The U.S. Department of Justice has quietly given a defendant-friendly makeover to the federal law that helped send Martha Stewart, Bernard Madoff and Rod Blagojevich to jail.

The law makes it a crime to “knowingly and willfully” give false statements in any matter under federal jurisdiction. Judges and commentators have attacked this “catch-all” provision, known familiarly as “Section 1001″ charges, for years as an easy trap prosecutors set for suspects when their case is otherwise weak.

Judge Brett Kavanaugh of the U.S. Court of Appeals for the D.C. Circuit said in 2010 that the “ever metastasizing” provision poses “a risk of abuse and injustice.” U.S. Supreme Court Justice Ruth Bader Ginsburg said in 1998 that the law gives government “extraordinary authority” to “manufacture crimes.”

The Justice Department has gotten the message, now clarifying that to make the case that a defendant acted “willfully,” the government must prove that he or she knew the statement was unlawful — not just that it was false. That requires a state-of-mind element that can be hard to nail down. Defendants often claim they were unaware that lying to the government was illegal, especially in casual conversations or when not under oath.

“This is a very significant change that will assure that prosecutors use the statute consistently,” said Bryan Cave partner Mary Beth Buchanan, a white-collar defense lawyer and former U.S. attorney in Pennsylvania. “It’s a correction that should have been made a long time ago.” Paul Mogin of Williams & Connolly, who was among the first to spot the change, said, “It is the first signal we’ve seen that the government is reining in the law.”

In making such an important shift in the interpretation of a law invoked hundreds of times a year, the department did not shout it from the rooftops. Solicitor General Donald Verrilli Jr. sprinkled mentions of the change into several largely unnoticed briefs filed in March in routine cases before the Supreme Court. Only one reference appears to be available online, on pages 11 and 12 of the government’s brief opposing certiorari in Natale v. United States, in which a surgeon was convicted of making false statements in a matter that involved a health care benefits program.

What’s more, none of the cases in which Verrilli confessed error actually involved Section 1001, instead arising under Section 1035, a health care fraud provision that mimics the ­”knowingly and willfully” language of the false-­statements law.

The Justice Department’s change of mind is slowly being felt. On April 21, the Supreme Court sent two cases back to lower courts “for further consideration in light of the confession of error by the solicitor general.” The court’s orders will likely set in motion a lengthy reassessment of false-statement precedents in most circuit courts.

One of the cases the high court remanded was Ajoku v. United States. A California federal jury convicted Kelechi Ajoku on four counts of making false statements as part of a scheme to defraud the Medicare program. On appeal, Ajoku’s lawyer said the government should have had to prove he knew his statements were unlawful as well as false. Relying on circuit precedents, the U.S. Court of Appeals for the Ninth Circuit rejected the argument.

Ajoku appealed to the Supreme Court, and it was then that the government dropped its bombshell: “Upon further consideration … the government now agrees” that under either Section 1035 or 1001, “a jury must conclude that he acted with knowledge that his conduct was unlawful,” the government’s brief said.

“We were pleasantly surprised,” said Ajoku’s lawyer, Ethan Balogh of Coleman, Balogh & Scott in San Fran­cisco. The government’s shift may help his client on review, and other defendants as well. “Not every false statement is a crime,” Balogh said.

Steven Fagell of Covington & Burling, a former top official in the Justice Department’s Criminal Division, said the policy shift is likely to prompt “front end” changes in how government representatives interview individuals, to make it clear beforehand that lying is illegal.

The false-statements law and its precursors date to the Civil War. As early as the 1950s, according to Mogin, courts tried to narrow the law’s broad sweep. The “exculpatory no” doctrine was one work-around, allowing people to falsely deny wrongdoing without running afoul of the law — a doctrine that gives a nod to the Fifth Amendment’s prohibition against forced self-incrimination.

But the Supreme Court killed off that doctrine in Brogan v. United States, a 1998 decision upholding a broad reading of Section 1001. The high court touched on the willfulness issue in an unrelated 1998 case, Bryan v. United States. Justice John Paul Stevens wrote that to show willfulness, prosecutors generally should have to prove the defendant knew the statement violated the law.

Ever since that 1998 decision, defense lawyers have tried mightily to get courts and the Justice Department to apply the higher standard to 1001 — without success until now. The challenge now will be to change circuit court precedents and inform federal prosecutors. “Nothing in the law happens overnight,” Balogh said.

Contact Tony Mauro at tmauro@alm.com.