DOJ Shifts Stance On False Statements Prosecutions

Joel Athey and Vince Farhat are Partners and Nicholas Melzer is Senior Counsel in the Los Angeles office

A Change That Could Have a Major Impact on Future White Collar Investigations and Prosecutions

HIGHLIGHTS:

The U.S. Department of Justice (DOJ) recently adopted a more defense-friendly position on criminal prosecutions under a commonly used federal charging statute, Section 1001. This statute makes it a crime to "knowingly and willfully" give false statements in any matter under federal jurisdiction. In recent court filings, DOJ has quietly clarified that in order to prove a defendant acted willfully, federal prosecutors must show beyond a reasonable doubt that the defendant knew his or her statement was unlawful - not just that the statement was false. This is a material change in the government's position that could have a significant impact on future white collar investigations and prosecutions involving Section 1001. The U.S. Department of Justice (DOJ) recently adopted a more defense-friendly position on criminal prosecutions under a commonly used federal charging statute, False Statement to Government Agency, 18 U.S.C. §1001 ("Section 1001"). To be convicted under Section 1001, a person must act "willfully" in making false statements to federal investigators. Courts are divided over whether Section 1001's "willfulness" element requires proof that the defendant knew his or her conduct was unlawful. However, in recent court filings, DOJ has quietly clarified that in order to prove a defendant acted willfully, federal prosecutors must show beyond a reasonable doubt that the defendant knew his or her statement was unlawful - not just that the statement was false. This is a material change in the government's position that could have a significant impact on future white collar investigations and prosecutions involving Section 1001.

False Statements to Government Agencies

Section 1001 makes it a crime to "knowingly and willfully" give false statements in any matter under federal jurisdiction.1 Defendants convicted under Section 1001 face a maximum of five years in prison and up to $250,000 in criminal fines.2 Section 1001 has ensnared numerous high-profile defendants, including Martha Stewart and former Illinois Governor Rod Blagojevich. These prosecutions fit into the category that the "cover up is worse than the crime," which is often the case where a white collar defendant is acquitted or not charged with the underlying offense, but...