The Collaborative International Dictionary of English v.0.48:

Overstate \O`ver*state"\, v. t. [imp. & p. p. Overstated; p.
   pr. & vb. n. Overstating.]
   To state in too strong terms; to exaggerate. --Fuller.
   [1913 Webster]

WordNet (r) 3.0 (2006):

overstate
    v 1: to enlarge beyond bounds or the truth; "tended to
         romanticize and exaggerate this `gracious Old South'
         imagery" [syn: overstate, exaggerate, overdraw,
         hyperbolize, hyperbolise, magnify, amplify] [ant:
         downplay, minimise, minimize, understate]