Less Isn't Always More: 1001(a)(1) Concealment Charges in Voluntary Disclosure Submissions

Voluntary communications, initiated by a company or individual, with government officials are of a different ilk, however, and practitioners in the past decade have taken guidance from United States v. Safavian, which stands for the proposition that it is not a crime to omit information when communicating with a government official, absent a legal duty to disclose those facts. However, a recent district court decision in the high-profile United States v. Craig case narrowed that holding, which may signal expanded liability when entities or individuals initiate communications with government agencies in the voluntary disclosure context.

In Safavian and Craig, the indictments accused the defendants of concealing or omitting material facts to a government official. In both cases, the defendants argued they lacked a legal duty to disclose the facts, significantly relying on the voluntary nature of their communications with the government. Yet, the courts arrived at starkly different conclusions, finding no legal duty to disclose in the Safavian matter, and finding a legal duty in Craig. The D.C. Circuit will not soon resolve directly any arguable difference here because Craig was acquitted but what does the district court's decision portend for companies submitting voluntary self-disclosures to U.S. agencies? Can the government now charge them with violating 18 U.S.C. §1001(a)(1) for any purported omissions? In light of Craig, companies submitting voluntary disclosures would be prudent to avoid concealment allegations by closely examining their submissions for missing information that they are arguably legally bound to disclose.