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Report of the New York State White Collar Crime Task Force

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Report of the New York State White Collar Crime Task Force REPORT OF THE NEW YORK STATE WHITE COLLAR CRIME TASK FORCE Approved July 2013 Issued September 2013 REPORT OF THE NEW YORK STATE WHITE COLLAR CRIME TASK FORCE Table of Contents I. Executive Summary .................................................................................................................... 1 A. Introduction ......................................................................................................................... 1 B. Organization and Methodology ........................................................................................ 3 1. Boutique Statutes ............................................................................................................. 4 2. Gradation of Crimes According to Level of Harm ................................................... 6 C. Summary of Recommendations ....................................................................................... 7 1. Procedural Reforms ......................................................................................................... 7 2. Fraud .................................................................................................................................. 8 3. Cybercrime and Identity Theft ...................................................................................... 8 4. Elder Fraud ....................................................................................................................... 9 5. Anti-Corruption ............................................................................................................... 9 6. Tax and Money Laundering .........................................................................................10 II. Historical Background .............................................................................................................. 11 III. Procedural Reforms .................................................................................................................. 17 A. Lower the Cost of Grand Jury Presentations ...............................................................19 1. Permit All Business Records to be Admitted via Sworn Certification .................20 2. Permit Sworn Certifications in Identity Theft Cases ...............................................23 3. Allow Distant Witnesses to Testify via Videoconference .......................................24 B. Replace Transactional Immunity with Use Immunity ................................................26 C. Amend the Accomplice Corroboration Requirement ................................................32 IV. Fraud ........................................................................................................................................... 34 A. Larceny ................................................................................................................................37 1. Protect Personal Identifying Information .................................................................37 2. Protect Computer Data and Computer Programs ...................................................39 3. Expand Jurisdiction for Thefts of Digital Property .................................................40 4. Expand Larceny to cover Thefts of Services (and Repeal Theft of Services). ....41 B. Scheme to Defraud ...........................................................................................................43 C. The Martin Act ..................................................................................................................48 D. Trademark Counterfeiting ...............................................................................................49 V. Cybercrime and Identity Theft ............................................................................................... 52 A. Computer Intrusion Laws ...............................................................................................54 1. Change the Definition of Computer Material ...........................................................54 2. Gradate Computer Tampering ....................................................................................55 B. Identity Theft .....................................................................................................................56 1. Gradate Identity Theft ..................................................................................................57 2. Expand Aggravated Identity Theft .............................................................................58 3. Include Identity Theft in the Organized Crime Control Act .................................59 C. Criminal Possession of a Skimmer Device ...................................................................60 VI. Elder Fraud ................................................................................................................................ 62 A. Theft from Mentally Disabled Adults ...........................................................................63 B. Access to Medical Records ..............................................................................................64 C. Conditional Examinations of Elderly Victims .............................................................65 D. Caregivers in the Grand Jury ...........................................................................................66 E. Larceny by False Promise ................................................................................................67 F. Other Proposals ................................................................................................................69 VII. Anti-Corruption ........................................................................................................................ 70 A. Bribery .................................................................................................................................71 1. Public Sector ...................................................................................................................71 2. Private Sector ..................................................................................................................75 B. Undisclosed Self-Dealing .................................................................................................78 C. Official Misconduct ..........................................................................................................82 D. Abuse of Public Trust Sentencing Enhancement ........................................................83 VIII. Tax and Money Laundering .................................................................................................... 85 A. Money Laundering Proposals .........................................................................................86 1. Structuring .......................................................................................................................87 2. Criminal Monetary Transactions .................................................................................91 B. Tax Proposals ....................................................................................................................94 1. Aggregation of Tax Loss Across Years ......................................................................95 2. Disclosure of Tax Information in Non-Tax Prosecutions .....................................97 3. Particular Effect Jurisdiction ........................................................................................98 4. Defrauding the Government .................................................................................... 100 IX. Conclusion .............................................................................................................................. 103 I. Executive Summary A. Introduction The criminal law in New York State has not undergone a comprehensive revision since the Bartlett Commission drafted the “new” Penal Law in 1965, which was intended to be a “complete reconstruction” of the existing Penal Law dating back to 1909.1 Derived from the American Law Institute’s Model Penal Code, but still very much New York’s own product, the Bartlett Commission’s Penal Law was regarded as “the most sophisticated legis- lation yet achieved in the evolution of a twentieth century criminal code.”2 With respect to white-collar crime, however, the 1965 Penal Law was relatively rudi- mentary. It contained provisions against Larceny, Forgery, False Written Statements, Bribery, and Fraud Against Creditors, but little else. This is understandable, as neither New York nor federal prosecutors had yet made the concerted and widespread efforts against fraud and corruption that started in the 1960s, but did not gain full steam until much later. Nor did we have the benefit of the experience gained during the last five decades in the history of fraud, corruption, and chicanery of all sorts. And with the 21st century, of course, has come a revo- lution of commerce and technology, taking us from an industrial world where large corpora- tions were beginning to exploit expensive computer technology, to a technological one where almost everyone – including criminals – has access to once-unimaginable electronic marvels. In short, although in 1965 there did not seem to be much reason to go further than the basic crimes recommended by the Bartlett Commission, the intervening years have brought an evolution of crimes and factual scenarios not contemplated by the Commission: transnational cybercrime rings, the
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