Tuesday, July 9, 2013
White Eagle: Ninth Circuit Strictly Construes 18 U.S.C. Section 1001 Criminal Liability For Material Omissions
In an important decision handed down on July 5th, the Ninth Circuit, following the DC Circuit's lead in United States v. Safavian, 528 F.3d 957 (DC Cir. 2008), held that the federal government cannot sustain a fraudulent concealment conviction under 18 U.S.C. Section 1001 (a) (1), unless "a statute or government regulation requires the defendant to disclose specific information to a particular person or entity" and the defendant submits a report, or makes a statement, that fails to do so. In these situations, "the defendant's silence is akin to an affirmative misrepresentation, and therefore logically falls within the scope of [Section] 1001's prohibition on false and fraudulent statements." But it is not enough that the defendant violates a general ethical/regulatory duty to report fraud, waste, and abuse. Any relationship between such duties and Section 1001 is too tenuous. The case is United States v. White Eagle. Although several other counts were reversed, this was largely because "the crimes charged did not fit the facts." The discussion of Section 1001 material concealment is by far the most critical part of the opinion.