By The Epoch Times | Created at 2025-03-22 14:22:25 | Updated at 2025-03-23 11:49:22
21 hours ago
The Seventh Circuit upheld Patrick Daley Thompson’s convictions for making false statements to the FDIC even though the statements were considered misleading.
The Supreme Court on March 21 unanimously overturned former Chicago alderman Patrick Daley Thompson’s conviction for making false statements to financial regulators.
Thompson is related to two former Chicago mayors. He is grandson of Richard J. Daley, who was mayor from 1955 to 1976, and nephew of Richard M. Daley, who was mayor from 1989 to 2011.
In a unanimous opinion written by Chief Justice John Roberts, the Supreme Court held that even though Thompson admitted making misleading statements to the Federal Deposit Insurance Corporation (FDIC), those statements were not criminal in nature because the statute under which he was charged does not cover misleading statements.
The case goes back to 2011 when Thompson took out a series of loans totaling $219,000 from the now-defunct Washington Federal Bank for Savings, according to a summary in the opinion.
One loan, in the amount of $110,000 was to purchase partial ownership of a law firm. Another, for $20,000, was to pay taxes. A third, in the amount of $89,000, was to repay a debt owed to another bank.
The bank failed in 2017 and FDIC tried to collect its outstanding loans. The agency’s loan servicer invoiced Thompson for $269,120.58, which covered the principal borrowed and interest, the summary said.
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In February 2018, Thompson contacted the loan servicer and said he had “no idea where the 269 number comes from.”
“I borrowed the money, I owe the money—but I borrowed … I think it was $110,000,” he said, adding that he was disputing the balance stated on the invoice, according to the summary.
In March 2018, two FDIC contractors called Thompson. Their notes indicated he said he borrowed $110,000 for “home improvement.” The FDIC and Thompson agreed to settle the debt for $219,000, waiving the interest owed.
The summary said Thompson was later charged with two counts of violating Section 1014 of Title 18 of the U.S. Code. The section makes an offense of “knowingly mak[ing] any false statement or report … for the purpose of influencing in any way the action of … the Federal Deposit Insurance Corporation … upon any … loan.”
Indictment count one alleged that Thompson “falsely stated he only owed … $110,000 to [the Bank] and that any higher amount was incorrect, when [he] then knew he had received $219,000.” Count two alleged that Thompson “falsely stated that he only owed $110,000 to [the Bank], that any higher amount was incorrect, and that these funds were for home improvement, when [he] then knew he had received $219,000 from [the Bank] and the $110,000 was paid to a law firm as [his] capital contribution.”
Thompson resigned as alderman in February 2022 after a federal jury in Illinois convicted him on both counts.
He moved for a new trial, arguing that when he said he borrowed $110,000 the statement was “literally true because he had in fact borrowed that amount of money from the Bank, even though he later borrowed more,” the summary said.
The federal district court denied the motion in June 2022, finding that the U.S. Court of Appeals for the Seventh Circuit “does not require literal falsity in Section 1014 cases,” but acknowledging that his argument “would have had more traction” in the Sixth Circuit because in that court “a Section 1014 conviction cannot rest on material omissions or implied misrepresentations.”
The Seventh Circuit upheld the convictions in January 2024, holding it did not need to decide if Thompson’s statements “were literally true because his argument runs headfirst into [Seventh Circuit] precedent,” according to the summary.
In October 2024, the Supreme Court granted Thompson’s petition “to determine whether [Section] 1014 criminalizes statements that are misleading but not false.”
“False and misleading are two different things,” Roberts wrote in the opinion. “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.”
Although Section 1014 criminalizes the making of “any false statement or report,” it fails to use the word “misleading,” Roberts wrote.
If a physician advises a patient, “‘I’ve done a hundred of these surgeries,’ when 99 of those patients died, the statement—even if true—would be misleading because it might lead people to think those surgeries were successful.”
The Supreme Court vacated the decision of the Seventh Circuit and remanded it to that court “for further proceedings consistent with this opinion.”
It is unclear when the Seventh Circuit will reconsider the case.
