Fraud
and False Statements
24.00 FALSE STATEMENTS
Updated June 2001
24.01 STATUTORY LANGUAGE: 18 U.S.C. § 1001
24.02 GENERALLY
24.03 ELEMENTS
24.04 FALSE STATEMENTS OR REPRESENTATIONS
24.05 MATTER WITHIN JURISDICTION OF A BRANCH OF THE FEDERAL GOVERNMENT
24.06 MATERIALITY
24.07 WILLFULNESS
24.08 DEFENSES
24.08[1] Exculpatory No Doctrine
24.08[2] Wrong Statute Charged
24.09 VENUE
24.10 STATUTE OF LIMITATIONS
24.01 STATUTORY LANGUAGE: 18 U.S.C. § 1001
§1001. Statements or entries generally
(a) . . . Whoever, in any matter within the jurisdiction of the
executive, legislative, or judicial branch of the Government of the United
States, knowingly and willfully
(1) falsifies, conceals or covers up by any trick, scheme, or
device a material fact;
(2) makes any materially false, fictitious, or fraudulent
statements or representation;
(3) makes or uses any false writing or document knowing the
same to contain any materially false, fictitious or fraudulent
statement or entry;
shall be fined* under this title or imprisoned not more than five
years, or both.[FN1]
*As to offenses committed after December 31, 1984, the Criminal Fine
Enforcement Act of 1984 (P.L. 98-596) enacted 18 U.S.C. § 3623 [FN2]
which increased the maximum permissible fines for both misdemeanors and
felonies. For the felony offense set forth in section 1001, the maximum
permissible fine for offenses committed after December 31, 1984, is
increased to at least $250,000 for individuals and $500,000 for
corporations. Alternatively, if the offense has resulted in pecuniary gain
to the defendant or pecuniary loss to another person, the defendant may be
fined not more than the greater of twice the gross gain or twice the gross
loss.
24.02 GENERALLY
This statute has a history of more than one hundred years. The courts have
recognized that the statute is necessarily couched in very broad terms. "Congress
could not hope to foresee the multitude and variety of deceptive practices which
ingenious individuals might perpetrate upon an increasingly complex governmental
machinery, a complexity that renders vital the truthful reporting of material
data."
United States
v. Beer, 518 F.2d 168, 170 (5th Cir. 1975);
see also United States v. Fern, 696 F.2d 1269, 1273-74
(11th Cir. 1983).
The statute technically describes two distinct offenses concerning any
matter within the jurisdiction of a department or agency of the
United States
:
1. Falsifying, concealing, or covering up a material fact by any
trick, scheme, or device.
2. Making materially false, fictitious, or fraudulent statements
or representations; or making or using any false writing or
document.
Each of these offenses requires different elements of proof.
United States
v.
Mayberry, 913 F.2d 719, 722 n.7 (9th Cir. 1990).
The purpose of section 1001 is "to protect the authorized functions of
governmental departments and agencies from the perversion which might result
from" false information.
United States
v. Gilliland, 312
U.S.
86, 93
(1941); see Bryson v.
United States
, 396
U.S.
64, 70 (1969);
United States
v. Olson, 751 F.2d 1126, 1128 (9th Cir. 1985); United
States v. Brack, 747 F.2d 1142, 1151-52 (7th Cir. 1984); But
see, United States v. Machi, 962 F.Supp 442 (S.D.N.Y. 1997). In the
criminal tax context, the statute is normally used in connection with false
documents or statements submitted to an Internal Revenue agent during the course
of an audit or investigation. The statute is not normally used in the case of a
false statement on a return because, if the return is signed under the penalties
of perjury, as most are, section 7206(1) of the Internal Revenue Code (Title 26)
is considered a more appropriate charge.
Before a section 1001 charge may be included in a criminal tax indictment,
authority must be obtained from the Deputy Assistant Attorney General (Criminal),
Tax Division. See Tax Division Directive No. 115 at pp. 3-47 - 48,
supra. The Tax Division prefers to restrict authorization of
section 1001 prosecutions to those instances where the false statement was made
under oath or in writing, although each request will be considered on its merits.
24.03 ELEMENTS
Limiting this discussion to offenses involving false statements or
representations and false documents, the government must prove the following
elements beyond a reasonable doubt to establish a violation of section 1001:
1. The defendant made a false statement or representation, or
made or used a false document;
2. In a matter within the jurisdiction of the executive,
legislature or judicial branch of the Government of the United
States;
3. The false statement or representation, or false document
related to a material matter; and,
4. The defendant acted willfully and with knowledge of the
falsity.
United States v. Gaudin, 515 U.S. 506 (1995); United States v.
Shafer, 199 F.3d 826, 828 (6th Cir. 1999); United States v. David, 83
F.3d 638 (4th Cir. 1996); United States v. Barr, 963 F.2d 641, 645
(3rd Cir. 1992); United States v. Steele, 933 F.2d 1313, 1318-19 (6th Cir.
1991) (en banc); United States v. Gafczk, 847 F.2d 685, 690
(11th Cir. 1988); United States v. Brack, 747 F.2d 1142, 1146 n.4
(7th Cir. 1984); United States v. Race, 632 F.2d 1114, 1116 (4th Cir.
1980); United States v. Baker, 626 F.2d 512, 514 (5th Cir. 1980);
United States v. Gilbertson, 588 F.2d 584, 589 (8th Cir. 1978). .
24.04 FALSE STATEMENTS OR REPRESENTATIONS
The term "statement" as used in section 1001 has been given a broad
interpretation. The Supreme Court has recognized that the term includes both oral
and written statements. United States v. Beacon Brass Co., 344 U.S. 43,
46 (1952). Either can be a violation of section 1001. The Second Circuit, in
United States v. McCue, 301 F.2d 452, 456 (2d Cir. 1962), stated
that:
The appellant's contention that Section 1001 does not apply to oral
statements is disputed by the language of the statute itself which
penalizes the making of "any false, fictitious or fraudulent
statements" as well as the making or using of "any false writing or
document."
McCue, 301 F.2d at 456 (citations omitted); See also United
States v. Steele, 933 F.2d 1313, 1318 n.4 (6th Cir.1991) (en
banc); United States v. Fitzgibbon, 619 F.2d 874, 878 (10th Cir.
1980); United States v. Massey, 550 F.2d 300, 305 (5th Cir. 1977).
There also is no requirement that the statement be under oath. The statute
applies to unsworn, as well as sworn, statements. Massey, 550 F.2d at
305; Neely v. United States, 300 F.2d 67, 70 (9th Cir. 1962).
A statement is false for purposes of this statute even if it is a
technically true statement, but it is knowingly put to a false use. In
Peterson v. United States, 344 F.2d 419 (5th Cir. 1965), in response to
the question whether a payment was for past earned fees or fees to be earned, the
defendant submitted a letter stating that his records showed the payment was an
accrued fee, and accordingly, the payment was a deductible expense for a
particular year. The court held that even if the literal language of the letter
was true as to what the records reflected, it was clearly open to the jury to
find that the statement in the letter as to the payment being an accrued fee was
false. Peterson, 344 F.2d at 427. See also United States
v. Brack, 747 F.2d 1142, 1150 (7th Cir. 1984), cert. denied, 469 U.S.
1216 (1985) ("even though the statements were accurate as to the total amount of
the contract, they constituted false statements within the meaning of section
1001 by concealing the fraudulent nature of the contract").
Cf. Bronston v. United States, 409 U.S. 352, 358 n.4 (1973)
(fraudulent statements include "intentional creation of false impressions by a
selection of literally true representations") (citations omitted).
A forged endorsement on a tax refund check has been held to be a false
statement within the ambit of section 1001. Gilbert v. United States,
359 F.2d 285 (9th Cir. 1966). In Gilbert, the defendant, an accountant,
endorsed checks with the taxpayer's name and his own name, and then deposited the
checks into his own trust account. The court acknowledged that the defendant
"made no pretense that the payees had themselves executed the endorsements," but
held nevertheless that his endorsements constituted unlawful misrepresentations.
Gilbert, 359 F.2d at 286.
Section 1001 prohibits false statements generally, not just those
statements or documents required by law or regulation to be kept or furnished to
a federal agency. As stated by the court in United States v. Arcadipane.
41 F.3d 1, 4-5 (1st Cir. 1994):
It seems self-evident that section 1001 is intended to promote the smooth
functioning of government agencies and the expeditious processing of the
government's business by ensuring that those who deal with the government
furnish information on which the government confidently may rely. To this
end, section 1001 in and of itself constitutes a blanket proscription
against the making of false statements to federal agencies . Thus, while
section 1001 prohibits falsification in connection with the documents that
persons are regarded by law to file . . . , its prohibitory sweep is not
limited to such documents. The statute equally forbids falsification of
any other statements, whether or not legally required, made to a federal
agency.
See United States v. Meuli, 8 F.3d 1481, 1485 (10th Cir. 1993);
United States v. De Rosa, 783 F.2d 1401, 1407 (9th Cir.1986); United
States v. Olson, 751 F.2d 1126, 1127 (9th Cir. 1985); United States v.
Diaz, 690 F.2d 1352, 1358 (11th Cir. 1982). Thus, it is not necessary that
the alleged false statement be a statement that the defendant was required by law
to make. Bryson v. United States, 396 U.S. 64 (1969); United States v.
Knox, 396 U.S. 77 (1969); Neely, 300 F.2d at 71; Knowles v. United
States, 224 F.2d 168, 172 (10th Cir. 1955). As the court stated in
Bryson, 396 U.S. at 72:
Our legal system provides methods for challenging the Government's
right to ask questions -- lying is not one of them. A citizen may
decline to answer the question, or answer it honestly, but he cannot
with impunity knowingly and willfully answer with a falsehood.
The absence of a requirement that the government prove that the statement
made was one required by statute or regulation pertains only to the situation
where the defendant is charged with making a false statement. The proof for such
a prosecution is substantially different, in this regard, from the proof needed
for a prosecution alleging concealment as a violation of section 1001. If the
defendant is charged with concealing or failing to disclose material facts, the
government must prove that the defendant had a legal duty to disclose the
material facts at the time the defendant allegedly concealed them. United
States v. Dorey, 711 F.2d 125, 128 (9th Cir. 1983); But see Olson,
751 F. 2d at 1127-28, limiting Dorey.
In contrast to perjury statutes, 18 U.S.C. § 1621, et
seq., there are no strict requirements under section 1001 for the method
of proving the falsity of statements. Thus, falsity may be proven by the
uncorroborated testimony of a single witness. United States v. Fern,
696 F.2d 1269, 1275 (11th Cir. 1983); United States v. Carabbia, 381 F.2d
133, 137 (6th Cir. 1967); United States v. Marchisio, 344 F.2d 653, 665
(2d Cir. 1965); Neely, 300 F.2d at 70; Travis v. United States,
269 F.2d 928, 936 (10th Cir. 1959), rev'd on other grounds, 364 U.S. 631
(1961); United States v. Killian, 246 F.2d 77, 82 (7th Cir. 1957).
Note that under 18 U.S.C. § 1623, the two-witness rule does not apply to
perjury for false declarations in court proceedings or before grand juries.
Section 1001 nevertheless differs from 18 U.S.C. § 1623 in that the perjury
conviction requires proof of an oath while a false statement conviction does not.
United States v. D'Amato, 507 F.2d 26, 29 (2d Cir. 1974).
24.05 MATTER WITHIN JURISDICTION OF A BRANCH
OF THE FEDERAL GOVERNMENT
To establish a violation of section 1001, the false statement or
representation must be shown to have been made in a matter within the
jurisdiction of the executive, legislative or judicial branch of the Government
of the United States. Relying upon Congressional intent, courts have given the
term "jurisdiction" an expansive reading. In United States v. Rodgers,
466 U.S. 475 (1984), the Court stated that "[t]he term 'jurisdiction' should not
be given a narrow or technical meaning for purposes of Section 1001."
Rogers, 466 U.S. at 480 (quoting Bryson v. United States, 396 U.S.
64, 70 (1969)). See United States v. Shafer, 199 F.3d 826, 828 (6th
Cir. 1999). Consequently, the jurisdiction of the executive legislative or
judicial branch within the meaning of the statute is not limited to the power to
make final or binding determinations. Rather, it includes, as well, matters
within an agency's investigative authority. Rodgers, 466 U.S. at 480.
Thus, "a 'statutory basis for an agency's request for information provides
jurisdiction enough to punish fraudulent statements under Section 1001.'"
Rodgers, 466 U.S. at 4512 (quoting Bryson, 396 U.S. at 70-71);
see also United States v. Milton, 8 F.3d. 39 46 (D.C. Cir.
1993); United States v. Bilzerian, 926 F.2d 1285, 1300 (2d Cir. 1991).
Likewise, a false statement submitted to a federal agency falls within the
statute if the false statement relates to a "matter as to which the Department
had the power to act." Ogden v. United States, 303 F.2d 724, 743 (9th Cir.
1962), after remand, 323 F.2d 818 (9th Cir. 1963); see
Shafer, 199 F.3d at 828-829; United States v. Diaz, 690 F.2d 1352,
1357 (11th Cir. 1982); United States v. Cartright, 632 F.2d 1290, 1292
(5th Cir. 1980); United States v. Adler, 380 F.2d 917, 921-22
(2d Cir. 1967).
Whether a matter is within the jurisdiction of the executive, legislative
or judicial branch of the government is a question of law. Shafer, 199
F.3d at 828; United States v. Gafyczk, 847 F.2d 685, 690 (11th Cir. 1988);
United States v. Lawson, 809 F.2d 1514, 1517 (11th Cir. 1987); United
States v. Goldstein, 695 F.2d 1228, 1236 (10th Cir. 1981); Pitts v. United
States, 263 F.2d 353, 358 (9th Cir. 1959); See United States v.
Gaudin, 515 U.S. 506 (1995). In Gaudin, the Supreme Court,
recognizing that the Constitution requires that the jury decide all elements
of the crime, held that it was error in a prosecution under 18 U.S.C 1001 to
take from the jury the question of materiality. Gaudin strongly
suggests that irrespective of the nature of the question whether a matter is
within the jurisdiction of an agency of the executive branch (i.e.,
fact or law), the question must be submitted to and resolved by the jury.
In the past, the courts have uniformly found that the Internal Revenue
Service is a "department or agency of the United States" within the meaning of
18 U.S.C. § 1001. United States v. Morris, 741 F.2d 188, 190-91
(8th Cir. 1984); United States v. Fern, 696 F.2d 1269 (11th Cir. 1983);
United States v. Schmoker, 564 F.2d 289, 291 (9th Cir. 1977); United
States v. Isaacs, 493 F.2d 1124, 1156-57 (7th Cir. 1974); United States
v. Ratner, 464 F.2d 101 (9th Cir. 1972); United States v. McCue,
301 F.2d 452, 455 (2d Cir. 1962). See
also United States v. Knox, 396 U.S. 77, 80-81 (1969) (Court simply
accepted, without directly holding, the applicability of the statute to false
documents submitted to the Internal Revenue Service). As noted above, the statute
has its origins in a perceived need to protect the government from monetary
frauds. Clearly, this could not be accomplished without prohibiting false
representations made to the Internal Revenue Service on matters relating to tax
liability.
In United States v. Bramblett, 348 U.S. 503 (1955), the Supreme
Court held that the term "department" as used in section 1001, as written at that
time, referred to all three branches of government. In Hubbard v. United
States, 514 U.S. 695 (1995), the Court overruled Bramblett to hold
that the term "department" refers only to a "component of the Executive Branch".
514 U.S. at 699-702, 715. With respect to the term "agency" in former Section
1001 with regard to which Bramblett was silent, the Supreme Court in
Hubbard held only that a court is not an "agency", 514 U.S. at 715. The
False Statement Accountability Act of 1996 overruled Hubbard and
included in section 1001 all branches of the federal government. Obviously,
since the executive branch is explicitly listed in this law, the IRS is included
within the reach of the statute. This argument is further strengthened by the
long history of the judicial findings that the IRS is an "agency or department"
within the meaning of section 1001, as it existed prior to 1996.
The false statement need not be made directly to or even received by the
executive, legislative or judicial branch of the government. United States v.
Oren, 893 F.2d 1057, 1064 (9th Cir. 1990); United States v. Gibson,
881 F.2d 318, 322 (6th Cir. 1989); United States v. Suggs, 755 F.2d
1538, 1542 (11th Cir. 1985); United States v. Wolf, 645 F.2d 23, 25
(10th Cir. 1981). If the defendant puts the statement or document in
motion, that is sufficient. For example, a defendant who falsely endorsed tax
refund checks and deposited them in his bank account was guilty of violating
section 1001. Gilbert v. United States, 359 F.2d 285, 287 (9th Cir.1966).
Moreover, false statements made to state, local or even private entities who
either receive federal funds or are subject to federal supervision can form the
basis of a section 1001 violation. See Shafer, 199 F.3d at 829
(false statements made to state agency that received federal support and was
subject to federal regulation "squarely within the jurisdiction of an agency or
department of the United States); Gibson, 881 F.2d at 322 (overstated
invoices submitted by private party to Tennessee Valley Authority was a matter
within federal jurisdiction).
Since the false statements or documents need not actually be received by
the executive, legislative or judicial branch, the Tax Division has authorized
prosecution pursuant to section 1001 for false claims which have been prepared,
but have yet to be filed with the Internal Revenue Service. This scenario occurs,
for example, in electronic filing prosecutions where the filer has been
apprehended either after or at the time of the presentation of his false claim
to a tax filing service, but before transmission is effectuated. Because the
false claim has not been submitted to the Service, the commonly used 18 U.S.C.
§ 287 charge is unavailable. Section 1001 provides a mechanism by which
these false claims can be prosecuted. See Section 22.07, infra.
24.06 MATERIALITY
Although the word "material" was only explicitly mentioned in the first
clause of prior section 1001, which refers to the falsification or concealment
of a material fact, most courts "have read such a requirement into . . . [the
false statement and false document clauses] . . . 'in order to exclude trivial
falsehoods from the purview of the statute.'" Hughes v. United States,
899 F.2d 1495, 1498 (6th Cir. 1990) (citing United States v. Abadi,
706 F.2d 178, 180 (6th Cir. 1983); see also United States v. Baker,
200 F.3d 558, 561 (8th Cir. 2000); United States v. Gafyczk, 847 F.2d 685,
691 (11th Cir. 1988) (citing United States v. Lichenstein, 610 F.2d 1272,
1278 (5th Cir. 1980)); United States v. Baker, 626 F.2d 512, 514
& n.5 (5th Cir. 1980); United States v. Adler, 623 F.2d 1287, 1291
(8th Cir. 1980);. Thus, "[false statements made to conceal a fraud are no
less material for the purposes of Section 1001 than false statements designed to
induce a fraud." United States v. Brack, 747 F.2d 1142, 1150 (7th Cir.
1984). Even though materiality has been grafted onto the statutory scheme of the
second and third clauses, failure to allege the false statement's or false
document's materiality is not fatal to an indictment where the facts "advanced
by the pleader warrant the inference of materiality." United States v.
Oren, 893 F.2d 1057, 1063 (9th Cir. 1990).
The present wording of the statute is much more explicit and refers both
to a "material fact" and to "any materially false, fictitious, or fraudulent
statement or entry"; both phrases appear in the first paragraph of current
section 1001 where the elements of the crimes are listed. This leaves little room
for interpretation and clearly suggests that materiality is an element of all
aspects of this crime.
Unlike the other circuits, the Second Circuit has refused to read a
materiality requirement into the second and third clauses of the statute. The
Second Circuit has repeatedly held that "materiality is not an element of the
offense of making a false statement in violation of Section 1001." United
States v. Elkin, 731 F.2d 1005, 1009 (2d Cir. 1984). See also
United States v. Bilzerian, 926 F.2d 1285, 1299 (2d Cir. 1991), 502 U.S.
813, 63 (1991); United States v. Silva, 715 F.2d 43, 49 (2d Cir.
1983) (the court lists elements of a section 1001 false statement prosecution
without mentioning materiality); United States v. Gribben, 792 F. Supp.
960 (S.D.N.Y. 1992), rev'd on other grounds, 984 F.2d 47 (2d Cir. 1993);
United States v. Sprecher, 783 F. Supp. 133, 157 (S.D.N.Y. 1992). However,
as noted above, the current language of the statute leaves little, if any, room
for interpretation on this issue.
The commonly used test for determining whether a matter is material is
whether the falsity or concealment had a natural tendency to influence, or was
capable of influencing, the agency or department. United States v. Gaudin,
515 U.S. 506, 509 (1995); Baker, 200 F.3d at 561; United States v.
White, 27 F. 3d 1531, 1534 (11th Cir. 1994); United States v.
Hutchinson, 22 F.3d 846, 851 (9th Cir. 1992); United States v. Meuli,
8 F.3d 1481, 1484 (10th Cir. 1993); United States v. Steele,
933 F.2d 1313, 1319 (6th Cir. 1991) (en banc); United States v.
Grizzle, 933 F.2d 943, 948 (11th Cir. 1991); Brack, 747 F.2d at 1147;
United States v. Green, 745 F.2d 1205, 1208 (9th Cir. 1984); United
States v. Diaz, 690 F.2d 1352, 1357 (11th Cir. 1982); Baker, 626 F.2d
at 514 & n.5; United States v. Jones, 464 F.2d 1118, 1122 (8th Cir.
1972). As the Ninth Circuit stated:
[T]he test for determining the materiality of the falsification is
whether the falsification is calculated to induce action or reliance
by an agency of the United States, -- is it one that could affect or
influence the exercise of governmental functions, -- does it have a
natural tendency to influence or is it capable of influencing agency
decision?
United States v. East. 416 F.2d 351, 353 (9th Cir. 1969).
It is not essential that the agency or department actually rely on or be
influenced by the falsity or concealment. Baker, 200 F.3d at 561;
United States v. Myers, 878 F.2d 1142, 1143 (9th Cir. 1989); United
States v. Lawson, 809 F.2d 1514, 1520 (11th Cir. 1987); Brack, 747
F.2d at 1147; Green, 745 F.2d at 1208; United States v. Fern,
696 F.2d 1269, 1275 (11th Cir. 1983); Diaz, 690 F.2d at 1357; United
States v. Markham, 537 F.2d 187, 196 (5th Cir. 1976);
Jones, 464 F.2d at 1122; Gonzales, 286 F.2d
at 122. Accordingly, in United States v. Parsons, 967 F.2d 452, 455
(10th Cir. 1992), the Tenth Circuit found that false Forms 1099 were
material despite the defendant's argument that the amount claimed "were so
ludicrous that no IRS agent would believe them." Parsons, 967 F.2d at
455. On the contrary, the court explained that the very fact that the
amounts were high increased the likelihood that the Service would be
influenced by the forms' contents:
The large amounts involved do not reduce the forms to scraps of
blank paper. If anything, the reverse is the case. They cry out for
attention and it would be a blameworthy administration to ignore
them.
Parsons, 967 F.2d at 455.
Nor is it required that the false statement be one which the defendant was
obligated by statute or regulation to make. United States v. Hutchison,
22 F.3d 846 (9th Cir., 1993) (rejected argument that false Forms 1099-S were not
material because defendant was not required to file them). Moreover, as stated
above, the federal agency need not actually receive the statement. United
States v. Hooper, 596 F.2d 219, 223 (7th Cir. 1979). Simply stated, "[t]he
false statement must . . . have the capacity to impair or pervert the functioning
of a government agency." Lichenstein, 610 F.2d at 1278.
Likewise, proof of pecuniary or property loss to the government is not
necessary. Lichenstein, 610 F.2d at 1278-79. For example, the fact that
the government had begun its own tax investigation did not make the defendant's
statements regarding income tax entries immaterial to a section 1001 prosecution.
United States v. Schmoker, 564 F.2d 289, 291 (9th Cir. 1977).
Prior to 1995 there was a split in the circuits as to whether "materiality"
was a question of law for the court or a question of fact for the jury. The
Fourth, Fifth, Sixth, Eighth, and Eleventh Circuits had held that materiality was
a question of law. Grizzle, 933 F.2d at 948; United States v.
Rigdon, 874 F.2d 774, 779 (11th Cir. 1989); Fern, 696 F.2d at 1274;
Baker, 626 F.2d at 514 n.4; United States v. Hicks, 619 F.2d 752,
758 (8th Cir. 1980). The Ninth and Tenth Circuits, on the other hand, had found
that materiality was a factual question.
The Supreme Court in United States v. Gaudin, 515 U.S. 506 (1995),
decided this issue and held that materiality is a question for the jury. In
Gaudin, the defendant had been convicted of making false statements on
Department of Housing and Urban Development loan documents, in violation of 18
U.S.C. § 1001. The trial court instructed the jury that materiality was a
question of law for the court. The Supreme Court, in rejecting this holding,
employed the following syllogism:
The Constitution gives a criminal defendant the right to demand that a
jury find him guilty of all the elements of the crime with which he is
charged; one of the elements in the present case is materiality: [the
defendant] therefore had a right to have the jury decide materiality.
In Gaudin, the Court did not address the issue of whether
materiality is an element of any § 1001 offense. Rather, the parties agreed
that materiality was an element of the offense under § 1000. Gaudin,
515 U.S. at 509.
24.07 WILLFULNESS
To establish a section 1001 violation, the government must prove that the
defendant acted knowingly and willfully. United States v. Hildebrandt,
961 F.2d 116, 118 (8th Cir. 1992). As used in section 1001, the term "willful"
simply means that the defendant did the forbidden act (e.g., made a false,
fictitious, or fraudulent statement) deliberately and with knowledge.
Hildebrandt, 961 F.2d at 118.
The government need not prove an intent to deceive. United States v.
Yermian, 468 U.S. 63, 69, (1984); United States v. Arcadipane
41 F.3d 1, 5 (1st Cir. 1994); Hildebrandt, 961 F.2d at 118; see
United States v. Ranum, 96 F. 3d 1020, 1027-1029 (7th Cir. 1996)
Nor need the government prove that the defendant had actual knowledge of federal
agency jurisdiction -- i.e., knowledge that the statements were made
within federal agency jurisdiction. Yermian, 468 U.S. at 69, 73;
Hildebrandt, 961 F.2d at 118-19. Furthermore, several courts have held
that the element of knowledge can be satisfied by proof of "willful blindness"
or "conscious avoidance." United States v. Evans, 559 F.2d 244,
246 (5th Cir. 1977); United States v. Abrams, 427 F.2d 86, 91 (2d Cir.
1970).
For a further discussion of willfulness, see, e.g., Sections
8.06, supra, and 40.09, infra.
24.08 DEFENSES
24.08[1] Exculpatory No Doctrine
Due to the sweeping language of this statute and the potential for
governmental abuse, many courts had created an exception to prosecution which was
commonly referred to as the "exculpatory no" doctrine. This judicially-created
doctrine prohibited the government from prosecuting individuals who had done
nothing more than provide negative responses to questions put to them in the
course of a federal criminal investigation.[FN3] However, the Supreme Court, in
Brogan v. United States, 522 U.S.398 (1998), eliminated this avenue of
defense for potential defendants.
Until Brogan, the courts had failed to formulate a single cohesive
test concerning the doctrine's applicability. It had, however, been accepted by
the First, Fourth, Seventh, Eighth, Ninth, Tenth and Eleventh Circuits. See
Moser v. United States, 18 F.3d 469, 473-74 (7th Cir. 1994); United
States v. Taylor, 907 F.2d 801, 805 (8th Cir. 1990); United States v.
Cogdell, 844 F.2d 179, 183 (4th Cir. 1988); United States v. Tabor,
788 F2d 714, 717-19 (11th Cir. 1986); United States v. Fitzgibbon, 619
F.2d 874, 880-81 (10th Cir. 1980); United States v. Rose, 570 F.2d 1358,
1364 (9th Cir. 1978); United States v. Chevoor, 526 F.2d 178, 183-84 (1st
Cir. 1975).
The Second, Third, Sixth, and D.C. Circuits had neither adopted nor
rejected the "exculpatory no" doctrine. See United States v. LeMaster,
54 F.3d 1224, 1229-1230 (6th Cir. 1995); United States v. Barr, 963
F.2d 641, 647, (3d Cir. 1992); United States v. White, 887 F.2d 267, 273
(D.C. Cir. 1989).
The Fifth Circuit, which had been the first to adopt the doctrine in
Paternostro v. United States, 311 F.2d 298 (5th Cir. 1962), was the
only circuit to reject it. In United States v. Rodriguez-Rios, 14 F.3d
1040 (5th Cir. 1994) (en banc), that Court concluded that there was no
support for the doctrine in either statute or reason.
The Fourth, Eighth and Ninth Circuits had adopted a five-part test to
determine the doctrine's applicability:
1. the false statement must be unrelated to a privilege or claim
against the government;
2. the declarant must be responding to inquiries initiated by a
federal agency or department;
3. a truthful answer would involve self-incrimination;
4. the government agency's inquiries must not constitute a
routine exercise of administrative as opposed to investigative
responsibility; and,
5. the false statement must not impair the basic functions
entrusted by law to the agency.
Cogdell, 844 F.2d at 179, 183; Taylor, 907 F.2d at 805-7; United
States v. Becker, 855 F.2d 644, 646 (9th Cir. 1988) (citing United States
v. Medina de Perez, 799 F.2d 540 (9th Cir. 1986)). Because the test was
phrased in the conjunctive, the doctrine was only invoked where the false
statement was thought to interfere with an agency's functions and when a
truthful response would have incriminated the defendant. Becker, 855 F.2d
at 646; see also United States v. Morris, 741 F.2d 188, 191
(8th Cir. 1984) ("exculpatory no" doctrine does not apply where an affirmative
response to an IRS inquiry would not have involved possible self-incrimination);
United States v. Myers, 878 F.2d 1142, 1144 (9th Cir. 1989) ("exculpatory
no" doctrine applied to statements made in response to Secret Service inquiries,
but not to FAA inquiries concerning the same incident).
This five-part test was explicitly rejected by the Sixth Circuit. United
States v. Steele, 933 F.2d 1313, 1320 (6th Cir. 1991) (en
banc). That court expressed concerns relating to the sweeping language of
the statute and concluded that these concerns did not legitimize the broad
exception to the statute created by the five-part test, noting that the
materiality requirement of the statute reasonably limited its applicability. In
addition, the court noted that the mechanism of prosecutorial discretion upon
which Congress appeared to have primarily relied was a valid means of limiting
the potential application of the statute. Steele, 933 F.2d at 1321.
With Brogan, the Supreme Court ended the debate by affirming the
Second Circuit's decision, holding that "no" is a statement within the statute's
phrase "statements or representations". Brogan was an officer of a local union
which represented workers at JRD Management Corporation. Labor Department and IRS
agents conducted a search of JRD and seized records that showed bribes paid to
Brogan, among others. After the search, and without prior notification, Labor and
IRS agents went to Brogan's home. They told him that they were seeking his
cooperation, and, if he decided to cooperate, he should retain a lawyer to
contact the United States Attorney's office. They then asked if he would answer
some questions, and he agreed. They asked if he had received any payments from
JRD, and he replied, "no." They then, for the first time, told him that they had
seized records which indicated that he had been paid by JRD, and they informed
him that it was a criminal offense to lie to federal investigators. Brogan did
not amend his answer and the interview was soon terminated. United States v.
Wiener, 96 F.3d 35, 36 (2d Cir. 1996), aff'd. sub nom., Brogan v.
United States, 522 U.S. 398 (1998).
Brogan was convicted in the Southern District of New York of unlawfully
receiving money from an employer and of making a false statement to federal
agents. On appeal, the Second Circuit was squarely presented with the exculpatory
"no" doctrine for the first time (all prior cases had presented additional facts
which had allowed the Court to postpone addressing the doctrine) and held that
"no" is a statement within the statute's phrase, "statements or representations."
The Court reasoned that the disjunctive phrasing indicated that there was no
Congressional intention to limit the application of the statute to so-called
"aggressive or inducing statements only." Wiener, 96 F.3d 38, n.2..
In the Supreme Court, Brogan conceded that his statement was false, and was
made "knowingly and willfully." He conceded, therefore, that under a literal
reading of the statute, he would lose. The Supreme Court stated that "the plain
language of §1001 admits of no exception for an 'exculpatory no,' " and
affirmed the Second Circuit. Brogan, 522 U.S. at 408.
The issue of willfulness remained unresolved by the Supreme Court's
decision in Brogan, because Brogan conceded that he had acted willfully.
However, the Second Circuit strongly indicated that, in Section 1001
cases, the willfulness element would require proof of knowledge that it was a
crime to lie to federal agents in the course of their investigation. The Second
Circuit also noted that the fact-finder might be influenced by whether the
declarant was taken by surprise or had time to consider the gravity of the
situtation in deciding willfulness. Wiener, 96 F.3d at 40.
24.08[2] Wrong Statute Charged
In United States v. Fern, 696 F.2d 1269 (11th Cir. 1983), the
defendant argued that the enactment of 26 U.S.C. § 7207 made section 1001
inapplicable to a situation involving false statements made to the Internal
Revenue Service. See Section 16.00 supra, for a discussion on
section 7207. Since section 7207 is a misdemeanor and section 1001 is a felony,
the argument is an important one. Although the Eleventh Circuit indicated a
preference for specific statutes and noted that section 1001 is the more general
statute and provides for a greater penalty, the court held that the government
still may choose to prosecute under section 1001 when a false statement has been
made to the Internal Revenue Service. Fern, 696 F.2d at 1273-74.
A similar argument was raised by the defendant in United States v.
Greenberg, 268 F.2d 120 (2d Cir. 1959). There, the defendant claimed that he
should have been prosecuted under the perjury statute, 18 U.S.C. § 1621,
instead of section 1001, for aiding and abetting the submitting of false payroll
reports to the Navy. The court held that the government was not barred from
prosecuting under section 1001 merely because it also could have proceeded under
section 1621: "a single act or transaction may violate more than one criminal
statute . . . [and] the government had the authority to decide under which
statute the offenses here were to be prosecuted." Greenberg, 268 F.2d at
122. See also United States v. Hughes, 964 F.2d 536
(6th Cir. 1992) (double jeopardy did not prevent multiple convictions for section
1001 and 26 U.S.C. § 7204 for filing false Forms W-2); United States v.
Bilzerian, 926 F.2d 1285 (2d Cir. 1991); United States v. Hajecate,
683 F.2d 894 (5th Cir. 1982) (government has discretion to choose between section
1001 and 26 U.S.C. § 7206); United States v. D'Amato, 507 F.2d 26,
29 (2d Cir. 1974).
24.08[3] Variance
In United States v. Lambert, 501 F.2d 943 (5th Cir. 1974), the
defense of variance between the charge and the proof was upheld, and the
indictment was dismissed. The indictment specified certain false statements that
the defendant allegedly made, but the evidence at trial did not establish that
the defendant had made those specific statements. This decision emphasizes the
need to use the precise false statements made when drafting charges and not to
utilize generic language or a summary.
24.09 VENUE
Venue in a section 1001 prosecution lies where the false statement was
made, where the false document was prepared and signed or where it was filed or
presented. United States v. Bilzerian, 926 F.2d 1285, 1301 (2d Cir. 1991);
United States v. Mendel, 746 F.2d 155, 165 (2d Cir. 1984); United
States v. Herberman, 583 F.2d 222, 225-27 (5th Cir. 1978). See
United States v. Greene, 862 F.2d 1512, 1515 (11th Cir. 1989); United
States v. Wuagneux, 683 F.2d 1343, 1356 (11th Cir. 1982). The general venue
statute, 18 U.S.C. § 3237(a), provides that any offense "begun in one
district and completed in another . . . may be prosecuted in any district in
which such offense was begun, continued, or completed." Thus, in the case of a
scheme, venue should lie where any overt act in furtherance of the scheme
occurred.
In a case where the false statements were forged endorsements on tax refund
checks, it was held that venue was proper in the district where the defendant
deposited the checks into his bank account. Gilbert v. United States,
359 F.2d 285, 288 (9th Cir.1966); but see Travis v. United States,
364 U.S. 631 (1961) (venue was proper only in the district where the false
document was filed since another federal statute provided that criminal penalties
would attach for false affidavits on file with the National Labor Relations
Board, and therefore, there was no federal jurisdiction until the NLRB actually
received the affidavit); United States v. DeLoach, 654 F.2d 763, 766-767
(D.C. Cir. 1980) (limiting Travis to its facts).
Venue need only be established by a preponderance of the evidence, and not
by proof beyond a reasonable doubt. Furthermore, such proof can be by
circumstantial evidence alone. Direct evidence is not required. Wuagneux,
683 F.2d at 1356-57.
24.10 STATUTE OF LIMITATIONS
The statute of limitations is five years for prosecutions under section
1001. 18 U.S.C. § 3262. The statute of limitations starts to run when the
crime is completed, which is when the false statement is made or the false
document is submitted. United States v. Roshko, 969 F.2d 9, 12 (2d Cir.
1992). See United States v. Smith, 740 F.2d 734, 736 (9th Cir.
1984).
FN 1. The False Statement Accountability Act of 1996 changed the language
of this statute, which previously provided, "Whoever in any manner within the
jurisdiction, of any department or agency of the United States . . . ." The 1996
law overturned the Supreme Court's decision in United States v.
Hubbard, 514 U.S. 695 (1995), which held that Section 1001 prohibits
only false statements made as to the executive branch, not to the judicial or
legislative branches. The Act overruled Hubbard and extended the
application of Section 1001 to false statements or entries on any matter within
the jurisdiction of the executive, legislative or judicial branch of the federal
government. However, the law specifically provides that this prohibition does not
apply to a party to a judicial proceeding, or to that party's counsel, for
statements, representations, or writings and documents submitted by such a party
or counsel to a judge or magistrate in that proceeding.
FN 2. Changed to 18 U.S.C. Section 3571, commencing November 1, 1986.
FN 3. An early Fifth Circuit case, Paternostro v. United States, 311 F.2d
298 (5th Cir. 1962), sketched out the contours of the doctrine. In that case, a
police lieutenant was asked a series of questions by an IRS Special Agent about
his knowledge of graft within the police department. His answers were essentially
negative responses:
[H]e made no statement relating to any claim on his behalf against the
United States or an agency thereof; he was not seeking to obtain or retain
any official position or employment in any agency or department of the
Federal Government; and he did not aggressively and deliberately initiate
any positive or affirmative statement calculated to pervert the legitimate
functions of Government. At most, assuming that appellant's answers to the
agent were proved to be false by believable and substantial evidence,
considering all he said, the answers were mere negative responses to
questions propounded to him by an investigating agent during a question
and answer conference, not initiated by the appellant.
Paternostro, 311 F.2d at 305.
