On television, the internet, radio and print media, it is far from atypical to hear of a dispute between parties – often time famous or affluent people – whereby one side shuts his or her mouth and the other provides an undisclosed sum of monies. Sounds reasonable enough, right? Heck, if they do that in Hollywood and in the corporate realm, why cant you demand compensation for your silence? You pay me and I promise not to expose any bad thing about you. Taking this belief a step further or at least in another direction, can you advise an employer that if he or she does not provide you some form of property, usually a sum of money, you are going to expose them as frauds? Is this whistle blowing? What if there is or was no fraud? Now does it become Blackmail or Extortion? It would be great if this blog would answer any of the scenarios above, or, for that matter, the question that likely caused you to land on the CrottySaland.Com or NewYorkCriminalLawyerBlog.Com websites, but it does not. Each case is different as are all sets of facts. What doesn’t change, however, is the magnitude of criminal exposure you can face in New York if the path you choose to follow is one of Extortion or Blackmail even if you believed you had some legal and civil right to demand money, property or compensation in return for not exposing an employer, colleague, partner, friend, fling, flame, or subordinate (you get the point).
Yes, when it rains it pours. No, not just pours, but it comes down in hail like driving sheets of rain. From catching a flight out of Russia to the United States expecting to traipse around Gotham before heading elsewhere to getting whisked away in handcuffs by the NYPD to the “Tombs” of Manhattan Central Booking, Svetlana Zakharova is arguably soaked to her core. What was initially described by the media as an attempt to extort approximately $50,000 from Eliot Spitzer, was in fact an actual and completed Grand Larceny by Extortion. According to the allegations leveled by a Bronx prosecutor serving as a special prosecutor on behalf of the Manhattan District Attorney’s Office, Zahkarova succeeded in scaring the heck out of Client 9 to the point that he paid his alleged extorter $400,000.
Armed with the new allegations provided at Zakharova’s arraignment in Manhattan Criminal Court, the presiding judge set bail to the tune of $1 million. Right or wrong, excessive or not, not only will Zakharova have time to put her defense together, but selfishly I can now leisurely put my rambling thoughts together to offer a brief analysis of the crimes Zakharova faces.
By now everyone who provided a credit card to Ashley Madison, a real name or an address knows that hackers have exposed their personal information. Sure, what the hackers did was wrong and illegal, but there is little to nothing anyone one of us can do about that. Instead, the issue is now how do you protect yourself from would be fraudsters and criminals who have sifted through the information posted online? What if one of these individuals contacts you? Demands money? Threatens you? Is there any recourse? What, if any, crimes have been committed? Does it matter that the information is arguably public since it has been posted? This blog entry will attempt to answer some of these questions from the perspective of the New York Penal Law. Federal violations will be discussed at a later time.
When we think about a New York larceny (whether it be Petit Larceny or Grand Larceny), most people’s minds immediately conjure up images of black-clad, ski-masked villains entering homes or businesses and making off with other people’s property (technically, that’s actually a Burglary). There are, however, ways that a person can commit larceny without ever donning a ski-mask or even wearing black (surprised?!?!). In New York, a person commits larceny when he or she steals property. Under penal law §155.05, stealing is defined as taking, obtaining, or withholding another person’s property with the intent to deprive that person of it. While “taking” someone’s property generally fits the preconceived notion of how one might commit larceny, other ways in which a person may “obtain” or “withhold” property often do not. One method by which someone might steal property in New York by “obtaining” it, for instance, is through Extortion.
Under NY PL 155.05, a person commits New York Grand Larceny by Extortion when he or she compels or induces another person to give up their property by instilling fear that, if the property is not given, the person will injure them, damage their property, commit a crime, expose a secret, testify against that person, abuse a position as a public servant, or perform any other act intended to harm that person. Though it may seem counter-intuitive that, despite the coercion, a person can be charged with “stealing” something that has been been given to them, a larceny by Extortion is treated no differently in New York than any other type of theft.
Extortion is an ugly word. Merely hearing it conjures up thoughts of violence, threats and blackmail. While we all have our own perception or idea as to what constitutes the crime or offense of Extortion, each state has its own criminal definition or statutes establishing the crime. For New York Yankees General Manager Brian Cashman and his alleged extorter, Louise Neathway, the New York Penal Law defines the relevant law and what prosecutors will pursue over the next few days and months.
One of the more notable crimes under New York’s many larceny crimes and theft offenses is Grand Larceny by Extortion (often called Blackmail). Most experienced White Collar criminal defense attorneys in New York City, Brooklyn, Manhattan, Queens and the neighboring counties deal with the many faces of Extortion and Blackmail as prosecutors levy charges against their clients. Because of this, Extortion can be defined as quite a broad crime. New York Penal Law 155.05(e) lists a breadth of activities that may constitute Extortion…some of it obvious and much of it not at all. Generally paraphrasing the statute, a person is guilty of Larceny by Extortion when he/she obtains property by instilling a fear that if the property is not given, the “bad guy” will do some act that will harm the property owner in some way. In common parlance, as noted above, it is similar to Blackmail – the property owner is compelled to deliver the property because they are threatened. The statute lists the many forms of harm that may constitute Grand Larceny by Extortion, such as: physical injury, damage to property, accusation of a crime, exposing a secret, causing a strike, testifying or withholding information, abusing a position of power. In other words, any threat to perform an act that will harm the property owner in some way.
One of the keys to understanding Larceny by Extortion is that it shares the same broad definition of property that accompanies the Grand Larceny statutes. Property really will include anything of value. Thus, it is not just the obvious – money – that constitutes property, but also a contract for services, or a right of a tenant to possess and occupy an apartment. One New York criminal case directly on this point of law is People v. Spatarella, 34 NY.2d 157. There, Mr. Spartella was convicted of Grand Larceny by Extortion, in violation of NY Penal Law 155.40. Spartella was the head of a garbage collection company. A competitor had been servicing a restaurant in the area, and the defendant wanted the business. Thus, Spartella threatened the competitor with physical injury and the competitor removed their garbage containers from the restaurant. Without the restaurant owner’s knowledge or consent, Spartella started serving its refuse collection needs. The interesting question of law before the court was whether in this situation, where a customer is stolen through intimidation (rather than the more common extortion situation where money is demanded in return for leaving the business alone), the defendant perpetrated Extortion. The court ruled that this did constitute Extortion. The competitor was deprived of the business relationship and the right to service the restaurant. As the court stated, for Extortion purposes property that can be threatened has consistently “included intangible rights.” Another “untraditional” Extortion case shows further how the statute can be extended to encompass different property. In United States v. Ivezaj, 568 F.3d 88, the defendants challenged their convictions under New York’s Extortion laws claiming that the control over intangible property was not “property” that could be “delivered” pursuant to NY PL 155.05. Interestingly, in this case the property gained by threat was control of an illegal gambling operation. The Court of Appeals here, ruled that not only do intangible goods constitute property under New York law, but the control over an illegal gambling ring is a “thing of value” which is “provided for…compensation.” The court rejected the argument that illegally obtained assets and businesses conducted in violation of the law cannot constitute property. In other words, it did not matter that the “victims” of Extortion had no legal right to operate an illegal gambling business.