A Manhattan building manager has managed to get himself into hot water with the Manhattan District Attorneys Office. According to Robert Morgenthau’s prosecutors, Mark Modano, of Mark Modano LLC, was arrest and indicted in connection to an alleged five year fraud beginning in 2003 and ending in 2008. It is alleged that during this period Mr. Modano siphoned $1.3 million from clients for his own personal use.
Charged with three counts of Grand Larceny in the Second Degree (NY PL 155.40), a class C felony, three counts of Grand Larceny in the Third Degree (NY PL 155.35), a class D felony and one count of Scheme to Defraud in the First Degree (NY PL 190.65), a class E felony, Mr. Modano faces up to 15, 7 and 4 years respectively if convicted.
Prior to his arrest and indictment, Mr. Modano was a general “all purpose” guy whose services ran the gamut. His duties included anything from collection of rent and renovation of vacated apartments to payment of property taxes associated with the building and overseeing building maintenance and repairs.
According to the Manhattan District Attorney’s Office:
“The investigation leading to the indictment revealed that [Mr.] Modano continuously mingled his clients’ money into large “master” accounts. [Mr.] Modano slowly misappropriated his clients’ money, via his master accounts, for his own personal expenses. Whenever a potential shortfall occurred with respect to one of his client’s expenses, he simply used money from one of his other clients to make good on the outstanding expense and continue to conceal his crime.”
“The victims most affected by [Mr.] Modano’s misconduct were those who entrusted him with the payment of their property taxes. In approximately 2006, and again in 2008, without informing his clients, [Mr.] Modano entered into in rem installment agreements with the City’s Department of Finance which enabled him to pay his clients’ property tax obligations on an installment basis while continuously accruing interest to the detriment of those clients. At the time in question, all tax-related correspondence was sent directly to [Mr.] Modano; therefore, the owners of the buildings were unaware that they owed property taxes and that [Mr.] Modano had entered into such agreements.”
“[Mr.] Modano distributed monthly financial statements, which purportedly accounted for all monthly income and disbursements, to the owners of each building. Most of [Mr.] Modano’s clients had worked with him for several years and solely relied on these statements to keep updated on the finances of their buildings. In November and December of 2008, in an attempt to control the damage, [Mr.] Modano caused an attorney to contact some of his clients. These clients were informed that, contrary to what [Mr.] Modano’s monthly financial statements indicated, their building operating accounts were nearly empty. The loss with respect to each building ranged from $25, 219.20 to $634,978.04. In total, [Mr.] Modano stole in excess of $1.3 million.”
Without knowing all of the facts in this case, there is an interesting issue here. As a general rule, prosecutors can aggregate the total loss from a victim over a period of time when charging a defendant with those larcenies. Additionally, there are some court decisions that stand for position that if the scheme is a common one, loss can be aggregated amongst different victims as well. In other words, if an accused stole from one victim multiple times, instead of each theft being a separate lesser offense, the thefts could be added up to make one greater offense. In the alternative, while less commonly charged, prosecutors may also be able to add up the total loss amongst multiple victims in the same scheme. Here, despite the fact that the alleged theft is in excess of $1 million, the prosecution has charged Mr. Modano with multiple lesser Grand Larceny crimes instead of aggregating the theft to Grand Larceny in the First Degree, a class B felony, that has a mandatory minimum term of imprisonment and a maximum term of 25 years. Beyond these offenses, it appears that other applicable crimes could include Falsifying Business Records, Forgery and Criminal Possession of a Forged Instrument for his alleged activities of creating fraudulent invoices and supplying false business information.
Despite the above analysis, it is somewhat easy to speculate about charges without having all of the facts. Even if my analysis is correct, there are numerous reasons why prosecutors don’t charge each and every offense in an indictment especially where it is redundant or other charges bring in the necessary evidence and facts. Regardless, Mr. Mondano has a long road ahead and should ascertain with his attorney the strongest defense in this case before he finds himself in much hotter water.
Crotty Saland PC is a white collar criminal defense firm founded by two former Manhattan prosecutors. Representing clients throughout the New York City region, Crotty Saland PC has had tremendous results advocating for clients in fraud and theft crimes ranging from the tens of thousands to the multiple millions of dollars.