Which number is larger, (1) the number of “tall tales” told monthly by fishermen, used-car salesmen, Santa Claus impersonators, and stand-up comedians or (2) the number of federal statutes making it a crime to tell a fib? You might reflexively choose number 1, and you might be right, but there is no guarantee. The reason is that over the past century-plus, Congress has enacted dozens of separate laws making it a crime to utter a “false statement” even though the general false statements statute covers any untruth of any remotely legitimate concern to the federal government.
The ubiquity of false statement laws creates the risk that a person can be charged with multiple offenses and, if convicted, sentenced to consecutive terms of imprisonment for what, in reality, was a single false statement. A separate problem involves the risk that unwitting people will be ensnared by the false statements laws, as was marine biologist Nancy Black. As explained below, Black received a false statements charge as a “thank you” for voluntarily providing an edited video of noisemaking on a whale-watching tour to federal investigators.
There is a way to address this problem: Repeal superfluous false statement laws and revise the False Statements Act (18 U.S.C. § 1001) to restore the original intent behind the law. Instead of enacting new false statement laws, Congress could express its policy determinations that some false statements are more serious than others by directing the U.S. Sentencing Commission to grade the severity of false statements to help district court judges decide an appropriate punishment under the general False Statements Act in a manner similar to what Congress has done for false statements that involve an act of terrorism. That approach would reduce the risks of overcriminalization and oversentencing without preventing the Department of Justice from protecting against the harms of false statements. Such reforms would also indicate that Congress is taking the problem of overcriminalization seriously.
The History of the Law of False Statements
False or deceptive statements have existed since man walked in Eden. Everyone has succumbed at one time or another (“The dog ate my homework, really.”). People rationally “detest falsehood” but would not anticipate or desire that every white lie, whopper, or old wives tale should be treated as a crime. We generally expect that some people (think the ones on Capitol Hill, Pennsylvania Avenue, or Madison Avenue) will occasionally (regularly?) stretch the truth (utter bald-faced lies?), and we ordinarily require that some harm result from a lie. Lying to a coworker about your weight generally harms no one, but lying to the NASA technician fitting you for a space suit might. Context matters.
So it was at English common law. Only lies that were made as part of a scheme to obtain another person’s property and that “by some material device or token ‘against which common prudence and caution could not guard’” were considered criminal. The common law treated “mere verbal representations” as “insufficient to constitute common law cheats.” Buyer beware, it seems, was the prevailing rule of thumb. The expectation was that people could and should avoid the average, everyday swindle by exercising common sense and due diligence.
That doctrine changed over time as more complex commercial relations arose. In 1757, Parliament expanded the scope of criminal liability for lies far more broadly than the common-law doctrine in order to punish anyone “who knowingly and designedly, by false pretence” obtains “from any person…money, goods, wares, or merchandizes, with intent to cheat or defraud any person.” That statute created the “modern” and farther-reaching criminal prohibition of taking property from another by false pretense. The late Pennsylvania law Professor Arthur R. Pearce observed that English courts applied the statute only rarely and did not give it full effect until 30 years after its enactment. Yet every American jurisdiction followed that development over time. The Pennsylvania legislature called the offense “cheating by fraudulent pretenses”; Texas dubbed it “swindling”; Rhode Island, “cheats”; and Illinois, “the confidence game.”
Congress first made it a crime to obtain property by lying in 1863 when it passed the False Claims Act. The act was designed to combat unscrupulous contractors who had defrauded the Union Army during the Civil War, when suppliers and purchasing agents frequently sold faulty and inaccurate counts of guns, livestock, and other provisions. President Lincoln had urged Congress to create “[a]n Act to prevent and punish Frauds upon the Government of the United States” in order to prohibit the filing of “false, fictitious, or fraudulent” monetary claims against the government. Congress responded with the False Statements Act.
That act gave Honest Abe a new tool with which to punish procurement fraud, although it covered much the same conduct as the long-standing common-law prohibition against fraud. This new act appears to have been novel only insofar as it specifically identified the government as the party being protected from deceptive schemes designed to loot the Treasury for financial benefit.
The concept was largely unchanged until the New Deal’s outburst of regulatory programs and new agencies, when requirements for the self-reporting of information to the government increased with expansive government programs. When individuals gave inaccurate information about their market transactions to the U.S. government, it bedeviled the Administration’s efforts to command and control the economy. In 1933, Congress enacted the National Industrial Recovery Act (NIRA) as a measure to fix the Great Depression through extensive economic regulations. The law authorized then-President Franklin Roosevelt to exercise broad legislative authority over petroleum markets, including the power to prohibit any production or transportation of oil “in excess of” then-existing state quotas, which Congress had made into a federal crime. “Hot oil” was the term used to describe any oil produced, transported, or sold unlawfully outside of regulated channels. In Texas, the governor had to impose martial law to end the oil rush.
President Roosevelt delegated to the Secretary of the Interior the rulemaking powers over hot oil that Congress had vested in him. The Secretary promptly issued regulations requiring every petroleum producer, purchaser, shipper, and refiner to file monthly statements under oath with the Department of the Interior’s Division of Investigations concerning virtually all aspects of their profession related to oil—and Congress had amended the federal false statement law to make it a crime to lie. By requiring that increased regulatory filings must be made under oath concerning virtually every facet of oil production, transportation, and sales, federal law enforcement officers could investigate anyone who lied in informational filings as a means of policing the tightly regulated markets.
Congress had passed a false statement law written to reach beyond “cases where pecuniary or property loss to the government had been caused” to provide prosecutors a tool for “reaching a large number of cases” where individuals were seeking profit outside of regulated channels. To combat false reporting in other administrative arenas, Congress in 1933 began adding to the general Civil War–era statute various specialized false statement laws tailored to specific regulatory schemes. Congress also broadened the false statements statute to cover all government agencies and dropped the requirement of proof in a false statement prosecution that a defendant had some specific intent to defraud. Instead, the statute required a specific intent to make a fraudulent or false statement. Congress also removed the requirement that the falsification be made to obtain some material benefit. Although those changes have broadened the scope of conduct that the general false statements prohibition could cover (maybe Santa Claus impersonators were starting to sweat by now), the statute has faced and survived legal challenges arguing that the law is so open-textured and unintelligible that the average person cannot comprehend all of the conduct it proscribes.
The General False Statement Statute
Today, the general federal false statement statute (18 U.S.C. § 1001(a)) provides as follows:
(a) Except as otherwise provided in this section, 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 statement or representation; or (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, imprisoned not more than 5 years or, if the offense involves international or domestic terrorism (as defined in section 2331), imprisoned not more than 8 years, or both. If the matter relates to an offense under chapter 109A, 109B, 110, or 117, or section 1591, then the term of imprisonment imposed under this section shall be not more than 8 years.
Generally, courts require proof of five elements to sustain a conviction under the Act: (1) the defendant made a statement; (2) the statement was false; (3) the statement was made knowingly and willfully; (4) the statement was material; and (5) the statement was within the jurisdiction of a government department or agency. At first blush, a reader might find those elements straightforward, but the statute raises a host of questions regarding its breadth. Some federal courts have attempted to construe the statute narrowly to avoid patently unreasonable or unforeseeable outcomes; others have muddied the waters of what each element may require.
For starters, a false statement may be communicated orally or in writing. It also may be made verbally or silently or, depending on the circumstances, by omission. Second, it is not clear that a statement must be literally false rather than true but misleading. Most federal courts require a false statement to be false. That means a conviction for a false statement could not be based on a factually true answer to an ambiguous question even if the responder was attempting to mislead the government. A minority of courts disagree, however, holding that if a defendant “falsified, concealed, or covered up” unlawful acts with a statement that was true in fact but intended to mislead, that too may be a federal crime. The Supreme Court of the United States has not settled the issue, with one exception: In the case of a statements statute related to loan and credit applications, there must be some type of factual assertion made in order to have a statement that can be labeled false.
Third, what of “knowingly and willfully”? The Supreme Court has said that the intent requirement applies to the element of falsity: A defendant need not know that his false statements were being made to a federal department or agency. Fourth, how “material” must a false statement be to warrant federal criminal liability? Would you go to Leavenworth for lying to your neighbor about your weight when, unbeknownst to you, he works for the Department of the Interior or NASA? It might depend. To sustain a conviction, a false statement must possess the “natural tendency to influence or [be] capable of influencing, the decision of the decision making body to which it is addressed.” It is irrelevant whether a government official is or is not misled by the false statement. If there is a chance that a false statement could influence the federal government, then it is material even if the statement does not ultimately influence any government decision.
Finally, what does it mean to make a statement that is “within the jurisdiction” of the federal government? The Supreme Court has held that a false statement does not have to be made with actual knowledge that the statement is made to or falls under the jurisdiction of the federal government for it to be a crime. All that is required is that the statement concerns a situation in which an agency “has the power to exercise authority in a particular situation.” One defendant’s false statement in a loan application to a local bank for a loan insured under the provisions of the National Housing Act was considered “a matter within the jurisdiction of an agency of the United States.” A corporate officer of an oil distribution company was convicted under 18 U.S.C. § 1001 for falsely certifying shipments of fuel oil to be “stripper crude oil.”
Ultimately, the government could plausibly exercise jurisdiction over any statement that relates to an “official, authorized function” of a government agency. Today, the federal government exercises regulatory authority over everything from refrigerators, televisions, showerheads, and lightbulbs in your home to robbery of your home. Giving each element a broad interpretation, it is difficult to discern the limits of liability for false statements just under the general act. One would think, therefore, that the statute should be broad enough to reach any fib or whopper that the federal government could have a good reason to prosecute. But the code does not end there.
The Law of False Statements Today
While the general false statements statute is the tool that is most commonly used to prosecute lies, it is far from the only one. As of 1998, there were 215 federal statutes pertaining to false statements. These additional statutes criminalize nuanced conduct relating to providing false statements to specific government departments or about specific topics already covered by the general false statement statute. There are dozens of specific statutes penalizing false statements that regard fluid milk products; any reports or records required under the Protection of Horses Act; the Tennessee Valley Authority; government trademarks “used or devised by the Indian Arts and Crafts Board”; the loss or destruction of commercial fishing vessels or “any equipment or appurtenance which is necessary for the carrying out of fishing operations by a fishing vessel”; health care benefit plans; Medicare-funded mental health services; health maintenance organizations’ financial disclosures; “any compromise, adjustment, or cancellation of any farm indebtedness”; passport applications; immigration documents; and federally insured student loans, to name just a few.
These statutes are scattered across multiple sections of the federal code, making it hard to find them. They are also used with widely varying frequency. For instance, there are no reported prosecutions under Section 831t(b) of Chapter 16 of the U.S. Code, which criminalizes false statements made to or on behalf of the Tennessee Valley Authority. The same can be said for the statute criminalizing false statements to secure an Indian Arts and Crafts Board trademark. On the other hand, there have been over 1,000 reported cases under Section 1546 of Chapter 18, penalizing false statements in immigration documents. When a false statement is made in an immigration document, however, it is almost certainly a matter within the jurisdiction of the federal government (specifically, the United States Citizenship and Immigration Services component of the Department of Homeland Security), which seems to meet the elements of the general false statements statute.
How Many Types of False Statements Stem from One Act?
Redundancy in the federal criminal code opens the door to multiplicity problems. For example, if someone lies on an immigration form, has he made a false statement under Section 1546 related to immigration documents or the general false statements statute, Section 1001, or both? (A separate issue, addressed elsewhere, is whether he also has committed fraud.) If the person lies eight times on one immigration document, does that equal one violation of the immigration-related statute because there was one document or eight because there were eight separate lies? Because each false statement on an official immigration document may be punished by 10 years, the difference may be one of 70 or more years behind bars. If you add punishment under the general false statement statute, the result is up to another 40 years in prison. If you add fraud or conspiracy to commit fraud, if the person communicates falsehoods through mail or wire communications and seeks out some material benefit (perhaps U.S. residence), that could carry an additional 20-year prison sentence. Any deal that a prosecutor would be willing to offer might start to look very good, no matter how immaterial or obviously incredible the underlying false statement was.
A related problem that involves overlapping statutes is that an individual could be prosecuted under both, although he or she gave only one false statement. In determining whether charges subject a defendant to double jeopardy, the inquiry, adopted in Blockburger v. United States, is “whether each provision requires proof of a fact which the other does not.” It is not enough that the same conduct underlies the multiple counts; the statutory elements of the offense must be the same in each federal law for the Blockburger test to preclude a second prosecution. Congress has been able to avoid the problem by proliferating false statements statutes with just one unique element: fluid milk products, sunken fishing vessels, the Tennessee Valley Authority…the list goes on.
Consider false statements related to health care, for instance. While the general act covers any false statement within the jurisdiction of the government, the health care statute (18 U.S.C. § 1035) covers “any matter involving a health care benefit program.” Congress passed Section 1035 after urging that the “Department of Justice (DOJ) needs stronger and more direct statutory authority to deter fraud and abuse against public and private health care plans.” Due to the difference in the jurisdictional element, courts have routinely concluded that charging a defendant under both statutes for the same act does not violate double jeopardy. This is the case even though false statements related to health care benefit programs would seem to fall within the government’s jurisdiction under Section 1001, given the federal government’s claim to tremendous regulatory authority over health care.
False Statements Statutes: For When Other Charges Just Won’t Stick?
False statements statutes may also be used when the Justice Department is unable to substantiate alternate allegations. An investigation may start out, for example, based on allegations of insider trading, securities fraud, or breach of fiduciary duties. Those offenses often involve complex subject matter, costly and complex investigations and discovery, and they may be far more difficult to prove in a trial than the accusation that someone made a false statement. The false statement not only is simpler to get across to a jury (“Jurors, the defendant lied”), but also may involve a subject matter that is entirely disconnected from the alleged misconduct that underlies the investigation. If evidence of original allegations never pans out, the prosecution might salvage the investigation and get some return on their investment of time and resources by trapping defendants in a lie and charging them with making a false statement.
On the one hand, this tactic may be helpful to “simplify courtroom narratives”; on the other, however, it can lead to overzealous prosecution. As Supreme Court Justice Ruth Bader Ginsburg put it, under the false statement statutes, “the prospect remains that an overzealous prosecutor or investigator—aware that a person has committed some suspicious acts, but unable to make a criminal case—will create a crime by surprising the suspect, asking about those acts, and receiving a false denial.” Although the problem is not new, recent history provides several examples of false statement prosecutions in the wake of an investigation for other misconduct.
Consider Nancy Black’s brush with Section 1001. Fascinated with killer whales since childhood, Nancy became a professional marine science researcher in Monterey Bay and ran whale-watching boat trips. On one of those trips in 2005, the boat captain whistled at an approaching killer whale to attract the animal to stay nearby. Upon finding out about the incident sometime later, Nancy rebuked the captain, informing him that his behavior was “unprofessional.” After the captain’s then-wife asked government officials whether whistling at a whale violated the Marine Mammal Protection Act of 1972 or any other federal law, a National Oceanic and Atmospheric Administration official contacted Nancy asking for videotape of the events. Nancy handed over video showing the whistling but did not inform the investigator that the tape was edited to exclude portions of the video that showed other crew members allegedly asking passengers to make more noise. For that, Nancy was charged with impeding an investigation into the whistling and lying to the government. She asks, “I wasn’t charged with anything about the dealings with the humpback. So why would they charge me with lying about it? It makes no sense.”
It is not “altogether uncommon” for prosecutors to use false statements law to throw the book at a defendant, to stand in for other allegations for which sufficient evidence cannot be mustered, or in the rare case to prosecute people like Nancy for doing what she thought was right—even though she was not under any formal investigation at the time she handed over the videotape. Moreover, contrary to the understanding of false pretense offenses at common law and in the Civil War era, Nancy’s videotape was not offered to the government to defraud it of money or other property.
False statements are felonies that undoubtedly can be serious in their own right, but they have become so open-textured and ubiquitous in the federal criminal code as to, in the words of Justice Ginsburg, “arm Government agents with authority not simply to apprehend lawbreakers, but to generate felonies, crimes of a kind that only a Government officer could prompt.” That power should be restrained by repealing excess laws and returning to the common-law understanding of false pretense crimes as deprivations of property, not any lie or affirmative act that prosecutors, with no warning before the fact, can fashion into a violation of one of the dozens of false statements statutes.
Do we really need a separate false statement statute to address statements made to the Tennessee Valley Authority or to secure an Indian Arts and Crafts Board trademark? The lack of prosecutions under the relevant statutes makes clear that we do not. Yet these statutes linger on the books, contributing to overcriminalization and excessive punishments. Only Congress has the constitutional authority to enact the necessary reform.
Congress should stop reflexively passing new false statements statutes every time a novel false statement is uttered; repeal some of the over 150 superfluous false statements statutes; and, if necessary, revise the general false statements statute. That would reduce the risk of overprosecution without preventing the Department of Justice from protecting the public. It would also indicate that Congress is taking the problem of overcriminalization seriously.
—Paul J. Larkin, Jr., is Senior Legal Research Fellow, David Rosenthal is a Visiting Legal Fellow, and John-Michael Seibler is a Legal Fellow in the Edwin Meese III Center for Legal and Judicial Studies, of the Institute for Constitutional Government, at The Heritage Foundation.