Criminal Defense of a Theft: NY Court Dismisses Grand Larceny and Scheme to Defraud in Connection to Lien Law

Whether you are alleged to have committed a Grand Larceny theft in excess of $50,000 or a Petit Larceny shoplifting, your NY White Collar criminal defense attorney knows that if the prosecution does not establish each element of the crime, the case should be dismissed. Recently, a New York State Supreme Court Justice in Nassau County followed this rule when it dismissed four counts of Grand Larceny and one count of Scheme to Defraud against a defendant in connection to New York State’s Lien Law.

In People v. Bryan Hateau , 2492N-2008, the defendant had received checks from his clients, homeowners, that he deposited legally in his business account. Those monies were held in trust funds and were to be forwarded on behalf of various clients within 31 days to sub-contractors. The evidence before the Grand Jury established that this was not done. Unfortunately for the prosecution, the evidence before the Grand Jury did not establish that the defendant misappropriated those funds.

In context with the Lien Law, the prosecution was required to establish certain elements. The Court recognized “that in order to obtain a conviction for any degree of larceny under the Lien Law, the People must prove that a defendant had the intent to deprive another of property or to appropriate same to himself or a third person.” See, People v. Hollowell, 168 A.D.2d 970. The Court further acknowledged that “the cases are unanimous in holding that there must be some modicum of either direct or circumstantial evidence of misappropriation or diversion of trust monies sufficient to allow a fact-finder to reasonably infer that a defendant charged under these sections, by virtue of the misappropriation or diversion, or by some indicia thereof, did, in fact, intend to deprive the homeowner of the trust monies and/or to appropriate them to himself or a third person.”

In the instant matter, the Court held that there was no Grand Larceny or Scheme to Defraud in part because, “[c]ommon sense and business practice instructs that failure to forward trust monies within 31 days may often constitute merely a non-larcenous business decision.” Not only did the Court acknowledge that failure to forward trust monies within a statutorily prescribed time frame was insufficient to establish the intent to misappropriate, the prosecution “presented absolutely no evidence of where the monies received went, if anywhere, and presented no evidence of any…diversion by [the] [d]efendant.” This complete failure on the part of the prosecution was insufficient to establish, even in the light most favorable to the prosecution, that defendant’s criminal and larcenous intent.

In the event that you or a loved one is charged with Grand Larceny, Scheme to Defraud or any criminal offense, contact the former Manhattan prosecutors and criminal defense attorneys at Saland Law PC to get experience and knowledge working on your side.

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