Enterprise Corruption in New York
Who is at risk?
Enterprise corruption is a complex topic involving the various levels of organized crime. Due to New York’s large population, its access to ports, and its proximity to the border, the state has struggled to address organized crime.
There had previously been a limited amount of sanctions and laws in place to prosecute these entities as they were involved in various crimes with complex hierarchies in place. These laws pertain to any individual who participates in agencies whose goal is to profit through criminal activity.
The law is very diverse in defining the parameters due to the complexity of criminal organizations. You could be at risk for prosecution if you engage in illegal activity in an organized manner. It is critical to consult with legal representation to protect yourself and your business if you suspect yourself to be at risk.
Federal Statutes were enacted to allow for prosecution across state and US borders. Often these crimes extend beyond the immediate area and can be vast organizations. The federal laws allow for aid and support in the enforcement of state legislation. The US Code states punishments on a federal level for individuals found guilty.
It defines a criminal enterprise as anyone that violates the subsection of the law, works with other individuals and obtains monetary compensation for such. The law is meant to be very broad and nonspecific so that it covers many different variations of criminal activity.
The federal statutes allow for cooperation between agencies and involvement of federal resources when needed, but are also updated to improve punishments. The previous laws involving criminal activities included imprisonment, fines, and sanctions. The newer laws allow for enhanced penalties on the civil and criminal aspects. Working together, the agencies can track and try individuals for participating in organized crime.
Legal Definition with Elements
The first section of the New York Penal Code is set forth to provide definitions for what is considered by the state to be enterprise corruption. This allows for a better understanding of the goals of the state and the entities at risk.
- This legislation in Section 460 of the New York Penal Code helps to define the activity and set guidelines for law enforcement. It defines criminal activity with references to the corresponding sections with everything from assaults to weapon possessions. The diversity of the criminal activity is not limited to the statues stated however and are used for example only.
- It continues to then refer to Section 175 that defines an enterprise as an entity with one or more people that participate in any sector of business (public or private) and provide a service or product. It includes examples of business, government, industrial and even political services or products.
- The next definition stated is a criminal enterprise. The law defines it here as a group that is conducting illegal activities with a pattern and purpose. Expanding away from individual criminal acts applies when the cooperation of individuals is involved.
- Finally, a pattern of criminal activity is defined as a set of guidelines placed. It includes components stating that a person in a criminal enterprise charged with three or more offenses within a ten-year time frame that are not isolated incidents and are either related to a larger scheme or organized by an individual within a criminal organization.
The next section will specifically cover enterprise corruption and the elements that must be met. All components must be proved by the prosecution in order to be found guilty of criminal enterprise.
Section 460.20 defines enterprise corruption as when you are aware of the activities of a criminal enterprise, whether it be through existence or employment. This is a class B felony if charged. The prosecution must prove:
You must intentionally commit a pattern of criminal activity relating to the criminal enterprise. One example of criminal activity could have to do with drug distribution and trafficking. For the purpose of this article, a drug industry is the example of criminal activity used.
Law enforcement could show where you repeatedly were caught in the act of carrying or selling on behalf of the larger organization (individual drug charges would also apply for this example.)
You show interest in participating or helping to control criminal activities that are committed. If we continue with the first example, a drug organization, then this aspect could be done through recruitment of new members to assist with the distribution and selling of illicit substances.
You would be participating in criminal activity on behalf of the criminal enterprise intentionally.
After the first two aspects are completed, if you were to invest any money given to you or made from the organization, then you could be found guilty. So you have obtained the illicit substances, distributed them to others to sell and have received your share of the profit. Once you deposit or receive any funds or gains from the selling, you could be found guilty.
All three of these elements must be met in order to be found guilty of Enterprise Corruption. The second point of this statute states that in order to be found guilty, three criminal acts are committed to showing a pattern of criminal activity that is meant to help expand the cooperation and meets the above criteria for criminal liability.
If two of the charges are felonies (other than conspiracy charges), one of the felony charges occurred within five years of criminal activity, and each was committed within three years of a previous charge, then you can be convicted of criminal activity.
Aggravated Enterprise Corruption
This statue is S. 460.22. When you commit enterprise corruption and the charges are class B felony charges, and two are armed felonies you can be tried for aggravated enterprise corruption, a more severe charge.
This could include use of a deadly weapon, presenting what looks to be a firearm or one is a class B felony, and the other two charges involve illegal weapon purchases. Due to the elevation of the charges, this becomes a class A felony with harsher punishments possible.
If you are charged with enterprise corruption, there are other associated charges that can arise. Depending on the crimes that were committed as a part of the enterprise, you will be charged for those as well.
For our example above, the additional charges would include possession of a controlled substance, distribution of a controlled substance, and drug trafficking. The law is intentionally broad in the definition of criminal activity to allow for the prosecution to have as much leeway as needed to file.
The statue lists out charges relating to assault with everything in between to weapons charges. Any of those can be imposed all with the penalties that come with them.
What is RICO?
In addition to the individual charges and enterprise corruption, you could be eligible for RICO charges. RICO, Racketeering Influenced and Corrupt Organizations, is a charge with more severe penalties that can be brought. These involve more serious crimes such as murder, bribery, robbery, drugs and obscene manners.
RICO charges allow for charges to be brought upon a person, pursue civil remedies and also opens you up to civil RICO suits. These can be complex and require legal representation.
Individual circumstances to be considered With each case, there are individual circumstances to be considered.
- The prosecution will attempt to add on as many strong charges as possible in order to obtain a conviction.
- The nature of the criminal activity will dictate which charges are filed along with enterprise corruption. Consulting with an attorney is crucial to cover all the various elements involved with your individual case and circumstances. To each charge, there are individual defenses that can be employed and then a strategy for enterprise corruption.
- Often with crime organizations, the levels of intricacy can cause many different activities to be linked together. Charges for money laundering, extortion, trafficking in stolen securities, and even bribery are charges that are frequently associated with enterprise corruption.
- There can be many layers to the organization that opens you up to more liability than on surface level. The nature of the crime rings and daily functions are considered when deciding which charges to follow through with.
As discussed above, the charge can be elevated to aggravated enterprise corruption once there are two or more class B felonies or if there were stolen/illegal weapons purchasing occurring. Due to its diverse nature, legal representation should be contacted immediately.
- One example of a recent case comes from November 2018. This case involved an individual who was allegedly sold stolen goods to obtain a profit. There was not sufficient evidence to show where he knowingly participated in an enterprise, as he acted alone and lacked a criminal structure. Though he stole motorcycles and used distributors to find buyers, he did not have a system in place or an entity that classified as an enterprise. Thus the charges were dismissed in the case of an appeal.
- A more recent case emerged from the Bronx. A drug enterprise dealing in heroin and cocaine was raided in April. Twelve men had sixty-eight charges brought including enterprise corruption, drug distribution and possession charges. There were over $25,000 in cash, firearms, 3 kilos of heroin and over 6,000 bags of heroin. This bust allowed for a huge strike in the drug market for the area. These individuals will have cases in the coming months.
Who investigates enterprise corruption?
There is a state-wide task force to investigate the crimes and gather evidence for the prosecution. Local law enforcement is usually involved as well as they handle the arrests, seizures, and detainment of suspects.
Once the evidence has been gathered, it is given to the prosecution which could range from the district attorney all the way up the chain to the general attorney. They can and will use every item at their disposal to gather as much evidence as possible with as many possible charges. Individuals identified in any part of the criminal enterprise are at risks.
As mentioned, all other associated charges such as drug possession, fraud charges, etc. apply as well. The penalties for all the charges are combined and determined in the sentencing if they are served in conjunction or separately. If you are charged with enterprise corruption, that alone is punishable by up to 25 years of imprisonment, as it is a class B felony.
Aggravated enterprise corruption is a class A felony and can be up to a life sentence. RICO charges can be added on which include the crime charges (such as murder, bribery, etc.) and up to 25 years of jail.
There are also fines associated that begin at $5,000 and go up to double the amount of profit earned or damages incurred. Due to the complex nature of crime rings, the charges and penalties have multiple possibilities and outlooks depending on which you are found guilty of.
It goes without saying that any property, money, or merchandise obtained from the criminal enterprise will be taken. There are often fines enacted that force you to pay up to twice the amount of damage, injury, or restitution to any potential victims as well. The loss of rights such as gun ownership, voting privileges, and even traveling can be taken.
Though some are possible to regain, there are no guarantees. The charges also stay as a permanent mark and show up on routine background checks, making it harder to gain employment through many fields.
The most common defense used with enterprise corruption is not having knowledge of the organization. If you have been charged but were unaware that you were participating and encouraging a criminal enterprise, then the prosecution is unable to find you guilty. There is also intended to be considered.
If you did merely shopped at a store who was a part of a criminal ring, you had no intention of encouraging their behaviors, but you just wanted to go to the closest store to get milk on the way home, then this would constitute you not having any intention. As stated for the example, there must also be an enterprise in place for these charges.
Though Jones was still tried for stealing of the goods, he was unable to be convicted of the enterprise corruption as there was not enterprise. There must be a system in place with a hierarchy in order for it to be an enterprise. As stated above there must also be involved in regular criminal activity and not isolated acts for this as well.
GET A LAWYER! Due to the complex nature of crime organizations, there are so many different charges, penalties, punishments that can arise from becoming involved in such. Access to a great defense attorney such as the Blanch Law Firms grants you access to a team committed to proving your innocence.
The charge itself of enterprise corruption is a class B felony on its own. Adding in the other associated charges based on your situation can make the case very complex. Having proper representation can allow you to be aware of the laws and requirements that must be met to be charged with these.
Enterprise Corruption in the News
February 21, 2018
Daniel Steininger was charged with:
- Enterprise corruption
- Money laundering in the 1st degree
- Criminal tax fraud in the 2nd degree
- Four counts: Criminal possession of forged instrument in the 2nd degree
- Two counts: Criminal tax fraud 3rd degree
- Scheme to defraud in the 1st degree
- Conspiracy in the 4th degree
- Thirty-six counts: Offering a false instrument for filing in the 1st degree
- Four counts: Conspiracy in the 5th degree
- Four counts: Contract, or Agreement to a monopoly in trade in the 1st degree
He along with 18 other individuals and 13 companies formed a monopoly on the towing industry in New York. This allowed for them to ‘chase’ otherwise known as eavesdropping on the police radio to race to crash sites, so that they could be the first on scene and collect the vehicles before another agency could arrive, including heavy-duty vehicles.
He also facilitated insurance fraud by submitting false claims and charging. He has not yet been tried or sentenced and was released on a one million dollar bail. He and the other individuals and companies face jail time and many fines, adding up to $19 million, related to the crimes.
May 18, 2017
Vito Badamo was charged with:
- Attempted enterprise corruption
He participated in one of the five major crime families in New York. He was a loan shark and was tasked with collections. He also participated in illegal gambling and selling of prescription medications operation with the same organization.
He pleaded guilty and was sentenced to 3.5-7 years in state prison and $40,000 in forfeiture. His knowing participation in the crime organization made him guilty of enterprise corruption.
May 3, 2017
Kevin Asare was charged with:
- Enterprise corruption
- Four counts: Grand Larceny in the 2nd degree
- Two counts: Grand Larceny in the 3rd degree
- Possession of forged instrument in the 2nd degree
- Six counts: Conspiracy in the 4th degree
- Scheme to defraud in the 1st degree
He and 38 other individuals were charged in a criminal ring of check cashing and money laundering that involved over $2.5 million. He was guilty of “debit card cracking” which involves depositing a false check into an account and withdrawing the funds before the bank realizes the fraud.
He was discovered via the Cybercrime task force after a sting operation involving one of the officers.
October 27, 2016
Gabriel Nortesano was charged with:
- Enterprise corruption
He shortened deliveries and resold the oil from heating companies to make a profit. He did so via hoses that would divert some of the heating oil back into his truck so he could return it and resell it. He and his associates, including the heating company G&D, face charges of enterprise corruption.
He was sentenced to pay 2.5 million dollars in restitution and 3-9 years in prison. Over 15 individuals have pleaded guilty in related crimes, and 7.5 million dollars worth of restitution has been fined.
21 U.S.C. § 848.
- RICO Charges. The United States Department of Justice. Retrieved from https://www.justice.gov/jm/criminal-resource-manual-109-rico-charges
Eberhart, Christopher. 4/11/19. “Police take down major drug enterprise in Mount Vernon and the Bronx.” Retrieved from https://www.lohud.com/story/news/crime/2019/04/11/police-take-down-major-drug-enterprise-mount-vernon-bronx-heroin-cocaine-fentanyl/3439599002/
“Organized Crime Control Act.” Dictionary of American History. Retrieved May 03, 2019 from Encyclopedia.com: https://www.encyclopedia.com/history/dictionaries-thesauruses-pictures-and-press-releases/organized-crime-control-act
People V Jones: 2018. JUSTIA US Law. Retrieved from https://law.justia.com/cases/new-york/court-of-appeals/2018/122.html
Racketeering Influenced and Corrupt Organizations (RICO). NOLO. Retrieved from https://www.nolo.com/legal-encyclopedia/content/rico-act.html