Supreme Court Clarifies Scope of False Statement Liability Under Section 1014
By R Tamara de Silva for Law360
On March 21, 2025, the United States Supreme Court issued a unanimous ruling in Thompson v. United States, No. 23–1095, resolving a split among the federal circuits over the interpretation of 18 U.S.C. § 1014. 18 U.S.C. § 1014 is one of the statutes used to prosecute false statements made to influence federally insured financial institutions and agencies such as the FDIC, FHA, or SBA. At issue was whether a statement that is literally true but misleading (e.g., a half-truth or deliberate omission) can be punished as a “false statement” under § 1014.
Patrick D. Thompson is a former Chicago alderman and attorney. He was convicted under 18 U.S.C. § 1014 for making false statements to federal bank regulators about $219,000 in loans from a failed bank that he had not repaid. In one phone call with FDIC officials, Thompson claimed he had borrowed $110,000. By omitting the additional loans, he understated his total debt of $219,000.
Writing for a unanimous Court, which vacated the Seventh Circuit judgment, Chief Justice John Roberts held that 18 U.S.C. § 1014 does not extend to misleading-but technically-true statements. This long-awaited clarification narrows a statute that has been central in many white-collar prosecutions, especially those tied to mortgage fraud, COVID-19 relief applications, and other financial crimes.
Resolution of the Circuit Split
For decades, courts differed as to whether § 1014 reached deceptive “half-truths.”
Some circuits had adopted a broader interpretation, concluding that misleading omissions or statements—so long as they intended to deceive a bank, qualified as “false” under § 1014. Other circuits required a strictly literal falsehood, refusing to extend the statute to misleading statements.
Thompson v. United States stands for the narrower and plain language meaning of the statute.
While other statutes use the word misleading, § 1014 does not. This has led to disparate outcomes on similar fact patterns.
In its 2019 decision in United States v. Freed, the Seventh Circuit affirmed a conviction under § 1014 where a developer’s half-truths on loan documents- omitting known liabilities and overstating collateral- were deemed false statements.
But in United States v. Kurlemann in 2013, the U.S. Court of Appeals for the Sixth Circuit reversed the conviction of a developer who withheld details about a buyer’s so-called down payment avoided conviction because the court found that half-truths alone do not violate § 1014 absent a provably false factual assertion.
Such disparate outcomes for effectively similar conduct led commentators to bemoan a ‘geographic lottery’ in white collar enforcement. The Supreme Court’s ruling in Thompson ends that disparity by anchoring liability firmly to actual falsity.
Chief Justice Roberts’ opinion put the reasoning succinctly: Congress knows how to prohibit not only false statements but misleading ones as well as multiple federal statutes explicitly do so. Because § 1014 uses the word “false” without adding any broader language, the Court inferred a clear legislative choice to punish only statements that are actually false.
That textual analysis follows prior decisions such as Williams v. United States in 1982, which rejected § 1014 charges for writing bad checks because a check is not a factual assertion; and United States v. Wells in 1997, which limited judicial additions to § 1014’s elements.
By drawing a line at literal falsehood, the Court alleviates concerns about over-criminalizing ordinary negotiations or evasive replies in financial dealings.
Chief Justice Roberts’ Majority Opinion
Roberts’ opinion highlights three key points:
- Plain Meaning of “False”
Section 1014 punishes “knowing” false statements. Per the Court, “false” in everyday usage means “not true”—not “misleading” or “incomplete.”
Absent explicit statutory language covering omissions or half-truths, courts must stick to literal falsity.
- Contextual Clarity in Federal Statutes
Many statutes across Title 18 include terms like “fraudulent,” “fictitious,” or “misleading” to cover a broader range of deceptive acts.
Section 1014’s singular focus on “false” shows that Congress did not want to criminalize every possible form of deception, only outright factual misstatements. Congress could have used the word misleading, as it had in other statutes, if this had been its intention.
- Existing Precedent & Legislative Intent
The Court relied heavily on Williams v. United States, where passing a bad check was not deemed a “false statement,” and on Wells, which declined to read implied elements into § 1014. Likewise, the Court found no sign in the legislative history that Congress intended a more expansive definition.
Ultimately, the unanimous ruling overturned the lower court decision, which had upheld a conviction based on Thompson’s misleading but technically true statements about the amount of loan principal he owed to the FDIC.
The Court sent the case back for a determination of whether the statements were actually false not merely misleading.
Amicus Briefs and Oral Argument Highlights
Amicus briefs played a notable role in the case.
The National Association of Criminal Defense Lawyers (NACDL) argued that an expansive reading of § 1014 would render millions of borrowers potentially criminally liable for selectively stating facts during loan negotiations, which raises due process concerns.
The government insisted that actual prosecutions of “mere omissions” are rare, but several Justices pressed for stronger textual support to justify criminalizing literally true statements.
During oral argument, Roberts and Alito asked the government to identify a statutory hook for penalizing a literally correct but deceptive statement. The Solicitor General relied primarily on legislative purpose- protecting financial institutions- but ultimately acknowledged that Congress did not explicitly mention “misleading” conduct.
The justices explored how misleading statements can still be true. A false statement on the other hand is not true. Justice Elena Kagan offered a hypothetical involving a surgeon who tells a patient, “I’ve done a hundred of these surgeries,” but omits that “99 of the patients have died.” The surgeon misled the patient without uttering anything factually incorrect, illustrating the gap between literal falsity and selective omission.
Justice Ketanji Brown Kackson posed a lighthearted hypothetical: a child who ate a dozen cookies, but when asked, “Did you eat all the cookies?” answers, “I ate three.” That statement is literally correct yet leaves the clear (though deceptive) impression that only three were eaten.
The Court explained that under § 1014, the incomplete or cleverly phrased response is not a crime unless it is factually untrue.
The government’s attorney countered with a similar scenario. A tennis player who boasts, “I won the championship,” yet fails to mention that the victory stemmed from a forfeiture because the opponent failed a drug test. Although the athlete’s claim remains literally true, it invites the listener to assume it was a genuine, hard-fought win.
The hypotheticals show that a literally true but misleading statement is not the same as one that is factually false. This challenges the government’s stance on conflating the two so that they receive identical treatment under criminal law.
Practical Implications for Future White-Collar Prosecutions
Following Thompson, prosecutors can no longer charge defendants under § 1014 for statements that are literally accurate, even if they are incomplete or likely to mislead a bank. They must prove factual falsity, i.e., that the defendant actually stated something untrue. This excludes mere omissions or ambiguous half-truths from § 1014’s ambit, substantially limiting the statute’s prior use in some circuits.
Prosecutors could turn to statutes such as 18 U.S.C. § 1001, which broadly covers “false, fictitious, or fraudulent” statements in matters within federal jurisdiction, or 18 U.S.C. § 1344 bank fraud, both of which are interpreted more expansively to include schemes or misleading conduct.
In financial crime cases, especially loan fraud or the increasingly common prosecution of Paycheck Protection Program Economic Injury Disaster Loans (PPP) fraud, wherein a borrower’s statements are cunning but not outright false, the government may pivot to a bank fraud or wire fraud theory, or show that the half-truth was effectively a scheme to defraud.
Defendants have a firmer literal truth defense under § 1014. If they can show their words were factually correct, even if incomplete, courts must acquit unless the prosecution can prove the statements were actually false. This may affect indictments, jury instructions, and sufficiency of evidence.
Federal agencies, from the FDIC to the SBA, may restructure loan forms or interviews to elicit explicit statements. If the question or form demands “all liabilities” or “all debts,” any omission can be deemed plainly false. This is different from forms that merely ask for liabilities and debts without completeness.
Though Thompson focuses on one statute, it arguably continues the Supreme Court’s seeming trend of narrowly construing criminal statutes, especially in white collar contexts.
Supreme Court decisions like Yates v. United States (limiting obstruction of justice provisions) and McDonnell v. United States (restricting “official act” in bribery law) illustrate the Court’s reluctance to read broad language into the penal code. White collar practitioners should be aware of a consistent judicial move toward textual strictness.
The same tension between literal truth and misleading implication arises when companies communicate with consumers or investors. A corporate disclosure might tout, for example, “record revenue” without mentioning collapsing profit margins, or advertise “zero monthly fees” but bury substantial per-transaction charges in fine print.
While Thompson’s focus is on criminal liability for individuals making misleading statements to banks, it highlights a universal lesson: literal truth can still distort reality. Regulators like the FTC or SEC often take the position that half-truths about products, services, or earnings are equally deceptive.
In those contexts, however, companies face mostly civil or administrative actions under consumer protection or securities laws. This shows how whether partial truths become a legal problem often depends on the specific statute in play and the form of deception alleged.
Conclusion
Thompson v. United States carries major ramifications for white collar enforcement, especially in banking and lending contexts. By clarifying that 18 U.S.C. § 1014 targets only factually false statements, the Supreme Court narrows prosecutorial reach and shields literal half-truths from criminal liability under this particular statute.
Nevertheless, prosecutors retain potent tools in bank fraud or false-statement provisions that explicitly address misleading conduct.
Moving forward, defense counsel will have a more robust basis to challenge borderline § 1014 charges, and regulators will likely adapt their strategies—whether by using other statutes or by crafting loan forms that require more explicit answers.
For legal professionals advising clients in the financial sector, the message is clear: Thompson reaffirms a textualist approach- false means untrue. Mere deception can still find liability elsewhere, just not under § 1014.
This article was originally in Law360's Expert Analysis section.
Endnotes:
- Thompson v. United States, 604 U.S. ___ (2025) (No. 23–1095, Mar. 21, 2025)
- 18 U.S.C. § 1014
- 18 U.S.C. § 1001
- 18 U.S.C. § 1344
- United States v. Freed, 921 F. 3d 716, 723 (CA7 2019)
- United States v. Kurlemann, 736 F. 3d 439 (CA6 2013)
- Williams v. United States, 458 U.S. 279 (1982)
- United States v. Wells, 519 U.S. 482 (1997)
- Yates v. United States, 574 U.S. 528 (2015)
- McDonnell v. United States, 579 U.S. 550 (2016)
- NACDL Amicus Brief, Thompson v. United States, No. 23–1095 (filed Nov. 13, 2024)
- Transcript of Oral Argument, Thompson v. United States, No. 23–1095 (Jan. 14, 2025)
- https://www.desilvalawoffices.com/articles/blog/2024/october/the-supreme-court-and-thompson-v-united-states-r/