If you ask people why Martha Stewart went to jail, many will say insider trading. And if you ask others what crime Scooter Libby committed, most will say breaching national security by disclosing the name of a covert C.I.A. agent. In both instances, they would be wrong. While Stewart and Libby were investigated for those crimes, they were primarily convicted of making false statements to government agents, the same crime to which President Trump’s former campaign aide George Papadopoulos recently pled guilty.
Here is an overview of the law that the white collar bar simply calls “one thousand and one” and, more importantly, a few cautionary tales to keep in mind.
Subsection (a) of 18 U.S.C. § 1001 prohibits a person “in any matter within the jurisdiction of the executive, legislative, or judicial branch” of the federal government from “knowingly and willfully” (1) falsifying, concealing or covering up “by any trick, scheme, or device a material fact;” (2) making any materially “false, fictitious, or fraudulent statement or representation;” or (3) making or using “any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry…” And 18 U.S.C. § 1505 and 18 U.S.C. § 1512 similarly prohibit corruptly obstructing, influencing or impeding any official proceeding, or attempts to do so. There is no question that the words of these statutes are awfully broad.
1001 Violations are Different from Perjury
Anyone who has served on a jury or seen a courtroom show on TV knows that, when taking the stand, witnesses swear to tell “the truth, the whole truth and nothing but the truth.” If they break this oath, perjury charges follow. This isn’t a big surprise; an oath has little effect if breaching it is not punished.
The primary difference between perjury and laws like 1001? Perjury comes with this pre-warning in the form of the oath to tell the truth. With 1001, there’s no such pre-warning. If two F.B.I. agents approach you and immediately start asking questions in a seemingly friendly, relaxed manner, your telling a lie can lead to 1001 charges. And the lie does not need to be overt or complex; it can sometimes be falsely denying something or intentionally creating a misimpression. The fact that your discussion is not under oath – and that the agents haven’t said that lying to them may be a crime – does not absolve you of a criminal violation.
The Lie Does Not Need to Be Made to the Government
Nowhere in the 1001, 1505 or 1512 statutes does it say the falsehood must be told directly to a government agent. If you lie to a lawyer conducting an internal investigation who advises that what you say may later be shared with the government and then does so, you could have a problem in certain federal districts.
For example, let’s say a whistleblower claims that Medicare fraud is happening at the medical services provider where you work as a billing specialist. The company hires a lawyer to conduct an internal investigation and, as a result, you sit for an interview. You can tell the questions are targeting the company’s billing manager, your supervisor and good friend. Wanting to protect your friend and not be a “snitch,” you deny he told you that he was under enormous pressure to meet revenue targets and, as a result, he artificially-inflated the bills sent for Medicare reimbursement. Some of your dialogue with the billing manager was by text message on company-issued cell phones, and the lawyer accesses the texts where the fraud was discussed. The company directs the lawyer to submit all evidence to the government – including evidence showing your dishonesty – so the company can get cooperation credit. Conduct such as this has resulted in indictments and guilty pleas.
The Government Won’t Waste Their Time on a Small Fish Like Me
This is a classic error lots of people make. Yes, it’s true that the government may not want you – they may want the C.E.O. or some other high profile target. But you may be integral to building the case against that person. And one easy way to get you on “Team Government” is to threaten criminal prosecution if you don’t wear a listening device, submit to an interview or otherwise assist in their investigation. After all, few people had heard of George Papadopoulos until recently. The unavoidable conclusion to draw from his guilty plea – and the facts and circumstances surrounding it – is that the government pursued Papadopoulos to induce his assistance in Special Counsel Bob Mueller’s investigation of bigger fish.
If I Didn’t Commit the Underlying Crime, I Can’t Be Charged with Making False Statements
This is incorrect. Papadopoulos and Martha Stewart and many others have not been charged with the crime for which they were being investigated. The reasons why prosecutors make charging decisions are complex and case specific. In some instances, prosecutors decide to pursue the low-hanging fruit and indict someone for lying. In others, the defendant did not do anything wrong and lied to protect someone else – that lie set the investigation back many months. But regardless, the scope and breadth of the law can easily ensnare the unwary. Having a discussion with federal agents investigating a crime, no matter if it’s at F.B.I. headquarters, at Starbucks or in your driveway, is serious business and can have life-altering consequences. As U.S. Supreme Court Justice Ruth Bader Ginsburg wrote, 1001 provides prosecutors with “extraordinary authority” and “may apply to encounters between agents and their targets ‘under extremely informal circumstances.’”