(a) intentionally conducts or participates in the affairs of the enterprise by participating in a pattern of criminal activity; or (b) intentionally acquires or maintains any interest in or control of an enterprise by participating in a pattern of criminal activity; or (c) participates in a pattern of criminal activity and knowingly invests any proceeds derived from that conduct, or any proceeds derived from the investment or use of those proceeds, in an enterprise.
A "pattern of criminal activity" occurs when persons engaged in the corrupt enterprise commit three or more separate "criminal acts," which are not "isolated incidents," in furtherance of the criminal scheme. See Penal Law §460.10(4). Further, the Penal Law defines a "criminal enterprise" as a "group of persons sharing a common purpose of engaging in criminal conduct, associated in an ascertainable structure distinct from a pattern of criminal activity." Penal Law §460.10(3).15
Penal Law §460.10(1) defines what a criminal act is. The list is lengthy, and has been added to over the years by way of amendment, but there are some surprising omissions. Identity theft-related offenses are not eligible as criminal acts,16 nor are Labor Law violations (which traditionally reaped great benefits to labor racketeers), and some tax offenses are while others are not.17
To be charged with enterprise corruption, an individual defendant must (1) have knowledge of the existence of the enterprise and the nature of its activities, and (2) be employed by or associated with the enterprise. Penal Law §460.20(1)(a). The statute requires that a defendant commit at least three qualifying "criminal acts" that are "included in the pattern" and that he did so "with intent to participate in or advance the affairs of the criminal enterprise." Penal Law §460.20(2).18 Additionally, to qualify, two of the acts must be felonies other than conspiracy, two acts (one of which is a felony) must have occurred within five years of the commencement of the action, and each of the acts must have occurred within three years of a prior act. Penal Law §460.20(2)(a)-(c).
While OCCA requires the commission of three pattern actswhich are not so close temporally that they consist of a single criminal transaction(P.L. §460.10(4)(b)) "specialization in one type of criminal activity does not preclude prosecution for enterprise corruption." People v. Conigliaro, 290 A.D.2d 87 (2d Dept. 2002).19
While the legislature intended OCCA to be narrower than RICO in significant ways, they did provide valuable provisions that previously were unavailable to state prosecutors in New York.
In drafting OCCA the legislature appreciated that expanded venue provisions were necessary to combat the many organized crime enterprises that do not limit their criminal activities to a single county. See Penal Law §460.40. Indeed, typical enterprises may involve criminal ventures in more than one county. See People v. Association of Trade Waste Removers of Greater New York, 267 A.D.2d 137, 138 (1st Dept. 1999) (city-wide cartel under auspices of Mafia dominating New York City's private sanitation industry). Without the ability to charge these "out of county" offenses a prosecution would be segmented into many smaller pieces in multiple jurisdictions.20
OCCA also provides additional criminal forfeiture provisions and "triple-the-gain" fines. Penal Law §460.30(5). The legislature's stated intent was to provide prosecutors with "new penal prohibitions and enhanced sanctions, and new civil and criminal remedies [that] are necessary to deal with the unlawful activities of persons and enterprises engaged in organized crime." Penal Law §460.00. The forfeiture provisions also may allow for a defendant to be stripped of any property interest or contractual right that has afforded him a source of influence over the enterprise whose affairs he has controlled. See Penal Law §460.30(1).
Of no less significance, the Court of Appeals has held that accomplice corroboration for each act in a pattern of criminal activity is not required in order to convict a defendant for enterprise corruption; rather, there need only be corroboration for the enterprise in general. People v. Besser, 96 N.Y.2d 136 (2001); accord People v. AS Goldmen, 9 A.D.3d 283 (1st Dept. 2004). This is extremely significant as in many cases a prosecutor is relying on accomplice testimony and under normal circumstances the New York Criminal Procedure Law requires that testimony be corroborated. See C.P.L. §60.22.
While some observers believe that the fallout from Western Express has just begunin late December a panel of the First Department cited it in reversing the enterprise corruption convictions of two executives whose material testing company had falsified documents in connection with construction projects throughout the city, People v. Barone, 2012 WL 6698978 A.D.3d (1st Dept. 201221)the core of the court's decision in Western Express is a plain reading of the original intent of the legislature in enacting OCCA. At the end of the day, although OCCA isn't RICO, it can be in the hands of a prosecutor who knows how to employ it as what it was intended to bean important tool in tackling organized criminal activity in New York state.
Michael A. Scotto, counsel to Meyer, Suozzi, English & Klein, is a former deputy chief of the Investigations Division, chief of the Rackets Bureau, and chief of the Labor Racketeering Unit-Construction Industry Strike Force at the New York County District Attorney's Office.
1. N.Y. Laws of 1986, Chapter 516.
2. Racketeering Influenced Corrupt Organization, 18 U.S.C. §1961 et seq. When OCCA was passed, observers affectionately, or perhaps derisively, referred to it as "Little Rico." See Kessler, "And a Little Child Shall Lead Them: New York's Organized Crime Control Act of 1986," St. John's L. Rev., Vol. 64, Issue 4, (1990); Gerber, "A RICO You Can't Refuse: New York's Organized Crime Control Act," 53 Brooklyn L. Rev. 979 (1988).
3. OCCA was first introduced by state Attorney General Robert Abrams in 1983, as part of his legislative program. Daniel L. Feldman and Gerald Benjamin, Tales From the Sausage Factory: Making Laws in New York State, Ch. V, "The Organized Crime Control Act," p. 119 (SUNY Press 2010).
4. As a class B non-violent felony, enterprise corruption is punishable with a mandatory minimum sentence of 1- to 3-years imprisonment and a maximum of 8 1/3 to 25 years imprisonment. P.L. §70.00)(2)(b) & (3)(b).