Last Updated on: 15th October 2023, 12:58 pm

New York Scheme to Defraud Charges Explained

New York has several laws that make it a crime to engage in schemes to defraud others. These charges can range from misdemeanors to felonies, depending on the specifics of the alleged scheme. This article will explain the different degrees of scheme to defraud charges in New York and what they involve.

What is a Scheme to Defraud?

A scheme to defraud refers to an ongoing, systematic plan to obtain money or property from others through fraudulent means. This is different from a single act of fraud or theft – scheme to defraud requires an overarching plan with multiple actions taken in furtherance of the scheme.

Some examples of schemes to defraud include Ponzi schemes, certain investment frauds, some types of identity theft, and systematically overbilling for services. The key is that there is an intentional, thought-out plan to repeatedly deceive and take advantage of victims over time.

Elements of a Scheme to Defraud

For a scheme to defraud charge in New York, the prosecution generally must prove:

• The defendant engaged in an ongoing, systematic course of conduct – i.e. a “scheme”
• The defendant had intent to defraud either:
  • More than one person, or
  • Obtain property from more than one person
• The defendant used false or fraudulent pretenses, representations, or promises to further the scheme
• The defendant obtained property from one or more victims

The scheme does not have to involve the exact same actions each time. But there does need to be a pattern of fraudulent conduct all aimed at accomplishing the goals of the overarching scheme.

Scheme to Defraud in the Second Degree

Under New York Penal Law §190.60, Scheme to Defraud in the Second Degree is a Class A misdemeanor. This charge applies when:

• The defendant engaged in an ongoing, systematic scheme
• They intended to defraud more than one person or obtain property from more than one person
• They used false or fraudulent pretenses, representations or promises
• They obtained property from at least one identified person

For this charge, the prosecution only needs to prove the identity of one victim who lost property. They do not have to prove the identities of any other intended victims.

If convicted of Scheme to Defraud in the Second Degree, a defendant can face up to one year in jail. They can also get probation up to 3 years, and be ordered to pay fines.

Scheme to Defraud in the First Degree

Scheme to Defraud in the First Degree is a more serious felony charge under NY Penal Law §190.65. There are three ways this charge can apply:

1. 10 or More Victims – The defendant intended to defraud or obtain property from 10 or more people, and obtained property from at least one identified person. This is a Class E felony.
2. Over $1000 Value – The defendant intended to defraud or obtain property from more than one person, and obtained over $1000 in property from one or more identified people. This is also a Class E felony.
3. Vulnerable Elderly Victim – The defendant intended to defraud more than one person, at least one of whom was a “vulnerable elderly person.” This is a Class E felony.

A “vulnerable elderly person” refers to someone over 60 years old who has an age-related disease or infirmity that makes them unable to adequately care for themselves.

The penalties if convicted of Scheme to Defraud in the First Degree can include 1 to 4 years in state prison. The defendant may also get probation up to 5 years, or a conditional discharge. Fines up to $5,000 or double the amount obtained through the scheme can also be imposed.

Scheme to Defraud the State

New York also has a specific statute, NY Penal Law §190.70, that makes it a crime to engage in a systematic scheme to unlawfully sell prescriptions and defraud the state. This involves things like systematically selling fake prescriptions or billing Medicaid for unnecessary prescriptions.

To be guilty of this charge, the defendant must:

• Engage in an ongoing scheme to unlawfully make, sell, deliver, or offer prescriptions for sale
• Have intent to defraud the state
• Obtain over $1000 in goods/services or cause the state to reimburse over $1000 due to the scheme

This is a Class A misdemeanor with penalties similar to Scheme to Defraud in the Second Degree.

Common Defenses

There are several defenses that may apply in New York scheme to defraud cases:

• No intent – If the defendant did not actually intend to defraud others, this negates the intent required for a scheme to defraud charge.
• No ongoing scheme – If the conduct was not part of an overarching, ongoing scheme, but rather isolated incidents, scheme to defraud may not apply.
• No false pretenses/representations – If the defendant did not make false statements or misrepresentations, this element may be lacking.
• Lack of obtaining property – If the defendant did not actually succeed in obtaining property from victims, the final element may not be met.
• Mistake – The defendant may have made an honest, reasonable mistake rather than intentionally deceiving people.
• Entrapment – Law enforcement induced the defendant to commit the scheme to defraud.

An experienced New York criminal defense attorney can evaluate the specifics of your case and determine if any defenses may apply to fight the charges.

Related Charges

Prosecutors often bring other charges in addition to scheme to defraud, such as:

• Grand larceny – Depending on the value of property allegedly obtained through the scheme.
• Falsifying business records – If false records were created to facilitate the scheme.
• Money laundering – For schemes that involve concealing criminal proceeds.
• Identity theft – For schemes involving stolen personal information.

The penalties you face can become harsher when multiple crimes are charged together. A knowledgeable defense attorney can argue to get charges dismissed or reduced when appropriate given the facts of your case.

Conclusion

Being charged with any degree of scheme to defraud in New York is very serious. These cases often involve complex investigations and allegations. An experienced criminal defense lawyer can carefully evaluate the prosecution’s evidence, build a defense for trial if needed, and seek the best possible resolution to the charges. For anyone facing scheme to defraud charges in New York, contacting a lawyer promptly is critical.