False Statements

 At the end of 2001, she sold ImClone stock after allegedly receiving inside information that the company's CEO was dumping all his stock. Federal agents conducted a criminal investigation into securities fraud and questioned Stewart. The government stated that Stewart lied about receiving (and acting upon) this inside information.

In 2004, a jury convicted Stewart of making false statements to federal officials (among other felony charges). The criminal case went to trial in federal court. The court sentenced her to five months in a minimum-security federal prison, followed by five months of home confinement and two years on probation.

Making false statements to federal officials is a crime against the government. Like the crime of perjury, the false statements offense undermines the functions of government.

This article focuses on the federal law prohibiting the willful making of false statements to federal officials. It discusses the elements of the offense and common penalties.

False Statements and the United States Code

The code section criminalizing untrue statements to federal officials can be found at 18 U.S.C. § 1001. It makes providing false information to a government agent a federal crime. The law states that "whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully" does any of the following has committed a criminal offense:

• Falsifies, conceals, or covers up by any trick, scheme, or device a material fact
• Makes any materially false, fictitious, or fraudulent statement or representation
• Makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry

False statement charges represent a process offense. The offense interferes with the procedures of the justice system. Examples may involve false statements made in a federal investigation of the Federal Bureau of Investigation (FBI) or the Securities and Exchange Commission (SEC). False claims before any federal agency can bring scrutiny. Lying to Internal Revenue Service (IRS) agents or Drug Enforcement Administration (DEA) officials can also lead to charges.

In some cases, a suspect in a white-collar crime case, like embezzlement or money laundering, won't be convicted of (nor even charged with) the underlying crime. But they still may be convicted of lying about the conduct. For example, Stewart was never charged with insider trading. Still, the jury convicted her of making false statements to FBI and SEC officials about her dubious stock transactions.

Federal false statements law may also be relevant during legislative hearings before the United States government. This can include hearings before the House or Senate. It may get raised in interviews with Food and Drug Administration (FDA) officials or federal agents investigating terrorist plots. The code specifically refers to administrative matters, investigations, reviews, and congressional hearings. It doesn't apply to statements of a party or their attorney in judicial proceedings. Of course, falsification in court proceedings may lead to perjury charges.

Criminal liability may attach if you say the wrong thing to federal officials. So, many witnesses contacted by federal investigators or congressional staffers may seek legal advice. They may talk to a criminal defense attorney before cooperating with an inquiry.

Making False Statements: Elements of the Crime

The U.S. Department of Justice (DOJ) has the authority to bring federal criminal charges in this area. It considers whether making false claims or providing false information to the government rises to a criminal act. Federal law enforcement may meet with DOJ attorneys before seeking an indictment.

To get a conviction, federal prosecutors must prove beyond a reasonable doubt that the:

1. The defendant made a false statement or used written documents or materials containing a false statement;
2. The defendant did so during a procedure (such as a hearing or interview);
3. It is within the jurisdiction of a government agency or department (such as the FBI or the U.S. Senate);
4. The defendant acted willfully; and
5. The statement was material to the business of the government agency or department (i.e., relevant to, and with the potential to influence, its decisions or activities)

Penalties Upon Conviction

Anyone convicted of making false statements in violation of the federal statute faces a prison term of up to five years or fines and costs. If the offense involves terrorism, penalties can increase. In that situation, a conviction can lead to eight years in prison or fines and costs.

Obstruction of Justice

A review of the criminal cases involving false statement charges often produces other charges. One common charge is obstruction of justice. In an obstruction case, the defendant takes some affirmative act beyond making a false statement to a government official. They may try to conceal or cover up evidence. They may tamper with evidence to prevent its use. They may also engage in a misrepresentation of the facts relevant to a criminal investigation.

The federal crime of obstruction of proceedings is located at 18 U.S. Code § 1505. It provides for similar penalties to the offense of making false statements.

Arrested for Making False Statements? Get Legal Help

The punishments for making false statements to the federal government can be severe. Considering the potential consequences, you will want to get legal advice. You can make a phone call and get help. A federal criminal defense attorney experienced in these matters can discuss your options.