Enterprise Corruption in NY: The Necessity of an “Ascertainable Structure”

NY criminal defense attorneys know that the crime of Enterprise Corruption is often viewed as New York’s RICO statute. Generally, a person is guilty of Enterprise Corruption “when, having knowledge of the existence of a criminal enterprise ad the nature of its activities and being employed by or associated with such enterprise,” he either (a) “intentionally conducts or participates in the affairs of an enterprise by participating in a pattern of criminal activity,” (b) “intentionally acquires or maintains any interest in or control of an enterprise by participating in a pattern of criminal activity” or (c) “participates in a pattern of criminal activity and knowingly invests any proceeds derived from that conduct, or any proceeds derived from the investment or use of those proceeds, in an enterprise.”

Although the statute does not seem to complicated on it’s face, the criminal defense attorneys at Saland Law PC, can tell you that not only is it a convoluted statute, but many of the seemingly simple terms in the statute have their own unique definitions. Each of these terms and the cases that define those terms must be analyzed and researched in order to successfully challenge an indictment for Enterprise Corruption.

One term that has its own meaning and that will be addressed in this entry is what constitutes a “criminal enterprise.” At bottom, if there is no “criminal enterprise” then there can be no Enterprise Corruption. Therefore, challenging the existence of the alleged “criminal enterprise” is often the central piece to a motion to dismiss an indictment against a client.
According to NY Penal Law 460.10(3) a “criminal enterprise” is “a group of persons sharing a common purpose of engaging in criminal conduct, associated in an ascertainable structure distinct from a pattern of criminal activity, and with a continuity of existence, structure and criminal purpose beyond the scope of individual criminal incidents.”

Although the definition above probably does nothing more than confuse a reader who lacks criminal law experience (there are probably many criminal attorneys who are equally confused), a review of a recent Manhattan Supreme Court decision should help shed some light on this matter.

Recently, Justice Bruce Allen dismissed an indictment for failure to establish the existence of a “criminal enterprise” where the indictment failed to set forth an “ascertainable structure distinct from a pattern of criminal activity.” In People v. Douglas Latta, 3782/2007, the Court noted that “although the statute does not require any particular structure, and it is clear that the structure need not be distinct from a legitimate one, courts have consistently required some evidence of a system of authority or hierarchy binding the defendants together.” In other words, there needs to be an a tiered structure in place. This structure can have distinct roles for individuals, but must also show that the individuals are bound together in some capacity. Unlike a crew of thieves merely working together with a common goal to burglarize apartments where they are equal individuals without a structure, Enterprise Corruption requires a more sophisticated (in form, not substance) and stratified group of people.

In Latta, the Court reviewed the indictment and found that “nowhere do the People allege that any of [the] individuals or entities made decisions or shared authority over each other.” Moreover, the Court stated that “what the People allege are a series of arms-length business transactions – admittedly extensive and, if the People’s allegations are true, illegal – conducted by a variety of organizations and individuals, each operating independently and with no overarching structure or system of authority. In essence, the People have described an illegal industry rather than a corrupt enterprise, the criminal parallel of a typical legitimate industry consisting of producers, wholesalers, distributors, retail outlets, and credit suppliers, each of which has a unique but independent role in the industry. Despite the People’s great creativity in attempting to describe the defendants’ activities, the People’s theory of the case (and the evidence) never points beyond long-term, repeated illegal business transactions among parties who stand on equal footing, and who operate independently of each other.”

Although individuals charged with Enterprise Corruption can feel overwhelmed with the quantity of evidence against them, quantity does not always equate to quality. If the prosecution has not met their burden, then your criminal defense attorney needs to zealously advocate on your behalf to make sure the court recognizes and sees the prosecution’s failure. The criminal defense attorneys and former prosecutors of Saland Law PC, know this all too well and have the experience and skill to aggressively challenge a prosecutor’s case so that you can avail yourself to the best possible disposition whether that is an outright dismissal or an offer of a reduced charge.

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