85 A.D.3d 1
N.Y. App. Div.2011Background
- This is an appeal concerning enterprise corruption under Penal Law § 460.20 and the definition of criminal enterprise under § 460.10(3).
- The charged enterprise alleged an Internet-enabled cybercrime operation using Western Express as a clearinghouse to traffic stolen credit card data and launder proceeds.
- Evidence included computer data, money orders, forged cards, and emails showing Western Express as intermediary for buyers and sellers of stolen data.
- Vassilenko (president) and others purportedly expanded Western Express from legitimate services into a full-service platform for illicit transactions with electronic currency.
- The grand jury heard expert and investigative testimony describing how egold/WebMoney facilitated anonymous purchases and money laundering, with Western Express earning commissions.
- The Supreme Court, by a divided majority, reversed lower court dismissal and reinstated enterprise-corruption counts; the dissent would affirm dismissal for lack of an ascertainable structure.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the grand jury evidence show an ascertainable structure distinct from a pattern of criminal activity? | People contend Western Express formed a structure enabling ongoing crime beyond individual acts. | Defendants argue participants acted at arm's length with no shared structure or hierarchy beyond the crimes charged. | Yes; the enterprise had an ascertainable structure distinct from the pattern. |
| Is a hierarchical structure required to prove an enterprise under the OCCA? | Evidence of planning and coordination suffices even without a formal hierarchy. | No need for a rigid hierarchy; structure can be nontraditional. | A nonhierarchical but ascertainable structure can satisfy the statute. |
Key Cases Cited
- Boyle v United States, 556 US —, 129 S. Ct. 2237 (U.S. Supreme Court 2009) (RICO enterprise structure need not be hierarchical; must be an association of individuals with longevity and common purpose)
- Conigliaro v. State, 290 A.D.2d 87 (N.Y. App. Div. 2d Dept. 2002) (enterprise capable of ongoing criminal activity beyond individual acts; supports broader enterprise concept)
- People v. Nappo, 261 A.D.2d 558 (N.Y. App. Div. 2d Dept. 1999) (no ascertainable structure beyond the criminal incidents; used to test enterprise requirement)