Opinion
No. 601/10.
2012-09-6
The PEOPLE of the State of New York, Plaintiff, v. John E. HEADLEY, Defendant.
Ronald Margolis, Esq., New York, for Defendant John Headley. Michael Spanakos, Esq., Kings County District Attorney's Office, Brooklyn, for the People.
Ronald Margolis, Esq., New York, for Defendant John Headley. Michael Spanakos, Esq., Kings County District Attorney's Office, Brooklyn, for the People.
MARK R. DWYER, J.
Defendant was charged with Grand Larceny in the Second Degree, Falsifying Business Records, Conspiracy, and related crimes on the theory that defendant and the co-defendant Jacqueline Jackson fraudulently obtained paid assignments from the New York City Transit Authority (hereinafter “NYCTA”) to procure independent medical examinations of plaintiffs who had sued the NYCTA. Defendant is charged with obtaining the NYCTA vendor assignments for his company, Advance I.M.E. Co. (hereinafter “Advance”), by using a fictitious name, thus concealing the fact that the assignments were being awarded to someone who had also been retained as outside counsel for the NYCTA in the defense of personal injury lawsuits—a circumstance which, the People say, would have disqualified him from being paid to procure medical examinations.
Defendant moved for dismissal of the indictment in its entirety. In a written decision and order rendered by this court on June 6, 2012, defendant's motion to dismiss was granted as to all counts except Counts 15 and 16.
Defendant now moves for reargument with respect to Counts 15 and 16, both of which charge Offering a False Instrument for Filing in the First Degree. Defendant contends that the instruments in question-a business proposal and an IRS W–9 form-do not constitute “written instruments” for the purpose of prosecution under PL § 175.35. Defendant argues that the two documents do not constitute written instruments because neither reflected a legal obligation of the NYCTA, indicated that an agreement had been reached between the NYCTA and Advance, or constituted a contract. He further asserts that there is no evidence that the NYCTA was obligated to keep, maintain and pay out money in reliance on these documents or that they were kept or maintained by the NYCTA for the purpose of reflecting its condition or activity. Defendant submits that, as the business proposal and IRS form are not formal or legal documents evidencing legal rights or duties between the NYCTA and Advance, or creating a responsibility of the state to act on them, they therefore were not “instruments” within the purview of the statute.
Penal Law section 175.35 reads as follows:
A person is guilty of offering a false instrument for filing in the first degree when, knowing that a written instrument contains a false statement or false information, and with intent to defraud the state or any political subdivision, public authority or public benefit corporation of the state, he offers or presents it to a public office, public servant, public authority or public benefit corporation with the knowledge or belief that it will be filed with, registered or recorded in or otherwise become a part of the records of such public office, public servant, public authority or public benefit corporation.
Penal Law section 175.00(3) defines “written instrument”:
“Written instrument” means any instrument or article, including computer data or a computer program, containing written or printed matter or the equivalent thereof, used for the purpose of reciting, embodying, conveying or recording information, or constituting a symbol or evidence of value, right, privilege or identification, which is capable of being used to the advantage or disadvantage of some person.
Reading the statute on its face, the documents in question-a business proposal and an IRS W–9 form-fit within the definition. They both contain written or printed matter used for the purpose of reciting or conveying information which is capable of being used to the advantage or disadvantage of some person.
The definition of “written instrument” was added to Penal Law section 175.00 in 1978. (L 1978, ch 233). Defendant adverts to three Court of Appeals cases decided prior to the enactment of the definition in support of the proposition that an “instrument” should be defined as a document that evidences legal rights or duties. In People v. Sansanese, 17 N.Y.2d 302 (1966), the Court held that an application for a driver's license did not fall within the traditionally narrow scope of the term “instrument,” which it noted had been defined as a “formal or legal document in writing, such as a contract, deed, will, bond or lease,” and as a legal document evidencing legal rights or duties of one party to another. In People v. Gottlieb, 36 N.Y.2d 629 (1975), the Court of Appeals applied the exclusion adopted in Sansanese to an application for a certificate of occupancy, holding that it was not an instrument. The Court rejected the application of the broad definition of “written instrument” in Article 170 relating to forged instruments, opining that the Legislature intended the more expansive definition to apply only to items susceptible of deceitful use in a “forgery” sense.
The definition of “written instrument” added to Penal Law § 175.00 in 1978 was identical to the definition of “written instrument” already in Penal Law § 170.00.
In a third case, People v. Bel Air Equipment Corporation, 39 N.Y.2d 48 (1976), the Court of Appeals moved away from the narrow interpretation of “written instrument” previously applied to Article 175 crimes and moved closer to the statutory definition in Article 170, previously applied only to forgery-related crimes. The Court wrote that the term “instrument” is employed in many different contexts in our law and its meaning shifts depending on the context. Bel Air at 54. The Court further noted that the type of document sought to be included in or excluded from the scope of a particular statute varies with the purpose the enactment seeks to serve:
“As we view it, the purpose of section 175.35 is to guard against the possibility that officers of the State or its political subdivisions would act upon false or fraudulent instruments' that had been filed with their offices in the belief that such documents were accurate and true. Section 175.35, which creates a felony level offense, requires proof of an additional element beyond the false filing; the People must establish that the defendant intended to defraud the State.” 39 N.Y.2d 48 at 54.
The Court observed that a document is an instrument as the term is utilized in the statute if it not only falls within the literal scope of the statute but “is of a character that the mischief the statute seeks to prevent would ensue if the document were filed.” 36 N.Y.2d 48 at 54–55.
Defendant argues that the holding in Bel Air is consistent with Sansanese and Gottlieb and supports his theory. Defendant's position is that the focus in Bel Air was on the nature of the documents, and that the Court of Appeals distinguished the instrument in Bel Air, a payment voucher, from the applications for the Certificate of Occupancy and for the driver's license in the earlier cases because the voucher created legal obligations between the parties. Defendant contends that the business proposal and the IRS form here are like the documents in Gottlieb and Sansanese and did not evidence legal rights and duties.
This court reads Bel Air differently. Bel Air formulated a new test for determining if a document is a “written instrument,” in which the focus is less on the legal effect of the document in terms of its ability to impose binding obligations on the parties, and more on “the purpose the enactment seeks to serve.” Bel Air at 54. Moreover, defendant's argument ignores the subsequent amendment through which the Legislature showed it meant the “written instrument” definition in Article 175 to be just as broad as the definition in Article 170—and thus that the Legislature rejected the rule of Sansanese and Gottlieb.
Judge Anthony J. Ferrara read the history the way this court does in People v. Mellish, 4 Misc.3d 1013(A)(N.Y.C Criminal Ct, N.Y. Co., 2004).
This court notes that the 1978 amendment to section 175.00 arguably renders the Bel Air test more restrictive on the definition of “written instrument” than is now proper. But because this court believes the instruments at issue satisfy both the test of 175.00(3), and Bel Air, the issue need not be resolved here.
In this case, in accepting Advance's proposal, the NYCTA acted upon the belief that the business proposal and the W–9 were accurate and true. By concealing his true identity, defendant was interfering with the ability of a government agency to protect itself, and ultimately the public, from potential “mischief” that could result from counsel for the agency separately doing business with the agency. Therefore, whether the documents imposed legal obligations is irrelevant. What matters is that they fall within the literal scope of “written instrument” as defined in Penal Law § 175.00(3): any instrument containing written or printed matter used for the purpose of reciting, embodying, conveying or recording information, which is capable of being used to the advantage or disadvantage of some person. Further, including the documents within the scope of the definition advances the purpose the statute seeks to serve. As this court noted in its June 6 opinion:
Maintaining a fair vendor selection process free of any potential conflicts of interest is a legitimate function of the NYCTA. By concealing his true identity from the NYCTA, defendant created the potential for impeding the NYCTA's ability adequately to defend itself in personal injury lawsuits. Even more fundamentally, identifying vendors accurately is a legitimate function of the NYCTA. (Dwyer, J., June 6, 2012, p. 22)
Notably, subsequent cases have applied the new statutory definition and the test propounded in Bel Air. In People v. Papatonis, 243 A.D.2d 898 (3d Dep't, 1997), in determining whether an application for a security guard license was an instrument for purposes of PL § 175.35, the court held that, “Quite plainly, the application at hand was an instrument containing written matter filed with the State for the purpose of defendant obtaining a security guard license and was therefore capable of being used to his advantage.” Similarly, the business proposal and the IRS form here conveyed information to the NYCTA which was capable of being used to defendant's advantage or to the disadvantage of the NYCTA. In People v. Armitt, 195 Misc.2d 879 (Appellate Term, 2nd Dep't, 2003), an application for a job with the Nassau County District Attorney's office which falsely stated that the applicant had never been convicted of a crime was a written instrument. It contained a false statement or false information which the defendant offered to a public office with knowledge or belief that it would become part of the records of such office. Similarly, in Matter of Dean v. Bradford, 158 A.D.2d 772 (3d Dep't, 1990), an application for employment with a public agency which falsely represented that the defendant had a college degree was properly considered a written instrument under Penal Law 175.00(3). In People v. Jacob, 248 A.D.2d 638 (2nd Dep't, 1998), the Supreme Court's order dismissing charges of Offering a False Instrument for Filing was reversed—vouchers submitted to the State Comptroller's Office were “written instruments” even though their content was not relied upon by the government, as “[t]he purpose of Penal Law 175.35 is to guard against the possibility that” the government would act upon false instruments filed with their offices in the belief that they were accurate. 248 A.D.2d at 639 (Emphasis in original).
In support of his argument that the two documents in question here are not written instruments, defendant also relies on language in this court's opinion dated June 6, 2012. Defendant contends that this court observed that neither of the documents has any of the qualities of a written formal or legal document or created any legal duty, right or responsibility vis-a-vis the parties. In the June 6 decision, this court considered whether the two documents were business records and concluded that they were not.
“In this case, neither the business proposal nor the W–9 form reflects a legal obligation of the NYCTA, as the claim forms in Kisina did. There is no evidence that the NYCTA was obligated to keep, maintain, and pay out money in reliance on the false information submitted by defendant. See People v. Kisina at 160. There is no view of the evidence which would support a finding that the business proposal and the W–9 form are documents that are kept or maintained by the NYCTA for the purpose of reflecting its own condition or activity.... Since the defendant had not yet been selected to provide vendor services, the form was not part of a business record kept or maintained for the purpose of evidencing or reflecting the condition or activity of the NYCTA.” (Dwyer, J., June 6, 2012, p. 21)
But defendant is conflating the definitions of “business record” and “written instrument.” He argues that there is no evidence that the documents were kept or maintained by the NYCTA for the purpose of reflecting its condition or activity. That language, however, is found in the definition of “business record” and is not applicable to the charges for Offering a False Instrument for Filing.
Defendant's motion to reargue is granted and upon considering defendant's arguments, the court adheres to its original decision denying defendant's motion to dismiss Counts 15 and 16.
This constitutes the decision and order of the court.