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Grand Larceny by False Promise: The Criminal Defense and Application of the “Moral Certainty” Standard in a New York Grand Larceny Case

Imagine that you’re running a little low on cash. You don’t have money, but you have a skill that can earn you some money. Maybe its construction, or repairing automobiles, or tutoring – the type of work is irrelevant, what matters is that you have a customer and he or she has agreed to pay you in advance. As you’re preparing to begin this extra work, something happens, and suddenly you can no longer perform the job that you promised to do. To make matters worse, you’ve spent the money that your customer has paid you, so you can’t even return the cash. While this turn of events is certainly embarrassing, another potentially harmful consequence looms in the distance – is it possible that you’ve also committed a crime and violated the New York Penal Law (Grand Larceny or Criminal Possession of Stolen Property)? Can your truly innocent error now result in an arrest? Will you need a criminal attorney or criminal lawyer to protect your rights and keep you from jail or incarceration?

Under New York Penal Law 155.05, obtaining property by a false promise, a/k/a/, Theft by False Promise, constitutes the crime of larceny. A person obtains property by false promise when, based upon a scheme to defraud another person, he or she obtains that person’s property by making a promise to do something that he or she actually has no intention of doing. Applying this law to the circumstance described above produces frightening results. Though your promise may have been sincere, the fact remains that you haven’t done what you said you would and you’ve still taken your customer’s money. Put differently, you now possess their property in exchange for a promise that was never performed.

The situation looks bleak; your intentions were good, but possession is 9/10th’s of the law. If the customer alleges that you never really intended to perform the job, that you were lying all along, could you really be convicted of Grand Larceny by false promise? As luck would have it, New York’s highest court considered this very question in People v. Churchill, 47 N.Y.2d 15 (1979). In Churchill, a defendant had recently lost his job. Unable to find work, he started a small business in a field in which he had over 20 years experience: construction. At first, work came slowly, and a number of jobs were completed without incident. But as things picked up, so did his problems.

The defendant accepted a contract for $1,200 to repave two driveways. Rather than put a down payment on the work, the customer paid the full contract price for the construction in advance. A portion of the customer’s funds were used to rent equipment and hire additional workers, and the project began as normal. While this was taking place, the defendant accepted a second construction contract from a different customer for $3,400. He was given a down payment of $2,400, and used $1,300 to purchase supplies for the project. Ultimately, both jobs encountered serious delays, and the work that was completed on each was sub-par at best. Before either job could be finished, both customers terminated the defendant’s services.

One week later, the defendant accepted another contract to repave a driveway, install a sluice, and pour concrete for a garage floor. He charged the customer $2,600 for the work, $2,100 of which was paid up front. The defendant rented machinery and purchased materials, and the job began without incident. While the project was in progress, however, the customer received a visit from the county sheriff, who claimed to be investigating the defendant’s company. Alarmed by the sheriff’s visit and dissatisfied with the slow progress of the defendant’s work, this customer also terminated the defendant’s services.

After numerous complaints regarding the defendant’s shoddy business practices, the district attorney began to take notice. An investigation took place, and for his failure to complete the four jobs, the defendant was charged with four counts of Grand Larceny in the Third Degree (New York Penal Law 155.35), a felony. At trial, prosecutors alleged that the defendant had engaged in a scheme to defraud the four customers, and that he had never actually intended to complete the work that he had promised to perform. The defendant was tried and convicted on three counts of larceny by false promise. He appealed this conviction. In his appeal, the defendant argued that although he had entered into a contract and been paid to perform work that was ultimately never finished, prosecutors had nonetheless failed to prove their case against him.

In evaluating the defendant’s appeal, the Court began by explaining that in this circumstance, the evidence presented at trial must be viewed in the manner that is most favorable to the prosecution. Referencing New York Penal Law 155.05, it noted that in cases involving larceny by false promise, guilt may not be established or inferred from a defendant’s failure to perform a promise by itself. Rather, guilt can only be proven where the facts of the case are “wholly consistent with guilty intent or belief and wholly inconsistent with innocent intent or belief. . .excluding. . .every hypothesis except that of the defendant’s intention or belief that the promise would not be performed.” In this circumstance, such a finding could only be made by looking back to the point at which the promise had been made and determining if the sole explanation for the defendant’s actions was an intent to defraud his customers.

Looking to the evidence presented at trial, the Court found that this substantial burden had not been met. It explained that, in a prosecution for larceny by false promise, guilt must be proven “to a moral certainty.” Though it was true that the defendant possessed significant experience in performing construction, he had almost no experience at managing a construction company. Furthermore, a portion of the funds paid for each job had been used to purchase supplies for the work’s completion. None of the projects had ever actually been terminated by the defendant – rather, the customers had canceled his services in each instance. Finally, while it was true that the defendant had used a portion of each down payment for personal expenses, this was just as likely the result of his dire economic circumstances as a scheme to defraud his customers. Given the evidence, the Court found that it was just as likely that the defendant was an inexperienced novice “whose talents of salesmanship surpassed his ability to manage a business,” as it was that he had committed larceny. Therefore, the Court determined that the prosecution had not met the high burden necessary to establish his guilt of larceny by false promise, and the conviction was reversed.

Obviously, every case is unique, but this legal decision is nonetheless quite significant. Limited in its value to situations such as those examined here, this case has the potential to be utilized by your New York criminal defense attorney to establish your innocence or attack the prosecution’s ability to prove your case beyond a reasonable doubt.

To better educate yourself on the wide variety of New York theft and larceny crimes, review this blog or the websites below. Further information is also available through the listed links.

Established by two former Manhattan Assistant District Attorneys, the New York criminal defense attorneys at Saland Law PC represent clients in all white collar, Grand Larceny and Criminal Possession of Stolen Property investigations, arrests, indictments and trials throughout New York City and the suburban region.

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