False statements.

• Author: Bannon, Carolyn A.
• Position: Annual white collar crime survey

1. INTRODUCTION

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

   The statute has evolved to criminalize a variety of deceptive statements.(4) Section 1001 covers offenses spanning three broad categories: (1) falsifying, concealing or other cover-up of a material fact by any trick, scheme, or device; (2) making a materially false, fictitious, or fraudulent statements or representations; and (3) making or use of a writing or document with knowledge that such document contains materially false, fictitious or fraudulent statements.(5) Most prosecutions in the third category can be divided into four subcategories. First, it is an offense to give false information for the purpose of receiving a monetary or proprietary benefit.(6) Second, it is an offense to resist monetary claims by the United States by giving false information.(7) Third, it is a violation of [sections] 1001 to pursue a governmental privilege, such as employment or a security clearance, by using falsified information.(8) Finally, it is an offense to give false information to frustrate lawful regulation.(9)

   Section II of this Article describes the five elements of a false statement offense. Section III discusses several defenses to a charge of violating [sections] 1001. Section IV presents the sanctions for this offense, which typically entail a fine, imprisonment of not more than five years, or both.(10) Finally, Section V highlights several recent or ongoing developments in this area.

2. ELEMENTS OF THE OFFENSE

   To convict a defendant under [sections] 1001, 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) the statement falls within executive, legislative, or judicial branch jurisdiction.(11)

   1. Statements

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

      Section 1001 also extends to affirmative acts of concealment even where no actual statement has been made.(23) Silence may constitute a false statement under [sections] 1001 when it serves to mislead or when the declarant has a duty to speak.(24) Courts, however, do not regard silence, followed by a subsequent answer that does not contradict the implied response of the silence, to signify a negative answer to a question or to be a prosecutable act of concealment.(25)

   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.(26) To prove concealment the government must show willful non-disclosure of a material fact through a trick, scheme, or device.(27)

      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 First, Sixth, Ninth, and Eleventh Circuits have called [sections] 1001 a "catch-all" provision that applies even when misrepresentations are not specifically prohibited by another statute.(28) 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 that he allegedly concealed.(29) This issue frequently arises in the context of the reporting requirements of the Federal Election Campaign Act of 1971(30) and the Currency Transaction Report ("CTR") Act,(31) which requires domestic financial institutions to file currency transaction reports that describe transactions and identify parties in transfers of U.S. currencies.(32)

   3. Materiality

      In an attempt to resolve a conflict among the circuit courts, Congress amended [sections] 1001 in 1996 to extend the element of materiality in [sections] 1001 to apply to all of subsection (a).(33) Previously, [sections] 1001 referenced only `material facts' in subsection (a)(1).(34) Although most circuits read a materiality requirement into the statute insofar as it prohibited false statements and the creation of false documents,(35) this amendment was adopted to ensure that defendants were not held liable for trivial falsifications.(36) However, a majority of the circuit courts already had considered materiality to be an essential element to a false statement charge.(37) In fact, prior to the 1996 amendment, the Sixth Circuit took the issue one step further and viewed materiality as a "judicially-imposed [sic] limitation" to secure the reasonable application of the statute.(38)

      As a general principle, courts consider a statement to be material if it has a natural tendency or capacity to influence a decision or function of a federal agency.(39) It is not necessary for the statement to have actually influenced the agency.(40) In fact, the threshold for establishing materiality is minimal and may not require explicit evidence showing that the statement influenced or may have influenced the government agency.(41)

      Additionally, the agency need not have actually believed or even received the false statement for the materiality requirement to be met.(42) A voluntary, non-mandatory statement may also qualify as material.(43) Moreover, a statement may be material even if the maker derived no pecuniary or economic benefit at the government's expense.(44) Courts have recognized, however, an exception to the finding of materiality where the government itself supplied information that the defendant relied upon in making the statement.(45)

      In 1995, the Supreme Court overruled all prior conflicting precedent in United States v. Gaudin(46) in addressing whether the question of materiality is a question for the judge or the jury. The respondent in Gaudin was charged with making false statements on federal loan documents in violation of [sections] 1001. The Supreme Court held that the trial court had erred by refusing to submit the question of materiality to the jury, explaining that materiality is not a pure question of law, but rather a "mixed question" of law and fact best resolved by a jury.(47) The Court did not explicitly decide whether materiality is an element of all offenses under [sections] 1001.(48) However, as mentioned earlier, [sections] 1001 was amended to make materiality an element of all offenses under the statute.(49)

   4. Intent

      Knowing and willful intent(50) to make a false statement is a necessary element of a [sections] 1001 violation.(51) "Intent" under [sections] 1001 encompasses the intent to deceive, to mislead, or to induce belief in false information.(52) 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.(53) The statute, however, does not require the intent to defraud.(54)

      If a jury can infer from circumstantial evidence that the defendant acted knowingly and willfully,(55) proof of actual knowledge or actual willfulness is unnecessary.(56) A "reckless disregard of the truth" satisfies the intent element.(57) Furthermore, a defendant can have the requisite intent even if he is unaware of the statement's impact on a government branch or agency.(58)

   5. Jurisdiction

      Submitting a false statement to any of the three branches of government constitutes a basis for application of [sections] 1001. Prior to the 1996 amendment, the statute prohibited false statements to departments and agencies of the federal government.(59) In 1996, Section 1001 was amended to expand the jurisdiction of [sections] 1001 to all false statements made within the jurisdiction of the executive, legislative, or judicial branch of the government of the United States.(60) The statute was amended to overrule the Supreme Court's 1995 decision in Hubbard v. United States(61) which held that a federal court was neither a "department" nor an "agency" within the meaning of [sections] 1001.(62) As amended, the scope of [sections] 1001 is once again consistent with the Court's prior interpretation in United States v. Bramblett,(63) which had interpreted "department" to include Congress and the federal judiciary. The amendment also includes limitations on the application of [sections] 1001 to the legislative(64) and judicial(65) branches.

      A department or agency has jurisdiction in a matter if the matter falls within the general authority of that department or agency.(66) Jurisdiction exists even if the government has not lost money or property.(67) Moreover, jurisdiction exists regardless of whether the defendant communicated the statement directly to the government.(68) A defendant need not have actual knowledge of the federal jurisdiction over the matter in which the false statement was made; rather, it is enough that the defendant knowingly and willfully made the false statement.(69)

3. DEFENSES

   The most noteworthy defenses raised in [sections] 1001 prosecutions have been based on the "exculpatory no" and "ambiguity" doctrines. Other defenses, including constitutional defenses, have been less successful.(70)

   1. Exculpatory "No"

      In January 1998, the Supreme Court in Brogan v. United States(71) rejected the...