False statements.

• Author: Bier, Jennifer C.
• Position: Twelfth Survey of White Collar Crime

1. INTRODUCTION II. ELEMENTS OF THE OFFENSE

   1. Statements

   2. Falsity

   3. Materiality

   4. Intent

   5. Jurisdiction III. DEFENSES

   1. Exculpatory "No"

   2. Ambiguity

   3. Double Jeopardy

   4. Multiplicity of the Indictment

   5. Other Defenses IV. SENTENCING

1. INTRODUCTION

   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 of a variety of deceptive statements.(4) Section 1001 covers offenses in 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) Most prosecutions involving the making or using of documents or writings with knowledge of the instruments' falsity fall into four categories. First, it is an offense to give false information for the purpose of receiving a monetary or proprietary benefit.(6) Second, resisting monetary claims by the United States through the presentation of false information is an offense under [sections] 1001.(7) Third, [sections] 1001 encompasses the pursuit of some governmental privilege such as employment or security clearance using falsified information.(8) Fourth, giving false information to frustrate lawful regulation falls under [sections] 1001.(9) Section 1001 violations may be penalized by a fine, imprisonment for not more than five years, or both.(10)

2. Elements of the Offense

   In order to convict a defendant under [sections] 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.(11)

   1. Statements

      Section 1001 covers all statements, whether oral or written, sworn o voluntary or required by law.(12) Such statements include false invoice certifications,(13) false credit card statements,(14) checks naming false (but not "bad" checks),(15) false applications to obtain official documents,(16) false identifications given to border agents,(17) false information given to customs agents,(18) false Medicare claims,(19) false radio distress signals broadcast to naval aircraft,(20) marriage vows given falsely to gain citizenship,(21) false information given to federal investigators,(22) and a wide variety of statements falsely made toother governmental entities, usually in attempts to profit under false pretenses.(23)

      Section 1001 also extends to affirmative acts of concealment even where no actual statement has been made.(24) Silence may constitute a false statement under [sections] 1001 when it serves to mislead or when the declarant has a duty to speak.(25) 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 implied by the silence.(26)

   2. Falsity

      Falsity, the cornerstone of a [sections] 1001 offense, is established either by a false representation or by the concealment of a material fact.(27) To prove concealment, the government must show willful non-disclosure of a material fact through a trick, scheme, or device.(28)

      Courts disagree on whether [sections] 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. The Sixth, Ninth, and Eleventh Circuits have called [sections] 1001 a "catch-all" provision which applies even when misrepresentations are not specifically prohibited by another statute.(29) In prosecutions for concealment of information, the Second, Third, and Seventh Circuits have held that to sustain a conviction the government must prove that the defendant had a legal duty to disclose material facts which he was alleged to have concealed.(30) This confusion is particularly evident in the area of Currency Transaction Report ("CTR") requirements.(31)

   3. Materiality

      To ensure that defendants are not liable for trivial falsifications, most courts have curtailed the expansive reach of [sections] 1001 by reading a materiality requirement into the part of the statute prohibiting false statements and the creation of false documents.(32) The vast majority of the circuit courts consider materiality to be an essential element.(33) The Sixth Circuit views materiality as a "judicially-imposed limitation" rather than an element of the offense which must be proved beyond a reasonable doubt.(34)

      Generally, courts consider a statement material if it has a natural tendency or capacity to influence a decision or function of a federal agency,(35) although it is not necessary for the statement to have actually influenced the agency.(36) The threshold for establishing materiality is minimal, and may not even require explicit evidence.(37) Additionally, the agency need not have actually believed or even received the false statement for the materiality requirement to be met.(38) A voluntary, non-mandatory statement may also qualify as material.(39) Moreover, a statement may be material even if the maker derived no pecuniary or economic benefit at the government's expense.(40) However, courts have recognized an exception to the finding of materiality where the government itself supplied information that the defendant relied upon in making the statement.(41)

      The Supreme Court, overruling prior precedent, has recently stated that where materiality is considered an element of the offense, it is a mixed question of law and fact to be determined by the jury and must be proven beyond a reasonable doubt.(42) However, the Court did not explicitly decide whether materiality is an element of all offenses under [sections] 1001.(43)

   4. Intent

      Knowing and willful intent(44) to make a false statement is a necessary element of a [sections] 1001 violation.(45) "Intent" under the statute encompasses the intent to deceive, to mislead, or to induce belief in false information.(46) 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.(47) The statute does not require the intent to defraud.(48)

      If a jury can infer that the defendant acted knowingly and willfully,(49) proof of actual knowledge or actual willfulness is unnecessary.(50) Similarly, a "reckless disregard of the truth" satisfies the intent element.(51) Furthermore, 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.(52)

   5. Jurisdiction

      To constitute a [sections] 1001 violation, the false statement must be in relation to a matter "within the jurisdiction of any department or agency of the United States."(53) Breaking with prior precedent, the Supreme Court in United States v. Hubbard held that federal courts are not a "department or agency of the United States" within the meaning of [sections] 1001.(54) The Court expressly overruled United States v. Bramblett,(55) which had interpreted "department" to include Congress and the federal judiciary.(56) The Court left open the question of whether other "entities" within the judicial branch or Congress may qualify as "agencies" under [sections] 1001.(57) However, the only circuit to apply Hubbard so far has interpreted it to limit the jurisdictional element of [sections] 1001 to those matters before "department[s] or agenc[ies]" of the Executive Branch.(58)

      A department or agency has jurisdiction in a matter if it has authority over that matter.(59) Jurisdiction exists even if the government lost neither money nor property.(60) Moreover, jurisdiction exists regardless of whether the statement is conveyed directly to the government.(61) The defendant need not know that a federal agency has ultimate jurisdiction over the statement for jurisdiction to exist.(62)

3. DEFENSES

   The most notable defenses raised in [sections] 1001 prosecutions are the "exculpatory no" and "ambiguity" defenses. Other defenses, including constitutional ones, have met with less success.(63)

   1. Exculpatory "No"

      Although [sections] 1001 appears on its face to apply to any false statement pertaining to a matter within the jurisdiction of a federal agency, several circuits have limited the statute's reach with the "exculpatory no" doctrine. "In essence, the doctrine provides that, under certain circumstances, the government may not prosecute an individual for false or fraudulent statements which were made in response to questioning initiated by the government where a truthful statement would have incriminated the defendant."(64) The "exculpatory no" doctrine is meant to "balance the need for protecting the basic functions of government agencies with the concern that a criminal suspect not be forced to incriminate himself in order to avoid punishment under section 1001.(65)

      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 [sections] 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.(66) 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.(67)

      The Ninth Circuit has adopted a five-part test to determine the applicability of the doctrine. The test requires...