Avoid Criminal Liability Under General Federal 18USC 1001 False Statements

If you are a government contractor facing a criminal investigation or indictment, you must be aware that under Title 18 USC 1001 where it is a crime to knowingly and willfully make any materially false statements, fictitious or fraudulent statements or representation to the government.

Even if you committed no wrongdoing during a government contract investigation, you could now become a criminal defendant for lying to federal agents. Avoid this at all costs.

The Federal False Statement Act (18 U.S.C. 1001) is a criminal statute that makes it unlawful for federal government contractors to make false or fraudulent statements to federal agents. This is especially true during a procurement fraud investigation. 18 USC 1001 false statements apply to any statement made, whether written or oral and may carry penalties of up to 5 years imprisonment and $250,000 in fines.

Application: During an interview or government contract fraud investigation, federal contractors can be held liable under 18 US Code 1001 if they make false statements while entering into contracts or while performing contractual services. These false statements can include misstating facts on government forms when responding to CID investigative demands; making misrepresentations regarding work performed or expenses incurred, and omitting information that must be disclosed in order to receive payment from the government. You must ensure that all statements you provide to government agents are truthful, accurate, and complete. Violations of Title 18 US Code Section 1001 can lead to serious civil and criminal penalties, so it is important for contractors to be aware of the law and take steps to ensure compliance with it.

By understanding the implications of 18 USC 1001 and exercising a duty of care, contractors can help protect themselves from civil or criminal liability for false statements made during the course of a government contract. This is an important step in helping to ensure successful compliance with all applicable laws and regulations.

Main Points

1. Understand the Definition of False Statements Under 18 U.S.C. 1001: False statements under this law refer to any false, fictitious, or fraudulent representations made by an individual when dealing with a federal agency or government department.
2. Be Aware of the Severity of Penalties for Making False Statements: Violations of this law are prosecuted as felonies, which can result in up to five years imprisonment and fines up to $250,000.
3. When interacting with federal agencies or departments all representations made must be accurate and truthful in order to avoid criminal liability under Title 18 US Code Section 1001 for making false statements. This includes providing truthful answers when asked questions pertaining to any matter involving a federal agency or government department, as well as ensuring documents have been accurately prepared and do not contain false information or inaccurate statements.
4. Document Every Interaction With a Federal Agency or Department: It is important to keep accurate and thorough records of every conversation and interaction with federal agencies or departments to ensure accuracy and protect against potential accusations of making false statements.5. Understand What Constitutes Knowledge & Intent When Dealing With 18 USC 1001 False Statements : The Federal False Statement Act requires knowledge that the statement is false, as well as intent to deceive when making the representation.6. Seek Legal Counsel If Accused of Making False Statements: It is important for those accused of making false statements under 18 U.S.C 1001 to seek legal counsel immediately in order to understand their rights and potential defenses available to them.

  What government employees does the statute focus on?

This could be during an investigation or submission of false information to the contracting officer or some other government official. When you make a false statement to the DOJ attorneys or federal investigators, that would also fall under 18 USC 1001.  Keep in mind that the government official does not have to be a direct employee. The liability jurisdiction is relatively broad. This is the kind of information that triggers your consultation with a contractor defense lawyer. See also subcontractor liability for false claims.

The falsehood of your statements can be put to the test to first make sure that it was material. This means that the statement has the “natural tendency to influence or [is] capable of influencing the decision of the decision-making body to which it is addressed.” See United States v. Gaudin, 515 U.S. 506, 510 (1995).

18 USC 1001 Elements- The General Federal False Statements Statute

(a) Except as otherwise provided in this section, whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully—

(1) falsifies, conceals, or covers up by any trick, scheme, or device a material fact;

(2) makes any materially false, fictitious, or fraudulent statement or representation; or

(3) makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry;
shall be fined under this title, imprisoned not more than 5 years or, if the offense involves international or domestic terrorism (as defined in section 2331), imprisoned not more than 8 years, or both. If the matter relates to an offense under chapter 109A, 109B, 110, or 117, or section 1591, then the term of imprisonment imposed under this section shall be not more than 8 years.

(b) Subsection (a) does not apply to a party to a judicial proceeding, or that party’s counsel, for statements, representations, writings or documents submitted by such party or counsel to a judge or magistrate in that proceeding.

(c) With respect to any matter within the jurisdiction of the legislative branch, subsection (a) shall apply only to—

(1) administrative matters, including a claim for payment, a matter related to the procurement of property or services, personnel or employment practices, or support services, or a document required by law, rule, or regulation to be submitted to the Congress or any office or officer within the legislative branch; or

(2) any investigation or review, conducted pursuant to the authority of any committee, subcommittee, commission or office of the Congress, consistent with applicable rules of the House or Senate.

For a violation of 18 USC 1001, the regulations suggest that a false statement may be written or oral, sworn or unsworn, voluntarily made in regard to information sought as or required by law, signed or unsigned. See United States v. Beacon Brass Co., 344 U.S. 43, 46 (1952); United States v. Poindexter, 951 F.2d 369, 387-88 (D.C. Cir. 1991) cert. denied, 506 U.S. 1021 (1992), cert. denied, 406 U.S. 1021 (1992); United States v. Massey, 550 F.2d 300, 305 (5th Cir. 1977); on remand, 437 F. Supp. 843 (1977); United States v. Isaacs, 493 F.2d 1124, 1156-57 (7th Cir. 1974), cert. denied, 417 U.S. 976 (1974).

Elements of 18 US Code 1001 – What Do the Government Attorneys Have to Prove Liability Under the Federal False Statement Act ?

To be convicted by government attorneys for a violation of 18 US Code 1001, making false statements and government contract fraud, the government must prove beyond a reasonable doubt all elements of the crime. Just the mere fact that you may have lied is not the end of the analysis. Federal prosecutors must also establish three elements under 18 USC 1001:

1. Materially False Statements: The statement made by the government contractor was “substantially” untrue. A remark is considered relevant if it has a “natural inclination to influence or is capable of influencing” the agent it is made to. In other words, a material comment is significant and pertinent to the topic at hand. In criminal investigations, materiality refers to any fact that may be important to locating, prosecuting, or convicting the suspect. Whether or not the government believes the misleading statement is irrelevant. Even if the federal agent knows the assertion is untrue, the law still applies.
2. That the defendant made the false statement “willfully and with knowledge.” Generally, the government must demonstrate that the person making a false statement did so purposefully. In the majority of jurisdictions, the government simply needs to demonstrate that the individual making the false statement knew it was false at the time it was made. However, some courts require the government to demonstrate that the defendant knew it was illegal to make a false statement when he made it. Recently, the Justice Department has stated that this is the favored definition of “knowingly and willingly.” It is possible for defendants to testify that they were not intentionally dishonest or that they were unaware they were breaking the law. In the end, the jury decides whether to believe the defendant or the government’s account of the events.
   3.   That the comment was made addressing an issue within the jurisdiction of the federal government. This “jurisdictional element” requires the government to demonstrate that the false statements were made regarding a matter within the federal government’s jurisdiction. Courts have broadly interpreted “jurisdiction” in this context to include any area in which the federal government has the authority to act or enforce regulations. Considering the scale of our government, its jurisdiction encompasses the economy, healthcare, education, and a number of other domains. For instance, subcontractors engaged by general contractors working for the federal government fall under the “jurisdiction” of the federal government and can be prosecuted for misleading claims and fraudulent invoices made to general contractors.

It should be noted the prosecutor’s demonstrative dishonesty on your part and not just that the statement was false. Prosecutors must show the willfulness of your false statement and that you knew it was false when you made the statement. If you are a government contractor under investigation, beware. Typically, when the government has a weak case, watch for these types of threats against you. The Department of Justice states that illegal false statements must be “knowingly and willingly.” Many defendants will testify they were not intentionally dishonest or they simply didn’t know they were violating the law.

Federal False Statement Act Penalties and Defenses for Violating Title 18 1001

Under 18 USC 1001, the maximum term for making false claims is five years in prison. However, the maximum punishment increases to eight years if the false statement is related to a terrorist act, human trafficking, or specific sexual offenses.

18 USC 1001 identifies three common defenses to a false statement charge:

1.  The speaker did not realize the assertion was untrue. When a person makes a false statement due to an honest error, poor memory, or simple misunderstanding, they have a solid defense.
2.  The statement was irrelevant. This defense questions whether a statement is sufficiently significant or relevant to be deemed “material” to a federal subject. In an interview with a federal agent, a person may lie about their personal life, but if the statement is irrelevant to the topic of the interview, it is not a criminal false statement. When 18 USC 1001 false statements are not made to a government agent or within the government’s jurisdiction, there is also a defense. Even though the private employer occasionally conducts business with the government, the government would not necessarily have “jurisdiction” over a falsehood on a job application submitted to a private employer. The connection is too tenuous, and the federal government has no influence over the employer.
3. There was illegal questioning. The Fifth Amendment of the United States

Exposure of Government Contractors to Criminal Liability

When contractors are investigated for government contract fraud, they may not initially be exposed to exposure under 18 USC Section 1001. However, as the investigation moves along, the government investigator may later find out that some information that you have provided may be false. Does that mean that you go to jail? Not necessarily. To charge a federal contractor under this statute, the government will have to show the elements mentioned above.

Need Immediate Help? Call One of Our Attorneys 

Whether you have been charged with a federal offense under Title 18 US Code Section 1001 or approached by a federal agent, it is crucial that you retain an experienced federal defense attorney. Our firm has more than three decades of experience in the procurement marketplace. Our goal is to vigorously defend federal government contractors and individuals accused in a federal procurement fraud case of making false statements.

If you suspect that you are the target of a federal investigation, if you have been asked to talk with federal agents, or if you have been charged with violating 18 U.S.C. Section 1001, make sure to contact our firm to speak with one of our experienced federal defense lawyers.

If you are facing a government investigation for False Claims Act as a federal government contractor and have issues with 18 USC 1001 false statements penalties, give the contractor defense attorneys at Watson & Associates, LLC today. Call us at 1.866.601.5518