact by any trick, scheme, or device; (2) the making of any false, fictitious, or fraudulent statements or representations; and (3) the making or use of any writing or document with knowledge that such document contains false statements.(5) Section 1001 violations may be penalized by a fine, imprisonment for not more than five years, or both.(6)

  1. Elements of the Offense

    In order to convict a defendant under section 1001 for making false statements, the government must prove five elements: (1) the defendant made a statement; (2) the statement was false; (3) the statement was material; (4) the statement was made "knowingly and willfully"; and (5) there is government agency jurisdiction.(7)

    1. Statements

      1. Statements Covered by Section 1001

        Section 1001 covers all statements, whether oral or written, sworn or unsworn, voluntary or required by law.(8) Such statements include false invoices and certifications,(9) false credit card statements,(10) checks naming false drawees (but not "bad" checks),(11) false applications to obtain official documents,(12) false identifications given to border agents,(13) false information given to customs agents,(14) false Medicare claims,(15) false radio distress signals broadcast to naval aircraft,(16) marriage vows given falsely to gain citizenship,(17) false information given to federal investigators,(18) false information given to the judiciary acting in an administrative capacity,(19) false information given to Congress by an executive officer,(20) and a wide variety of statements falsely made to other governmental entities, usually in attempts to profit under false pretenses.(21)

        Section 1001 also extends to affirmative acts of concealment even where no actual statement has been made.(22) Silence may constitute a false statement under section 1001 when it serves to mislead or when the declarant has a duty to speak.(23) However, courts do not regard silence as a prosecutable act of concealment when it signifies a negative answer to a question and subsequent answers do not contradict the response inferred by the silence.(24)

      2. Exceptions to Section 1001: "The Exculpatory No" and "Judicial

        Function" Doctrines and Their Application

        Although section 1001 appears on its face to apply to any false statement pertaining to a matter within the jurisdiction of a federal agency, the courts have limited the statute's reach with the "exculpatory no" doctrine. Under this doctrine, the word "statement" in section 1001 does not include any negative exculpatory response to a government inquiry.(25) The doctrine has been explicitly adopted by the Fourth,(26) Eighth,(27) Ninth(28) and Eleventh Circuits.(29) Most other circuits seem likely to adopt the doctrine if presented with the right factual situation.(30) However, the Fifth Circuit, which had been the first circuit to recognize the doctrine, has since reversed itself. Sitting en banc, the court found no support for the doctrine in the language of the statute and no reason to look past that language.(31) Finally, the Sixth Circuit has expressed reluctance towards adoption of the doctrine.(32)

        The courts which have adopted the "exculpatory no" doctrine base their rationale on legislative intent and the Fifth Amendment. First, they read the legislative history of section 1001 to indicate that Congress sought to criminalize only false statements volunteered with the intent to induce government action, not exculpatory responses to questions initiated by government agents.(33) Second, they reason that forcing an individual to choose between an incriminating truthful response and an exculpatory false response comes "uncomfortably close" to infringing upon the Fifth Amendment privilege against self-incrimination.(34)

        The Supreme Court has not ruled expressly on the viability of the "exculpatory no" doctrine. However, the Court interprets section 1001's scope as all-encompassing, even in criminal investigations.(35) This interpretation may imply a reluctance to embrace the judicially-created "exculpatory no" doctrine.(36)

        The Ninth Circuit has adopted a five-part test to determine the applicability of the doctrine.(37) This test has been adopted by the Fourth(38) and Eighth(39) Circuits, and has been applied by a district court in the Seventh Circuit.(40) However, the Sixth Circuit has explicitly rejected this test.(41) The circuits have split on a number of issues relating to the application of the doctrine.(42)

        While section 1001 has been applied to statements made to the judiciary,(43) the courts have recognized a "judicial function" exception. Under this doctrine, statements made to the courts when they are acting in an adjudicative function are exempt from section 1001.(44) The reasoning for this doctrine springs from concern that a defendant's trial tactics might be hampered by the fear of prosecution under section 1001,(45) as well as a reluctance by the courts to apply section 1001 where other, more specific statutes already apply.(46)

    2. Falsity

      The falsity element is the cornerstone of a section 1001 offense. Falsity is established either by a false representation or by the concealment of a material fact.(47) To prove concealment, the government must show willful non-disclosure of a material fact through a trick, scheme, or device.(48)

      Courts disagree on whether section 1001 itself imposes a general duty to be honest and forthcoming or whether there must be a specific duty deriving explicitly or implicitly from an independent statute.(49) This confusion is particularly evident in the area of Currency Transaction Report ("C.T.R.") requirements.(50) In C.T.R. cases, non-bank defendants who conceal such transactions from the government by failing to report them are criminally liable when they have a legal duty to inform the bank or the government of their transactions.(51) Courts may infer a legal duty to report whenever the defendant's failure to do so might impede the bank's explicit statutory duty of reporting all currency transactions beyond an ordinary level.(52)

    3. Materiality

      To ensure that defendants are not liable for trivial falsifications, courts have limited section 1001's expansive reach by reading a materiality requirement into the statute.(53) A majority of the circuit courts consider materiality an essential element.(54) The Second Circuit, however, does not consider materiality an element of the offense at all.(55) In dicta, the Supreme Court characterized the materiality of false statements under section 1001 as a question of law to be determined by a judge, not the jury,(56) and nearly all circuits have expressly adopted this reasoning. Most courts do not require that materiality be proven beyond a reasonable doubt.(57)

      Generally, courts consider a statement material if it has a natural tendency or capacity to influence a decision or function of a federal agency,(58) although it is not necessary for the statement to have actually influenced the agency.(59) The threshold for establishing materiality is minimal and may not even require explicit evidence.(60) Additionally, the agency need not have actually believed, or even received, the false statement for the materiality requirement to be met.(61) A voluntary, non-mandatory statement may also qualify as material.(62) Moreover, a statement may be material even if the maker derived no pecuniary or economic benefit at the government's expense.(63)

      Materiality must be viewed in light of the specific circumstances surrounding the making of a false statement.(64) Accordingly, courts have recognized an exception to the finding of materiality where the government supplied information that the defendant relied upon in making the statement(65) or where the defendant was only answering the government's own directive.(66)

    4. Intent

      Knowing and willful intent(67) to make a false statement is a necessary element of a section 1000 violation.(68) "Intent" under the statute encompasses the intent to deceive, to mislead, or to induce belief in false information.(69) The intent to "manipulate and pervert" a government agency's function satisfies the element, even where no intent to deceive in a "subjective or literal sense" exists.(70)

      The statute does not require the intent to defraud.(71) If a jury can infer that the defendant acted knowingly and willfully,(72) proof of actual knowledge or actual willfulness is unnecessary.(73) Similarly, a "reckless disregard for the truth" satisfies the intent element.(74) Additionally, because intent refers to falsity rather than materiality or jurisdiction, a defendant may be liable under the statute even if completely unaware of the statement's impact on a government agency.(75)

    5. Jurisdiction

      To constitute a section 1001 violation, the false statement must be "within the jurisdiction of any department or agency of the United States."(76) The Supreme Court has broadly construed the jurisdiction requirement,(77) and has held that "department" includes all three branches of the government: executive, legislative, and judicial.(78) Further, a government department or agency has jurisdiction even if its contact with the statement is indirect.(79) Jurisdiction is bestowed by any statutory basis for the agency's access to the information(80) and is present wherever a false statement relates in some way to a matter in which a federal agency has the power to act.(81)

      Jurisdiction exists regardless of whether the government lost money or property.(82) Moreover, jurisdiction exists regardless of whether the statement is conveyed...

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