Can Misleading but True Statements Be Prosecuted as Criminally False Statements Under 18 USC 1001(a)(2)? (3/27/25; 3/29/25)

In Thompson v. United States, ___ U.S. ___, ___ S.Ct. ___ (3/21/25), SC here and GS here, the Court held that the criminal conduct described in 18 U. S. C. §1014 relating to credit applications (“knowingly mak[ing] any false statement”) does not include misleading, but not false, statements. The opinion is relatively short, so because it is not encountered often in a tax context, I will just focus on the bottom-line holding in the prior sentence and ask that readers consider the related statute, 18 U. S. C. § 1001(a)(2), often appearing in tax prosecutions, that criminalizes “materially false, fictitious, or fraudulent statement[s].”

Does Thompson’s analysis mean that misleading statements cannot be prosecuted under § 1001(a)(2), often called the false statements crime?

The specific issue is not addressed directly in the DOJ Criminal Tax Manual Section 24.00, titled False Statements (18 U.S.C. § 1001), here. I direct readers’ attention to the discussion in Section 24.04, titled False Statements or Representations, starting on p. 4 and specifically to the discussion on p. 5 of Bronston v. United States, 409 U.S. 352 (1973), a perjury case holding that literally true but misleading statements under oath could not be prosecuted under the perjury statute. So, the question is whether literally true but misleading statements not under oath can be prosecuted under the false statements statute? As the CTM notes (p. 5), Bronston acknowledged a possible exception for a “criminally fraudulent statement” at p. 358 n. 4 as follows:

   n4 Petitioner's answer is not to be measured by the same standards applicable to criminally fraudulent or extortionate statements. In that context, the law goes "rather far in punishing intentional creation of false impressions by a selection of literally true representations, because the actor himself generally selects and arranges the representations." In contrast, "under our system of adversary questioning and cross-examination the scope of disclosure is largely in the hands of counsel and presiding officer." A. L. I. Model Penal Code § 208.20, Comment (Tent. Draft No. 6, 1957, p. 124).

In effect, vis-a-vis criminalization of misleading statements, the contexts differ where (i) the speaker is being questioned in an adversarial context where questions should be focused and misleading statements can and should be probed and (ii) the speaker is not acting in that adversarial context under oath but perhaps having more ability to control and responsibility for the narrative and its direction. Does that suggest that Bronston’s literal truth defense applicable to sworn testimony may not apply to false statements? As the CTM notes, however, the courts generally apply Bronston’s literal truth defense but construe the defense narrowly, noting e.g., that the defense “applies only where a defendant’s allegedly false statements ‘were undisputedly literally true,’” citing United States v. Sarwari, 669 F.3d 401, 406 (4^th Cir. 2012 (which quoted United States v. Thomas, 612 F.3d 1107, 1115 (9th Cir. 2010)) (collecting cases). (Caveat, the CTM misstates the defendant’s name in Sarwari as Sarawi.)

My bottom line of all this is that, I suspect the reasoning in Thompson may make the literal truth defense at least marginally more palatable in false statement cases.

ADDED 3/29/25 2:00 PM:

In my Federal Tax Procedure Book (2024 Practitioner Edition p. 317 and 2024 Student Edition p.  221), I state:

[W]hereas literal truth under oath is a defense to perjury even if the testimony is highly misleading, literally true but misleading statements may violate § 1001.

For that proposition, I cite in fn 1380 in the Practitioner Edition Peterson v. United States, 344 F.2d 419 (5th Cir. 1965). That aspect of Peterson was constrained in United States v. Moses, 94 F.3d 182, 188-89 (5th Cir. 1996) (“We cannot uphold a conviction . . . where the alleged statement forming the basis of a violation of section 1001 is true on its face.”).  Accordingly, per the CTM cited above, the Bronston literal truth defense applies to § 1001(a)(2) prosecutions. I have corrected this error in the working draft to the 2025 editions due to be published on SSRN in early August 2025.

My Federal Tax Procedure Book editions may be accessed here for download.