We Can Help You Fight Charges of Enterprise Corruption

The Blanch Law Firm is a premier New York criminal defense firm for those facing enterprise corruption charges.

Our lawyers have over 50 years of experience fighting enterprise corruption and conspiracy charges in federal court.  Our background working with the New York District Attorney’s Office sets us apart from our competition and gives us a unique perspective into prosecution tactics.

Our client was charged with enterprise corruption and was alleged to be the mastermind of a fraud worth over $5 million.

Enterprise corruption charges carry severe penalties.  Our client was facing mandatory jail sentences, civil penalties like fines, and even the forfeiture of their money and property.

We were ultimately able to secure a disposition with no jail time and a civil penalty.

If you have been charged with enterprise corruption or would like to learn more about enterprise corruption and the related charges discussed below, call the Blanch Law Firm at (212) 736-3900 for a free legal review of your case.

What is an “enterprise?”

An “enterprise” can be considered legitimate or criminal.

  • A legitimate enterprise is an entity of one or more people who are engaged in business, commercial, professional, industrial, charitable, social, political, or government activity.[1] This can include any partnership, corporation, association, government agency, charity, or labor union.
  • In contrast, a criminal enterprise is a group of people who engage in a pattern of “repeated or continuous” criminal conduct. These entities have a distinct structure, apart from their criminal activity, and have a criminal purpose that extends beyond the commission of individual criminal acts.

Enterprise Corruption – (Class B Felony)

N.Y. Penal Law § 460.20

Charges of enterprise corruption differ from other criminal charges.  Most criminal charges only require a single criminal act to violate a statute.

Enterprise corruption, on the other hand, requires a defendant to commit three or more criminal acts before they can be charged with enterprise corruption.[2]

The statute requires that of the three criminal acts:

  • At least two are Class B felonies–not including conspiracy;
  • One of the felonies occurred within five years of the completion of the criminal act; and
  • Each act occurred within three years of the prior act.

Typical enterprise corruption charges include:

  • Financial crimes like money laundering and identity theft;
  • Cyber crimes like online advertising for illicit items;
  • White collar crimes like corruption and bid-rigging;
  • Human and drug trafficking; and
  • Violent crimes like burglary and theft.

You may be charged with “enterprise corruption” if you had:

  • knowledge of an existing criminal scheme or “enterprise;” and
  • you intentionally participate in the affairs of that enterprise; or
  • invested in that enterprise; or
  • acquired any interest in that enterprise; or
  • spent any of the money made by that enterprise.

Knowledge of the ongoing criminal conduct to is a crucial element to a charge of enterprise corruption and it is not easy for prosecutors to prove.  Intent refers to your conscious objective or purpose.[3]

In order for prosecutors to convict an employee or someone associated with the criminal enterprise, they must prove that the defendant intentionally conducted or participated in the affairs of that criminal enterprise.

“Pattern of Criminal Activity”

N.Y. Penal Law § 460.10(4)

A pattern of criminal activity requires three or more criminal acts which were committed within 10 years of the completion of the criminal act.

These cannot be isolated incidents, nor can they be so closely related and connected in point of time or circumstance of commission as to constitute a single criminal offense.

Enterprise Corruption Limitations

N.Y. Penal Law § 460.25

  • Reinvesting Corrupt Funds. You will not be considered to have acquired or maintained an interest in an enterprise if you invest proceeds derived from the criminal activity back into the enterprise.[4]
  • Purchasing Securities in a Corrupt Company. Purchasing securities in a corrupt company, without the intent to control or participate in it, is not unlawful, as long as the amount purchased does not amount to more than five percent of the outstanding shares and the position in the company does not allow you to elect one or more directors. [5]
  • Making a Deposit in a Financial Institution. Making a deposit or maintaining an account in a bank which creates an ownership interest in that institution is not unlawful.[6]
  • Purchasing Property with a Corrupt Individual. Purchasing shares in a co-operatively owned residential or commercial property with a corrupt individual is not unlawful.[7]
  • Purchasing Non-Voting Shares in a Corrupt Limited Partnership. As long as your intent in purchasing the shares was to make an investment, and there was no intent to control or participate in the control of the partnership, your simply owning shares is not unlawful.

Aggravated Enterprise Corruption – (Class A-1 Felony)

N.Y. Penal Law § 460.22

A charge of aggravated enterprise corruption should only be considered after the defendant has been found guilty of enterprise corruption.

Aggravated enterprise corruption requires that two or more of the acts that constitute the pattern of criminal activity in the original enterprise corruption charge are class B felonies or higher and that at least two of them involve armed felonies[8] or the criminal purchase or disposal[9] of a firearm.[10]

Prosecutors Must Prove 5 Elements

In order to be found guilty of enterprise corruption, the prosecution is required to prove the following five elements beyond a reasonable doubt:

  1. That on or about the dates in question, a criminal enterprise existed;
  2. That during that period the defendant had knowledge of the existence of that criminal enterprise and the nature of its activities;
  3. That during that period the defendant was employed by or associated with that criminal enterprise;
  4. That during that period the defendant participated in the affairs of that criminal enterprise by participating in a pattern of criminal activity.
  5. That the defendant did so intentionally.

A person charged with enterprise corruption must have knowledge, not only of the existence of a criminal enterprise, but also of the nature of its activities.

If the prosecution is unable to prove even one of these elements, beyond a reasonable doubt, the jury will be instructed to find the defendant not guilty.  Therefore, your attorney’s objective will be to cast doubt on each element.

Prosecutors Must Prove These Elements Beyond a Reasonable Doubt

In total, prosecutors are required to prove at least three crimes in every enterprise corruption case.

This can lead to a ton of evidence to organize, countless technical details to consider, and a long and drawn out trial.

This is because the “burden of proof” that prosecutors face is that they must prove each element of the crime “beyond a reasonable doubt.”

As the chart below demonstrates, this is an extremely heavy burden for the prosecution to bear because even the slightest bit of doubt as to any one of the elements of the crime can warrant a not guilty verdict.

Conspiracy to Commit Enterprise Corruption

Since cases of enterprise corruption usually involve multiple defendants, conspiracy is commonly added as an additional count in these cases.

A “conspiracy” involves two or more people–known as “co-conspirators”–who agree to participate in criminal activity.  For example, if your friend asks you to rob a bank, and you agree to participate, you have engaged in a conspiracy to commit a robbery.

Federal law requires at least one party to the conspiracy to have committed an “overt act” in furtherance of the crime.  Therefore, simply talking about robbing a bank with your friend may not subject you to criminal liability for conspiracy, unless your friend actually goes through with it.

Keep in mind, this “overt act” requirement does not apply to federal drug conspiracy cases.[11]

But wait… there’s more.

“Co-conspirators” are criminally liable for all actions taken on by all other co-conspirators.  Even if you did not know the identity of the other co-conspirators, or what role they played in the conspiracy, you may still be held criminally liable for their actions.

These principles of agency apply no matter how large or small a role you played in the conspiracy.  Therefore, your very minor role may have very serious consequences.

As long as the prosecution can make an argument that your actions were conducted to further the conspiracy or conceal the conspiracy, you may be charged with conspiracy.

However, most federal white collar crimes require some form of knowledge or intent in addition to an “overt act” by one of the parties. Therefore, the prosecution must prove that you had knowledge of your friends’ intention to rob the bank, or that you intended to help him rob the bank.

Racketeer Influenced and Corrupt Organization Act – 18 U.S.C. § 1961

The “RICO” Act, codified under 18 U.S.C. § 1961-1968, grants federal jurisdiction over individuals engaged in “continuous or repeated” criminal conduct on behalf of a criminal enterprise.

Even if all you did was order someone else to engage in the criminal act, and did not engage in the criminal act yourself, you can still be charged with crimes related to enterprise corruption and racketeering.

“Pattern of Racketeering Activity”

RICO-related charges focus on patterns of criminal behavior–as opposed to a single criminal act.  

Patterns of criminal behavior involve multiple criminal acts and open the door to multiple witnesses and more evidence.

Because of this, RICO-related charges are very complex and can involve a ton of technical details in order to defend yourself against each piece of evidence and each crime.

In order to be found guilty of violating the RICO statute, the prosecution must prove beyond a reasonable doubt that:

  1. An enterprise existed;
  2. The enterprise affected interstate commerce;
  3. The defendant engaged in a pattern of racketeering activity;
  4. Associated with or employed by an enterprise; or
  5. Conducted or participated in the conduct of the enterprise through a pattern of racketeering activity by the commission of at least two acts of racketeering.

A “pattern of racketeering activity” requires at least two acts.[12]  Anyone who commits at least two acts of racketeering activity, from a list of 35 crimes, can be charged with engaging in a “pattern of racketeering.”

However, in order to be charged with engaging in a “pattern of racketeering,” you must have engaged in both of the acts within a 10-year period and the acts must relate back to a larger criminal “enterprise”.

An “enterprise” can include any individual, partnership, corporation, association, or other legal entity, as well as any union or group acting as an association–even if they are not a legal entity.[13]

Criminal Penalties: Fines, Up to 20 years Imprisonment, or Both

Charges of enterprise corruption and racketeering carry a mandatory minimum term of imprisonment.  Therefore, if you are convicted, probation without prison time is not an option.

  • The minimum sentence for enterprise corruption is 1 to 3 years.
  • The maximum sentence for enterprise corruption is 8 to 25 years.

According to the RICO Act, if the violation is based on criminal activity that holds a maximum penalty of life imprisonment, you may also be sentenced to life imprisonment.

Fines of up to $25,000 and the seizure and forfeiture of your property is also a possibility.

If you are convicted of enterprise corruption or racketeering, you may be required to forfeit any ill-gotten gains or interest in any business related to the “racketeering activity.”[14]

The federal government is also entitled to seize any property or assets used “in furtherance” of the criminal activities.[15]  This could mean seizing your car if you used it to transport any unlawfully obtained money or property.

Sounds crazy? It’s not, and it happens all the time…

Civil Penalties: Forfeiture of Your Money and Assets

Ongoing criminal organizations may be subject to civil causes of action like injunctions and restraining orders to prevent them from continuing to carry out the alleged corrupt or fraudulent act.[16]

When the U.S. Attorney decides to indict someone for financial crimes like enterprise corruption, racketeering, or money laundering, they have the option to seek a pre-trial restraining order to temporarily seize your assets and prevent you from using, transferring or concealing the money or property.[17]

In many cases, charges of enterprise corruption and racketeering can force defendants to plead guilty to lesser charges, simply because the seizure of their assets would make it difficult to pay their defense attorney.

RICO statutes even provide a cause of action for private individuals to sue you for any damages you may have caused to their business or property.[18]

8 Best Defenses to Enterprise Corruption

Any activity you conduct in association with an underlying crime can lead to charges of enterprise corruption if you have the requisite knowledge and criminal intent.

However, it is not easy for prosecutors to prove you had the requisite knowledge and criminal intent at the time you carried out the alleged corrupt activities.

  1. You did not have knowledge of the “criminal scheme.”
  2. You lacked the criminal intent necessary to be found guilty.
  3. You did not agree to the conspiracy.
  4. You withdrew from the conspiracy or criminal enterprise.
  5. Your business was not related to the criminal activity.
  6. You did not know you were investing in a criminal enterprise.
  7. You did not know the money you were spending was derived from criminal activity.
  8. You did not intend to control or participate in the control of the corrupt partnership or company you invested in.

5 Things Everyone Needs to Know About “Enterprise Corruption”

  1. In New York, charges of “enterprise corruption” require a defendant to commit three or more criminal acts before they can be charged.  The statute requires that of the three criminal acts: (i) at least two are Class B felonies–not including conspiracy, (ii) one of the felonies occurred within five years of the completion of the criminal act; and (iii) each act occurred within three years of the prior act.
  2. Patterns of “enterprise corruption” provide prosecutors with more evidence. Patterns of “enterprise corruption” provide prosecutors with more evidence than they would normally have in cases involving a single criminal act.  The more evidence they have, the more charges they will bring.  The more charges they bring, the more complex the case will become.
  3. Charges of “enterprise corruption” and “racketeering” can lead to imprisonment for up to 25 years. In addition to imprisonment, criminal forfeiture and civil penalties in the form of restitution may also be in order.
  4. You may be liable for the actions of your co-conspirators. Principles of agency apply no matter how large or small a role you played.  Even if you did not know the identity of the other co-conspirators, or what role they played in the conspiracy, you may still be held criminally liable for their actions.
  5. At least one party to the conspiracy to have committed an “overt act.”  Most federal white collar crimes require some form of knowledge or intent in addition to an “overt act” by one of the parties. (Unless you are charged with federal drug conspiracy, then no “overt act” is required to be found guilty.)

Recent Cases of Enterprise Corruption in the News

  1. 64 Individuals Charged With Drug Trafficking in Puerto Rico

On September 18, 2018, sixty-four individuals were indicted in an alleged drug conspiracy.  According to federal prosecutors, the sixty-four individuals created a criminal organization to sell marijuana, cocaine, and heroin.

Some of the individuals indicted were members of the U.S. Postal service who were allegedly aware of the shipments of controlled substances and held the packages until other members of the alleged conspiracy could pick them up.

Members of the conspiracy included police officers who allegedly provided information to co-conspirators regarding avenues to avoid police detection and advance the conspiracy.

As discussed in our “5 Things Everyone Needs to Know About Enterprise Corruption” section, groups of individuals who are charged with conspiracy are often blanketed with the same charges as every other co-conspirator who may have contributed to the furtherance of the crime in some way or another.

“Marginal players,” like website developers who develop websites for businesses who eventually use the site for illicit activity or car services who drive women to meet clients for sex work, are often charged as equal participants in a larger picture of an “enterprise” that they may know little or nothing about.

The Blanch Law Firm is fighting for these business owners rights to ensure that they do not get convicted or plead guilty to trumped up charges of conspiracy and racketeering if they do not have the mental state required to be found guilty.

To speak with a federal enterprise corruption attorney now, call the Blanch Law Firm now at (212) 736-3900.  We have over 50 years of experience fighting federal corruption and conspiracy charges and we can help advise you or your company on these issues.

To see the FBI press release of the case described above, click this link, or copy the URL below:

  1. 7 Active NYPD Officers and 42 Other Individuals Indicted for Corruption

On September 13, 2018, in Queens, New York, Ludwig Paz and his wife, Arelis Peralta, were indicted along with 7 active NYPD officers and 40 other individuals for enterprise corruption, promoting prostitution, hindering prosecution, conspiracy and dozens of other federal crimes related to gambling.

According to prosecutors, the pair were allegedly running a prostitution and gambling ring which grossed over $2 million in thirteen months between August 2016 and September 2017.

This is indictment is just an accusation.

It would be reasonable to assume that not all of the 49 total individuals that were charged shared the same criminal intent to carry out this “scheme.”

And it would be reasonable to assume that not all of the individuals charged had knowledge of the extent of the criminal “enterprise.”

In order to avoid being prosecuted as an equal participant in a crime they may not have knowingly committed, these 49 individuals and their attorneys will need to develop a plan to combat the evidence against them by constructing the strongest defense possible.

If you are facing an investigation or charges of racketeering or you are concerned about possible liability related to your business activities, call the Blanch Law Firm now at (212) 736-3900.  Our lawyers have over 50 years of experience fighting corruption and conspiracy charges in federal court and we are here to help you.

To see the NYPD press release, click this link, or copy the URL below:

  1. Buffalo, New York, RICO Conspiracy

In July of 2018, Jack Wood plead guilty to charges of RICO conspiracy after members of his motorcycle club used his van, without his knowledge, to conduct a drive-by shooting in upstate New York. The shots fired did not result in any injuries.

Mr. Wood was one of 20 members of the Kingsmen Motorcycle Club (KMC) to be charged in association with this case.

Normally, the situation described above would not have resulted in criminal charges for Mr. Wood.

However, when Mr. Wood was questioned about the shooting, he allegedly made evasive and misleading statements, and continued to make incomplete and misleading statements before a federal grand jury.

These incomplete and misleading statements are what ultimately led to him facing federal prison for conspiracy–not the fact that his car was used in a drive-by shooting–because his friends used his van without his knowledge.

18 out of the 20 members of charged have been convicted.

Situations like these can be avoided with the advice and adequate assistance of counsel.  Your attorney should work with you to ensure that you are not putting yourself in precarious situations that may lead to charges of obstruction and conspiracy.

The attorneys at the Blanch Law Firm understand how important your freedom is and we can help advise you if you are facing charges related to organized crime, enterprise corruption, conspiracy or racketeering.

To speak to a federal enterprise corruption attorney, call the Blanch Law Firm now at (212) 736-3900.  We have handled many federal RICO cases and we are here to advise, counsel, and defend you against charges of enterprise corruption.

To see the FBI press release, click this link, or copy the URL below:

Let Our Attorneys Earn Your Trust

A serious defense to enterprise corruption requires a sophisticated strategy.  Our lawyers have over 50 years of experience defending our clients against the FBI, Manhattan District Attorney’s Office and the Office of the Attorney General and we are prepared to defend you against the most serious allegations of enterprise corruption.

False allegations, unruly employees, probing investigations and overzealous prosecutors have led to many legitimate business owners facing charges of enterprise corruption.

If you have been charged with enterprise corruption, please do not hesitate to call the Blanch Law Firm at (212) 736-3900 for a free legal review of your case.

 

[1] NY Penal Law §§ 460.10(2), 175.00(1).

[2] N.Y. Penal Law § 460.10(4).

[3] N.Y. Penal Law §15.05.

[4] N.Y. Penal Law § 460.25(1).

[5] N.Y. Penal Law § 460.25(2)(a).

[6] N.Y. Penal Law § 460.25(2)(b).

[7] N.Y. Penal Law § 460.25(2)(c).

[8] “Armed felonies” are defined as a species of a “violent felony offense.” See C.P.L. § 1.20, subdivision forty-one.

[9] N.Y. Penal Law § 265.17.

[10] N.Y. Penal Law § 460.22.

[11] U.S. v. Shabani, 513 U.S. 10 (1994) held the “overt act” requirement does not apply to federal drug conspiracy cases.

[12] 18 U.S.C. § 1961(5).

[13] 18 U.S.C. § 1961(4).

[14] 18 U.S.C. § 1963(a)(1)-(2).

[15] 18 U.S.C. § 1963(a)(3).

[16] 18 U.S.C. § 1963(d)(1)-)(2).

[17] Id.

[18] 18 U.S.C. § 1964(c).