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Cookies, Cocktails and Mushrooms on the Menu as Supreme Court Hears Bank Fraud Case

During a spirited Supreme Court argument on Tuesday that featured discussions about cookies, cocktails, and toxic mushrooms, the justices attempted to distinguish between misleading statements and outright lies in the case of a Chicago politician who was convicted of making false statements to bank regulators.

The case involved Patrick Daley Thompson, a former Chicago alderman and the grandson of one former mayor, Richard J. Daley, and the nephew of another, Richard M. Daley. Thompson admitted to misleading the regulators but argued that his statements did not meet the threshold of deliberate falsehoods required to constitute criminal behavior.

The justices posed colorful questions to the attorneys, aiming to distinguish between false and misleading statements.

For instance, Chief Justice John G. Roberts Jr. asked whether a motorist stopped for suspected drunk driving would be making a false statement by claiming to have only had one cocktail while failing to mention drinking four glasses of wine.

Caroline A. Flynn, representing the federal government, argued that in the scenario described, a jury could view the statement as false since the officer sought a comprehensive account of the person’s alcohol consumption.

Justice Ketanji Brown Jackson inquired about a child who confessed to eating three cookies when she had actually consumed 10.

Flynn emphasized the importance of context in determining the truthfulness of a statement.

Regarding labeling toxic mushrooms as “100% natural,” Justice Sonia Sotomayor questioned if such a statement was false, to which Flynn did not provide a direct answer.

The case in question, Thompson v. United States, No. 23-1095, stemmed from Thompson taking out loans from Washington Federal Bank for Savings and later facing charges for allegedly providing false information to the F.D.I.C.

The court case detailed Thompson’s repayment history on the loans he took, including the principal amount he repaid in 2018 but not the interest. This led to his conviction and subsequent imprisonment.

Thompson’s lawyer, Chris C. Gair, argued that his client’s statements were accurate in context, but Justice Elena Kagan expressed doubts, citing the jury’s conclusion that the statements were false.

Justices Neil M. Gorsuch and Brett M. Kavanaugh emphasized that the court’s focus was on determining whether the federal law applied to misleading statements in general, leaving it to lower courts to assess Thompson’s conviction.

Justice Samuel A. Alito Jr. sought an example of a misleading statement that was not inherently false, prompting Gair to provide a hypothetical scenario related to his own professional background.

While Justice Alito considered the statement only mildly misleading, Justice Kagan commended Gair’s response, calling it the humblest answer she had heard from the Supreme Court podium.