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.
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