** Indictment Unsealed * Bannon charged with Money Laundering 2nd as top count along with other offenses including Conspiracy 4th and Scheme to Defraud 1st. Money Laundering 2nd requires no minimum incarceration and as much as five to fifteen years prison while the other two crimes also have no mandated minimum imprisonment but as much as one and one third to four years. No charge of either Grand Larceny or Criminal Possession of Stolen property presumably due to jurisdictional issues*
According to numerous reports, Stephen Bannon is expected to surrender on Thursday to Manhattan prosecutors at the fabled 1 Hogan Place. After he is presumably fingerprinted by District Attorney Alvin Bragg’s detective squad, Donald Trump’s former Chief Strategist and central figure of We Build the Wall Inc., a fund-raising organization that spurred then-President Trump’s efforts to build a wall on our southern border with Mexico, will be arraigned in New York County Supreme Court. Although I have no inside knowledge of the indictment, from what I have read online, the boiled down allegations stem from monies illegally funneled from We Build the Wall Inc. by Bannon and others for his and their personal use.
Again, without the indictment to guide me and relying solely on what is available to the public, below are some of the crimes Bannon may face. To what extent Manhattan prosecutors have jurisdiction over these purported offenses in part or in whole (the SDNY covers more than Manhattan, but NYC is often the epicenter of the financial universe for jurisdictional purposes), or whether they are consistent with the alleged misconduct, will no doubt begin to be revealed along with the indictment at Bannon’s arraignment tomorrow.
First Degree Grand Larceny: Penal Law 155.42
One of the most common white collar crimes in the New York Penal Law, Grand Larceny, regardless of its degree, occurs when a person steals another’s property. Although most people understand the concept of stealing, in the eyes of the New York Penal Law, stealing occurs when one person intentionally deprives another of his or her property or appropriates the same to himself or a third party, by way of a wrongful taking. Commonly money, property encompasses far more. In fact, property can be a physical object or a thing of value. Once the value of the stolen property exceeds $1,000.00, a larceny rises from Petit Larceny, Penal Law 155.25, a class “A” misdemeanor, to one of four felony degrees of Grand Larceny.
If reports are accurate, in the event that the indictment alleges a theft in excess of $1 million from We Build the Wall Inc., Bannon would face the class “B” felony of First Degree Grand Larceny, Penal Law 155.42. The only degree of Grand Larceny that mandates incarceration as a matter of law, if convicted a judge could sentence the purported fraudster to as much as eight and one third to twenty-five years in prison whether he was the principal or acting in concert with another party. At the bottom end, Bannon would go “upstate” for no less than one to three years. Keep in mind that a judge would sentence Bannon to an indeterminate sentence, such as three to nine years, as opposed to a determinate period of five or seven years, for example. As such, his release date would fall anytime along the sentencing spectrum.
Second, Third, and Fourth Degree Grand Larceny: Penal Law 155.40, 155.35 & 155.30
Like the more serious First Degree Grand Larceny, these offenses all share the same legal foundation but with different financial thresholds. Second Degree Grand Larceny, Penal Law 155.40, Third Degree Grand Larceny, Penal Law 155.35, and Fourth Degree Grand Larceny, Penal Law 155.30, have no mandatory minimum for a non-predicate felony, while their maximum terms of imprisonment are five to fifteen, two and one third to seven, and one and one third to four years respectively. Further, in the order they are listed, these class “C”, “D”, and “E”, felony have financial thresholds of more than $50,000.00 to $1 million, more than $3,000.00 to $50,000.00, and in excess of $1,000.00 to $3,000.00.
Should the Manhattan District Attorney’s Office charge any one of these offenses, the theory might be that instead of a theft from We Build the Wall Inc., prosecutors have identified donors in New York who were specifically duped and have traced their dollars to Bannon’s alleged fraud and theft. Therefore, instead of aggregating all the thefts as one from We Build the Wall Inc. because, for example, there is a jurisdictional issue, prosecutors could charge each person’s “donation” as a separate crime. From what I have read, however, this does not seem likely. One of these crimes may be charged, however, if the theft Manhattan has jurisdiction over is simply less than $1 million.
First Degree Criminal Possession of Stolen Property: Penal Law 165.54
If the illegal taking of another person’s property in excess of $1 million is First Degree Grand Larceny, the knowing possession of that same stolen property runs afoul of New York Penal Law 165.54, First Degree Criminal Possession of Stolen Property. While it may not be relevant here because the claimed theft may solely be from We Build the Wall Inc., where there is a common scheme or plan, law enforcement can aggregate individual thefts from different people that may be charged as separate larcenies into one offense upon the collection or securing of all the property. Like its counterpart, this class “B” felony allows for the same potential maximum sentence and requires one to three years incarceration upon conviction.
Second, Third, and Fourth Degree Criminal Possession of Stolen Property: Penal Law 165.52, 165.50 & 165.45
Following the same line of thought from above, if the aggregated value of the monies allegedly syphoned off by a person is more than $1,000.00 but not greater than $3,000.00, more than $3,000.00 but not in excess of $50,000.00 or more than this latter amount but equal to or less than $1 million, then a Grand Jury could indict that person for Second Degree Criminal Possession of Stolen Property, New York Penal Law 165.52, Third Degree Criminal Possession of Stolen Property, New York Penal Law 165.50, or Fourth Degree Criminal Possession of Stolen Property, New York Penal Law 165.45 respectively. Like Grand Larceny, the felony degrees of Criminal Possession of Stolen Property, in order, are class “C”, “D”, and “E” felonies with the same sentencing ranges.
Falsifying Business Records: Penal Law 175.10
Although there are numerous subsections, the general principle of First Degree Falsifying Business Records, New York Penal Law 175.10, is that if a person makes a false entry in a business record of a company with the intent to defraud and he does so with the intent to commit another crime or conceal that offense, he commits First Degree Falsifying Business Records. A class “E” felony, Penal Law 175.10 is punishable by no jail but as much as one and one third to four years. Here, in the event it is established that in order to perpetrate the alleged scheme Bannon fixed the organization’s books or records, this felony is viable charge.
Conspiracy: Penal Law 105.10 & 105.05
If a person agrees to engage with or cause just one other person to intentionally commit a class “B” or “C” felony, then he has committed Fourth Degree Conspiracy, Penal Law 105.10(1). Even if the felony that the person intends to commit does not rise to these levels, if the objective is any felony then the crime he committed is Fifth Degree Conspiracy, Penal Law 105.05.
A class “E” felony, Fourth Degree Conspiracy is punishable by up to one and one third to four years in prison with no mandatory minimum while Fifth Degree Conspiracy is punishable by up to one year in jail – Rikers Island in New York City – without a mandated minimum.
First Degree Scheme to Defraud: Penal Law 190.65
In lieu of addressing each subsection of First Degree Scheme to Defraud, New York Penal Law 190.65, if prosecutors can prove the identity of at least one person, and it is their theory to prosecute the case on behalf of New York residents who are cooperative victims of the alleged fraud, then (1)(a) and (1)(b) are applicable. In substance, if a person engages in systematic ongoing course of conduct where he or she intentionally defrauds at least ten people of their property by way of false representations and actually secures that property from at least one individual, they have committed Penal Law 190.65(1)(a). Alternatively, even if the number of people is only two or more, if a person’s actions are the same and he obtains property in excess of $1,000.00 from at least one of them, then he has violated Penal Law 190.65(1)(b).
Scheme to Defraud is a class “E” felony with no legally required minimum imprisonment and a maximum term of one and one third to four years in a New York penitentiary.
Other Crimes: Waiting for the Unsealed Indictment
Just as I have no inside knowledge on the purported fraud other than what is available in the news, I have not seen the indictment. Could a Grand Jury have voted to charge Bannon with a degree of Money Laundering or even Enterprise Corruption in connection to others who may have perpetrated this alleged crime with him because prosecutors presented evidence of an organized criminal structure with a shared objective of self enrichment through defrauding donators to We Build the Wall Inc.? Sure, its possible, although those offenses, more so the latter, can complicate what otherwise may be a straight forward case even if “sexy” due to the parties involved. Similarly, are there fraudulent documents that were filed or possessed in New York or is there some other jurisdictional connection that could lead to charges such as Offering a False Instrument for Filing? Again, sure. Is it plausible that Bannon violated a section of New York Tax Law Article 1800, Criminal Tax Fraud? One more time, sure, but we will have to wait and see.
At some point, as noted above, more charges may merely complicate an otherwise fairly clean case, not add value as they won’t bring more evidence into the case that would otherwise be inadmissible, and won’t provide for more criminal exposure. In other words, even if New York has jurisdiction, there may be diminishing returns with the piling on of more nuanced and complex charges.
Other Issues: Setting Bail
Due to what many would argue are quite lax, New York’s bail laws only allow for certain offenses to be bail eligible. As a rule of thumb, bail eligible crimes are statutorily defined violent felony offenses, sexual offenses, and some other more serious crimes. That said, First Degree Grand Larceny, First Degree Money Laundering, and Enterprise Corruption, are all qualifying offenses. Assuming Bannon is arraigned on an indictment charging First Degree Grand Larceny, or any of these offenses, the presiding judge may set monetary bail.
Expect the Unexpected: Fireworks Yet to Come
Like his former boss, Bannon has a penchant for speaking his mind, right or wrong. No doubt playing the political witch hunt card as part of his defense whatever the indictment reveals, I expect Bannon directly or through his counsel will make bombastic proclamations and be very vocal in a public forum defense that will be tabloid fodder for the weeks and months to come. If nothing else, tie up your laces, strap on your seatbelt, and batten down the hatches…we are all in for a ride.
To learn more about the above charges, follow the highlighted links.
Saland Law was founded by Jeremy Saland, a former Manhattan prosecutor.