A recent U.S. Supreme Court ruling could have ramifications for white-collar cases across the country. In a rare unanimous decision, the justices overturned the conviction of a former Chicago politician who was found guilty of making false statements to federal regulators.
The former alderman, who is part of the Daley family that has produced two of the city’s mayors, admitted to misleading the Federal Deposit Insurance Corporation (FDIC) about several loans he got from a bank over a decade ago totaling more than a quarter million dollars.
When the bank failed in 2017, the FDIC and the company it hired to handle the bank’s loans sought repayment with interest of those loans (on which he’d repaid just a small fraction at that point). He reportedly told them his loan was for $110,000. That was the amount of the first loan only.
The defendant, who served four months in prison and has since repaid most – although reportedly not all – of the money owed, acknowledged that this original statement was misleading and incomplete. However, he argued that it wasn’t false, which is what the offense for which he was convicted requires. Specifically, it prohibits making “any false statement or report” to federal regulators. The high court agreed.
What did the justices say?
In the opinion, Chief Justice John G. Roberts, Jr. wrote, “False and misleading are two different things. A misleading statement can be true. And a true statement is obviously not false. So basic logic dictates that at least some misleading statements are not false.”
Chief Justice Roberts also noted that because many federal laws refer to both false and misleading statements, the fact that this one doesn’t indicates an intention not to include that word.
The former politician isn’t off the hook, however. The decision sends the case back to the appeals court, where it can still determine that his statement wasn’t just misleading but actually false. In fact, although she voted with the rest of the court, Justice Ketanji Brown Jackson wrote a separate opinion stating that the appeals court should affirm the trial court’s initial finding that his statement was indeed false.
Certainly, it’s best not to make false or misleading statements to any regulators at any level or when those statements are considered sworn. Nonetheless, anyone who finds themselves facing charges for doing either of those things could potentially face serious consequences. As a result, it’s important to get experienced legal guidance as early as possible.
