Overview
In a unanimous decision in Thompson v. United States, 604 U.S. ___ (2025), issued last month, the US Supreme Court held that 18 U.S.C. § 1014, which criminalizes "knowingly mak[ing] any false statement or report" to certain institutions and agencies, does not criminalize statements that are merely misleading but are not false. The ruling represents the latest setback to the US Department of Justice's efforts to prosecute white collar crime, following other significant rulings by the Roberts Court, including:
- Skilling v. United States, 561 U.S. 358 (2010), holding that the federal honest-services fraud statute, 18 U.S.C. § 1346, covers only bribery and kickback schemes;
- McDonnell v. United States, 579 U.S. 550 (2016), holding that under 18 U.S.C. § 201(a)(3), a federal antibribery provision, "setting up a meeting, calling another public official, or hosting an event does not, standing alone, qualify as an 'official act'";
- Kelly v. United States, 140 S. Ct. 1565 (2020), holding that a scheme that does not aim to obtain money or property could not have violated the federal-program fraud or wire fraud statutes; and
- Ciminelli v. United States, 143 S. Ct. 1121 (2023), holding that the federal wire fraud statute criminalizes schemes to deprive people of traditional property interests but not of "potentially valuable economic information necessary to make discretionary economic decisions."
Thompson is the latest in this series of decisions narrowing federal prosecutors' ability to prosecute fraud cases — and the Court may not be done, even this term. The Court's 2024–2025 docket also includes Kousisis v. United States, in which the Court will consider whether the federal wire fraud statute applies to deception that causes the victim no financial harm.
Thompson Holds That "False" Does Not Mean "Misleading"
Patrick Thompson, a former Chicago alderman and the nephew and grandson of two former Chicago mayors, took out three loans from now defunct Washington Federal Bank for Savings, totaling $219,000. Thompson only signed the paperwork for the first loan, worth $110,000, but did not sign any documentation for the other two. After Thompson made only one payment on the loans in 2012, the bank failed and Mr. Thompson received an invoice from an FDIC-appointed servicing agent for the remaining $269,120.58 balance and interest on the loans.[1] On two occasions, Thompson told the servicer that he borrowed $110,000 from the bank (the amount of the first loan), failing to mention the other two loans.[2]
Thompson was subsequently indicted under § 1014 for two counts of making false statements to the FDIC.[3] A jury found Thompson guilty on both counts in district court and Thompson moved for a new trial or acquittal arguing that a "conviction for false statements cannot be sustained where, as here, the alleged statements are literally true, even if misleading."[4] The district court denied the motion, and the Seventh Circuit affirmed, both relying on United States v. Freed, an earlier Seventh Circuit case holding that § 1014 criminalizes misleading representations.[5] Both courts acknowledged the Sixth Circuit's contrary holding in United States v. Kurlemann, which held that § 1014 convictions cannot be based on material omissions or implied misrepresentations.[6]
The Supreme Court granted certiorari on the case and heard oral arguments in January 2025. In its opinion, the Court sided with the Sixth Circuit, holding that § 1014 can apply to misleading statements only when those statements are also false. Chief Justice Roberts pointed to the statute's text, which prohibits knowingly making "any false statement or report," noting that logically a statement can be misleading yet factually true.[7] To clarify, the Chief Justice pointed to examples of misleading but true statements offered by the government at oral argument: a tennis player who says she "won the championship" when her opponent forfeited, and a doctor who tells a patient, "I've done a hundred of these surgeries," when 99 of those patients died. Misleading, but not false.[8] Yet "the statute uses only the word 'false,'" and "[i]f that word means anything, it means 'not true.'"[9] However, the Court declined to affirm on the basis that Thompson's statements were false, observing that neither lower court had answered that question, and instead remanded for a determination of whether a reasonable jury could find that Thompson's statements in this case were false.[10]
Justices Alito and Jackson filed concurring opinions agreeing that the jury was properly instructed that a guilty verdict may arise only from a finding that Thompson made a false statement. Justice Jackson noted that on remand "there is little for the Seventh Circuit to do," given the jury's guilty verdict with that instruction.[11]
Prosecutors Now Face an Additional Hurdle in False Statement Cases—With Another on the Horizon
Section 1014 has become a commonly used tool for prosecutors; popular because it does not require a showing of materiality. However, the plain reading of the law adopted by the Court in this case could present prosecutors with additional challenges in successfully bringing § 1014 cases, as they must now prove that the defendant made a statement that was not only misleading but literally false.
Prosecutors' toolbox may be further emptied by Kousisis v. United States,[12] which is also currently before the Supreme Court. In Kousisis, the defendant's company completed the work it was contractually obligated to handle, but it did not meet the requirement that a percentage of subcontracts go to disadvantaged business enterprises. If the Court holds that a fraud prosecution is improper where the fraudulent inducement caused no economic harm, prosecutors will be further hamstrung in their efforts to bring white-collar fraud prosecutions. Considering the united front the Court presented in Thompson, the scope of federal white-collar fraud prosecution may well be further narrowed this term.
[1] Thompson v. United States, 604 U.S. ___, No. 23-1095, slip op. at 2 (Mar. 21, 2025).
[2] Id.
[3] Id. at 3.
[4] Id. at 3.
[5] Id. at 3-4 (citing United States v. Freed, 921 F.3d 716 (7th Cir. 2019)).
[6] Id. (citing United States v. Kurlemann, 736 F.3d 439 (6th Cir. 2013)).
[7] Thompson, No. 23-1095, slip op. at 4.
[8] Id.
[9] Id.
[10] Id. at 9.
[11] Thompson, No. 23-1095, slip op. at 17 (Jackson, J., concurring).
[12] 82 F.4th 230 (3d Cir. 2023), cert. granted, 144 S. Ct. 2655 (2024) (No. 23-909).
