If you tell your partner that you spent $100 on a rare bobblehead for your office, when the full price was actually $1,000, have you said anything false? Literally, you did spend $100; you just spent another $900 as well. But your partner is sure you meant something else when they see the credit card bill and gasp.
Whether you’ve made a false statement in that scenario may be a matter for a marriage counselor. But the Supreme Court recently heard argument in Thompson v. United States, which involves whether a borrower who told the FDIC that he had borrowed $110,000 when he actually borrowed a total of $219,000 was legally guilty of making a “false statement.” Because the statute under which the borrower was convicted—18 U.S.C. § 1014—does not use the term “misleading,” the case turns on what it means to make a “false” statement. The Circuits are split: The Seventh Circuit, where Thompson arose, joins the Fifth, Eighth, and Tenth Circuits in holding both false and misleading statements actionable under § 1014’s prohibition. But the First, Sixth, and Eleventh Circuits say the statute only prohibits statements that are literally false.
At oral argument, Thompson’s counsel pointed to the text of the statute, emphasizing that “false” means objectively not true, and thus cannot cover statements that are true but misleading in context. If Congress had meant to criminalize those true but misleading statements, Thompson’s counsel argued, it could have done so explicitly, as it does in other sections of the federal criminal code that speak to “false or misleading” statements.
But what really is the difference between false and misleading? The government argued that the term “false” recognizes the role of context in determining if the statement conveyed an “untrue message.” At the heart of the argument, the justices wrestled with whether “false” means only literally, objectively false, or can mean that the statement in context conveys a false message. What if, as Justice Kagan hypothesized, a doctor truthfully tells a patient that he has performed a procedure a hundred times, but doesn’t mention that 99 of those procedures failed? Is that false, misleading, or both? No surprise that Chief Justice Roberts found these distinctions “tough to parse . . . in a lot of cases.”
While the case itself is tied to a singular statute that prohibits false statements in federal loan and credit applications, the number of other statutes that prohibit making false statements is much larger.[1] And while many of those statutes embrace misleading statements on their face, the interpretation of those that don’t may depend on how the Court decides what is “false” here. As Justice Gorsuch put it, “there are a lot of false statement statutes” the government can wield. The more broadly they apply, the more liability they can create. As always, the Investigations and White Collar Defense Group is on call to help you navigate false statement prosecutions, while the appellate attorneys at Venable are ready to handle your appeals across the nation.
[1] Consider 18 U.S.C. § 1001, a favorite tool of federal prosecutors for pursuing defendants who lie to the FBI, for example; 18 U.S.C. § 1920, criminalizing false statements to get federal employee compensation; or even 18 U.S.C. § 1027, prohibiting false statements in documents required under the Employee Retirement Income Security Act of 1974.