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White Collar Task Force proposal updates fraud, cybercrime laws

Local district attorneys seeking to prosecute white-collar crime are increasingly stymied by state laws that are nearly 30 years out of date, according to statewide panel of prosecutors, defense attorneys and legal experts.

In an effort to better arm prosecutors with the tools to combat sophisticated fraud and cybercrime, the New York State White Collar Task Force this week released a 102-page report with recommendations aimed at modernizing the state’s antiquated fraud and corruption laws. Many of the state’s statutes have gone without substantial revision since the mid- 1980s, well before the advent of smartphones, social media and the explosion of e-commerce, said Erie County District Attorney Frank A. Sedita III.

“We live in a digitized age where information is as valuable, if not more valuable, than traditional notions of wealth, such as chattel, real estate or cash,” said Sedita, who served as co-chairman of the task force.

Members underwent a nine-month, comprehensive process to come up with recommendations aimed at improving the prosecution of tax fraud, money laundering and identity theft in the 21st century. Among them were recommendations to streamline the state’s fraud and trademark counterfeiting laws, including changes that would ensure that perpetrators can be adequately penalized according to the severity of a particular crime.

Currently, state law does not distinguish between a cyber-swindler who schemes to defraud his victims out of $2,000 and one who swindles his victims out of $2 million.

“They’re treated as the same crime, an E felony, which is the lowest felony there is,” Sedita said. “That just doesn’t cut it any more in the modern age.”

The report also includes recommendations for combating identity theft, including proposals to expand laws against computer hacking, as well as various anti-corruption recommendations and laws to protect vulnerable senior citizens from exploitation.

He said one recommendation involves amending criminal procedure law to allow caregivers to accompany elderly victims into grand juries, with the consent of the district attorney.

The task force also seeks to allow prosecutors the right to obtain medical records of mentally impaired victims of bilking schemes, without requiring a waiver from those victims.

Currently, Health Insurance Portability and Accountability Act restrictions prevent prosecutors from getting that consent. The result is that swindlers who get their elderly victims to sign off on a particular fraud are able to argue that they did so with the victim’s consent.

“They may have had technical consent, but they didn’t have meaningful consent,” Sedita said. He said members of the task force plan to present their recommendations to the State Legislature and Gov. Andrew M. Cuomo for consideration.