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March 21, 2025
Supreme Court unanimously limits reach of federal bank fraud statute to fraud in Thompson
This morning the US Supreme Court handed down a unanimous opinion in favor of a federal criminal defendant on a statutory issue in Thompson v. US, No. 23–1095 (S. Ct. March 21, 2025) (available here). The opinion for the Court, authored by Chief Justice Roberts, begins and ends this way:
Patrick Thompson took out three loans totaling $219,000 from the same bank. Later, Thompson told the Federal Deposit Insurance Corporation (FDIC) that he had “borrowed . . . $110,000” from the bank. Thompson was indicted under 18 U.S.C. §1014 for making “false statement[s]” to the FDIC. Thompson argued that his statements were not false because he had in fact taken out a loan for $110,000 just as he said. Both the District Court and the Seventh Circuit held that they did not need to consider that argument. In their view, the prohibition in §1014 against “false statement[s]” extends to misleading ones as well, and Thompson’s statements were at least misleading in failing to mention the additional loans. The question presented is whether §1014 criminalizes statements that are misleading but not false....
In casual conversation, people use many overlapping words to describe shady statements: false, misleading, dishonest, deceptive, literally true, and more. Only one of those words appears in the statute. Section 1014 does not criminalize statements that are misleading but true. Under the statute, it is not enough that a statement is misleading. It must be “false.”
The judgment of the Court of Appeals for the Seventh Circuit is vacated, and the case is remanded for further proceedings consistent with this opinion.
Justice Alito authored a four-page concurrence making a number of points, and primarily stressing that "in considering whether a statement is 'false,' judges and juries must view the statement in 'the context in which it is made'.”
Justice Jackson authored a one-page concurrence contending that, in this case, "the jury was properly instructed that it could find Thompson guilty only if the prosecution proved beyond a reasonable doubt that Thompson 'made the charged false statement[s]'.”
March 21, 2025 at 01:20 PM | Permalink
Comments
This opinion seems to be about semantics (as hinted at by the two concurrences). It reminds some of the "fact-checks" that you sometimes see from news agencies.
In a perfect world, where everybody had enough time to give thorough responses and everybody had time to review those thorough responses, we would get the full context of everything. (If you want to bore people to death, give them the full context of everything that influenced the Bill of Rights.) But we do not live in that perfect world.
What the statute seems to require and what common sense tells us is that we do expect an answer that covers what the question sought. If the party gives an incomplete answer that omits material which shows that the answer given is inaccurate is that properly characterized as misleading or false. In this case, as noted by the concurrences, it is pretty clear that it is so inaccurate as to be false. But other cases are going to be closer to the line. Relying on the minor difference between false and misleading to draw the line seems to be playing games rather than trying to figure out what Congress intended to require from applicants. Material omissions and inaccurate statements seems to be covered by what Congress wrote.
Posted by: tmm | Mar 21, 2025 1:36:57 PM
tmm, that's why securities laws cover the waterfront!!
Posted by: federalist | Mar 24, 2025 9:05:51 AM
TMM - as is evidenced by this hypo: You are asked if you ate 10 cookies and you say "I ate 7." The clear implication is that you didn't eat the other thee, but that would not be enough to convict under the narrowed actual falsity holding of Thompson.
Posted by: Da Man | Mar 26, 2025 7:32:54 PM
