Supreme Court Clarifies Misleading vs False Statements in Daley Thompson Case

Historic building with large columns and stairs.

The Supreme Court unanimously overturned former Chicago Alderman Patrick Daley Thompson’s bank fraud convictions, drawing a crucial distinction between misleading and false statements that could reshape how financial crimes are prosecuted nationwide.

Quick Takes

The Supreme Court unanimously overturned two convictions against Patrick Daley Thompson, a former Chicago alderman and nephew of two former Chicago mayors.
Chief Justice John Roberts emphasized the legal difference between “false” statements (not true) and “misleading” statements (can be technically true).
Thompson was previously convicted for allegedly lying about loans from Washington Federal Bank for Savings, which later failed amid a major embezzlement scheme.
The ruling clarifies that the federal statute only criminalizes literally false statements, not statements that might be misleading but technically true.
The case has been remanded to the 7th Circuit Court of Appeals for further proceedings consistent with the Supreme Court’s interpretation.

Supreme Court Makes Critical Legal Distinction

In a decision that could significantly impact financial fraud prosecutions, the U.S. Supreme Court unanimously overturned two convictions against former Chicago Alderman Patrick Daley Thompson. The ruling, authored by Chief Justice John Roberts, focused specifically on the legal distinction between statements that are “false” versus those that are merely “misleading.” Thompson, who has familial ties to Chicago’s political dynasty as a nephew of former mayors Richard J. Daley and Richard M. Daley, had been sentenced to four months in prison in 2022 after being convicted of lying to regulators about loans from a failed bank.

The central issue before the Court was whether Section 1014 of Title 18 of the U.S. Code, which prohibits “false statements” to financial institutions, also covers statements that might be technically true but could lead to misunderstandings. Thompson had disputed the amount of money he owed on loans from Washington Federal Bank for Savings, claiming he borrowed $110,000 when the FDIC was attempting to collect $269,120.58. His defense argued that his statement was literally true regarding the principal amount he originally borrowed, even if it omitted interest and other charges.

Supreme Court Votes 9–0 to Overturn Convictions of Former Chicago Alderman
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… pic.twitter.com/6w8mJTkSN0

— Claire (@ClaireGarcia161) March 22, 2025

The Court’s Reasoning

Chief Justice Roberts provided a clear explanation of the Court’s reasoning in the unanimous opinion. The decision hinged on the precise meaning of “false” as used in the statute, with the Court finding that Congress specifically chose to criminalize only false statements, not misleading ones. This distinction carries significant weight in determining criminal liability under financial regulations and potentially other federal statutes that use similar language to prohibit “false” statements.

To illustrate the difference, Roberts offered a practical example in the Court’s opinion, “If a doctor tells 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,” explained Roberts.

Background of the Case

Thompson’s legal troubles began with loans he took from Washington Federal Bank for Savings between 2011 and 2014, totaling approximately $219,000. The bank failed in 2017 amid what investigators described as a significant embezzlement scheme. When the FDIC stepped in as receiver and attempted to collect on Thompson’s outstanding loans, he claimed to have borrowed substantially less than what was being sought. This dispute led to his convictions for making false statements to influence the actions of the FDIC.

Thompson’s defense portrayed him as an honest but overwhelmed individual who made only one payment on the loans before the bank collapsed. The bank’s former president, John Gembara, was found dead in a customer’s home shortly before the bank’s closure, with his death ruled a suicide. Thompson’s attorneys argued that the bank and Gembara, not Thompson, were responsible for any erroneous documentation regarding the loans. Following his conviction in February 2022, Thompson resigned from the Chicago City Council, and Nicole Lee was appointed to his seat by then-Mayor Lori Lightfoot.