Articles Posted in Fraud Related Offenses

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Recently, we discussed the history of the Medicare Fraud strike forces set up by the U.S. Department of Justice, Fraud Section, in an effort to combat what was perceived as rampant fraud in the healthcare system.  Recently, local U.S. Attorneys across the country have copied the structure and format of the strike forces within their own offices.

Take for example David Hickton, the U.S. Attorney for the Western District of Pennsylvania, in Pittsburgh, who created his own “mini-strike force.”  He has enlisted four assistant U.S. attorneys from his office to focus exclusively on health care fraud investigations and prosecutions.  He has support from the Pittsburgh Division of the FBI, which is one of the two federal law enforcement agencies charged with investigating health care fraud.  He has also reached out to the HHS-OIG, the Department of Health and Human Services, Office of the Inspector General, the other federal agency investigating the medical industry, asking them to dedicate special agents to the Pittsburgh area.

The idea is to focus manpower on one of the largest and most complex industries in the country in an effort to gain expertise while eradicating millions, if not billions of dollars of fraud, waste and abuse in the healthcare industry. Continue reading →

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I recently posted a blog entry briefly analyzing a Second Degree Forgery (New York Penal Law 170.10) conviction where one of the central issues was whether the defendant had the intent to “defraud, deceive or injure” the bank when a deceased man’s credit card was used and all principle and interest payments were made. Although there was more to that case (the blog entry is from May 11, 2014), the lesson learned is that intent to defraud has a very liberal, as opposed to conservative and strict, definition. Recognizing this fact is important for not only you, as an accused, but your criminal attorney identifying and implementing your best defense. Following up with further review of New York’s Forgery and Criminal Possession of a Forged Instrument crimes, statutes and laws, this entry will once again address these offenses.

In People v. Lydon, 2006 NY Slip Op 7125 (1st Dept. 2006), the defendant was convicted after trial of multiple counts of Forgery (it is not clear from the decision whether the crimes were for the felony of Second Degree Forgery or the misdemeanor of Third Degree Forgery pursuant to New York Penal Law 170.05). The facts at trial established that the defendant would order pizzas over the phone for delivery using one of two credit card numbers, but then go to the restaurant and complete the purchase. When the defendant signed the receipts for the pizzas, he would write a relatively illegible name or “Mike.” Neither of the credit card holders, a husband and wife, were named Mike.

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Regardless of the degree or level of the crime, Forgery is a very serious offense as defined in the New York Penal Law. While the misdemeanor offense of New York Penal Law 170.05 is punishable by a sentence of up to one year in jail, the Second and First Degree Forgery crimes can land a defendant in state prison for as much as seven and fifteen years respectively. Forgery in the First Degree, pursuant to New York Penal Law 170.15, is a class C felony and Forgery in the Second Degree, pursuant to New York Penal Law 170.10, is a class D felony. Irrespective of the degree of Forgery you are arrested or investigated for, there are certain traits or elements of the crime that you and your criminal lawyer will likely spend time assessing and analyzing. For example, one of the essential pieces of a Forgery arrest is whether or not you, as an accused, had the “intent to defraud, deceive or injure” another party.

Before addressing what it means to have an intent to defraud, let’s put this term into context. In People v. Martin, 2014 NY Slip Op 2469 (3rd Dept. 2014), the defendant, Martin, twice used a credit card in the name of another man (and signed the receipts) who was the domestic partner of defendant’s fiancee. This man died years earlier. At trial, the jury convicted the defendant of Forgery in the Second Degree, PL 170.10. During the trial, however, the accused’s fiancé, who was the domestic partner of the credit card account holder until his death, testified as follows:

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Offering a False Instrument for Filing and Falsifying Business Records are two potential felony crimes in New York that are almost identical. While “almost” certainly is not “exactly,” one guards against the fraudulent filing of documents within the government and state while the other generally the falsification, deletion or alteration of the business records of a private enterprises. While both crimes involve an intent to defraud, one of the elements that stands out in crimes involving Offering a False Instrument for Filing in both the First and Second Degrees is that the filing of a “written instrument” must take place. What is a “written instrument” you ask? Your New York criminal lawyer or New York criminal defense attorney should be able to answer what a “written instrument” is in the context of New York Penal Law 175.35 (First Degree Offering a False Instrument for Filing) or New York Penal Law 175.30 (Second Degree Offering a False Instrument for Filing), but if not, there is always People v. Headley, NYLJ 1202571734975 (Kings Sup. Ct., Decided September 6, 2012) to provide some guidance.

In Headley, the defendant used a fictitious name to fraudulently obtain paid assignments of independent medical examinations of plaintiffs who sued New York City Transit Authority (“NYCTA”). In using the fictitious name, the defendant “conceal[ed] the fact that the assignments were being awarded to” his company (“Advance”)- someone who also represented NYCTA in defending personal injury lawsuits. As this was a conflict of interest, this would have “disqualified him from being paid to procure medical examinations.” The defendant was charged, amongst other things, with Offering a False Instrument for Filing in the First Degree (NY PL 175.35). Upon the defendant’s motion to reargue, the Court upheld the charge.

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It is not uncommon for prosecutors to seek a prison sentence or term of imprisonment for a defendant accused of and arrested for a computer related crime in New York. Although the crimes are generally viewed as white collar crimes and the potential sentences are not as significant as violent or drug crimes, the growing view is that these crimes should no longer be treated with “kid gloves.” While I cannot cite any specific article, it is my opinion as a New York criminal lawyer who handles computer crime investigations and arrests, that prosecutors are taking computer crime offenses more seriously. I believe prosecutors are taking this position because they want to send a message to NYS legislators, as well as those who may commit these crimes, that the government should increase the penalties. If they do not, prosecutors will pursue significant punishment on their own.

With a little personal opinion behind us, the term “computer crime” is vast and encompasses many offenses in New York (each state and the federal government define these crimes differently). In People v. Puesan, 2013 NY Slip Op. 06530 (1st Dep’t 2013), an appellate court addressed four different computer-related crimes. In this case, the defendant, while on leave from his job, and therefore unauthorized to enter its offices or use its computers, entered his employer’s office and installed a keystroke logger computer program on three of the employer’s computers. As a result the defendant was able to use the information he wrongfully obtained with the keystroke logger to gain access to another company program that stored customers’ confidential information (danger, danger!).

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New York Identity Theft investigations, arrests and prosecutions present themselves in a variety of ways. There are the fairly routine credit card theft and use cases and the more complex web of identity takeovers that extend to social security numbers and other personal identifying information. Although there are different subsections and degrees of New York Identity Theft (New York Penal Law 190.78, New York Penal Law 190.79 and New York Penal Law 190.80), one of the means by which these crimes are prosecuted is through establishing a “financial loss” to the complainant. As a former Identity Theft prosecutor who was part of a grant that led to the establishment of the Manhattan District Attorney’s Office Identity Theft Unit, the predecessor to the Cyber Crime and Identity Theft Bureau, I can tell you that “financial loss” can be in the multiple millions or in the single digits.

Irrespective of the actual “financial loss” suffered, a competent and knowledge New York criminal lawyer or Identity Theft defense attorney needs to fully comprehend the definition and meaning of “financial loss.” People v. Rosario, 2013 NY Slip Op. 23260 (Sup. Ct. New York) helps do just that.

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In a prior bog entry, I addressed some of the potential felony arrest charges you can face if you commit credit card fraud, debit card fraud or check fraud in New York. As a New York criminal lawyer and former Manhattan Assistant District Attorney, I have either prosecuted or defended hundreds of these crimes involving stolen or fake credit cards, bogus checks and other alleged scams netting a few dollars to millions of dollars. While certain crimes associated with check fraud and credit card fraud in New York are not necessarily impacted by the value of the ill gotten gains (Forgery, Criminal Possession of a Forged Instrument and Falsifying Business Records – see other blog entries and CrottySaland.Com for information on these offenses), the degree of other crimes and offenses share a direct correlation with the associated theft or larceny. Beyond the “D” and “E” felonies listed above, these crimes include Grand Larceny and felony Criminal Possession of Stolen Property.

Grand Larceny: Credit Card, Debit Card & Check Fraud

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Fraud involving credit cards, debit cards and checks is rampant in New York City and New York State. It is likely that a day does not go by where a person is arrested for a crime relating to check or debit card fraud. After all, its fairly easy in terms of perpetrating and the results are often instant. It is not until days, weeks or months later that a complainant victim catches on or the police are notified. Unfortunately for the accused fraudster, that immediate gratification of a purchase or cash is grounds for an arrest and potentially incarceration for a litany of crimes and offenses found in the New York Penal Law. Although as a New York criminal lawyer and former Manhattan prosecutor I have encountered in some capacity all of these crimes, the creativity of the means by which these frauds are perpetrated never ceases to amaze me. While this blog entry will not address the different scams, it will address many of the potential crimes you can face if you commit credit card, debit card or check fraud in New York. Second Degree Forgery: NY PL 170.10

When you sign the receipt for the debit card or credit or you endorse or draft the check, you are altering or completing what is legally construed as a “written instrument.” Further, when doing so, you are affecting a legal right and interest. As a result, you are committing a “D” felony of Forgery in the Second Degree (New York Penal Law 170.10) that is punishable by up to seven years in prison. There is no monetary relevancy placed on the item you attempted or in fact purchased for this particular charge. The mere signing or apparently signing the name of the account holder along with these other elements that satisfies the felony offense of PL 170.10. Second Criminal Possession of a Forged Instrument: NY PL 170.25

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While felony arrests and investigations involving Second Degree Forgery (New York Penal Law 170.15) and Second Degree Criminal Possession of Forged Instrument (New York Penal Law 170.25) are two of the more common fraud crimes in New York City and New York State, there are certainly many more crimes involving deceit and fraud that are prosecuted by Assistant District Attorneys and defended against by New York criminal lawyers. One of these crimes, Falsifying Business Records in the First Degree (New York Penal Law 175.10), may not be as serious as the felony Forgery and Forged Instrument crimes, but an arrest for this felony is one that can land a first time offender with no criminal history behind bars for an extended period of time. In fact, the punishment and sentence for this “E” felony of First Degree Falsifying Business Records is as much as four years in prison. This blog entry will specifically address subsection one of First Degree Falsifying Business Records (NY PL 175.10(1)) and how indirect actions or secondary results can still be criminal.

Generally, a person is guilty of PL 175.10 when he or she has an intent to defraud that involves the commission or intent to commit another crime or the concealment of another crime and when he or she makes or causes a false entry to be made in the business record of an enterprise. Wordy? Maybe, but at its core and in non legal terms, if you are trying to hide a theft or commit a larceny and in the course of this crime you intentionally make false entries in the records of a business, you would be guilty of felony Falsifying Business Records (this is merely an example and would need further vetting to see if the crime was actually committed and each element satisfied).

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Being charged with and arrested for any misdemeanor crime in New York is no walk in the park. A New York criminal defense attorney need not advise you of this obvious fact. The reality is, any accusation has significant and collateral consequences. When the crimes involve some alleged form of fraud or dishonesty involving the government, the offense looks even uglier. Two crimes that fit in this mold are Official Misconduct, New York Penal Law 195.00 and Obstructing Governmental Administration in the Second Degree, New York Penal Law 195.05. As ugly as the crimes may be, however, an arrest for either PL 195.00 or PL 195.05 does not equate to guilt beyond a reasonable doubt.

Although I have blogged and drafted materials on both of these crimes, before addressing a recent court decision it is worth briefly explaining the parameters and definitions of these offenses. To be guilty of Official Misconduct pursuant to NY PL 195.00, one first must be a public servant. Further, one must have the intent to obtain a benefit or deprive another person of a benefit. In addition to these elements, as charged in the case discussed below and according to subsection two of this crime, one must knowingly refrain from performing a duty that one is imposed by law or clearly inherent in the nature of one’s office.

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