What constitutes a financial loss for identity theft?

Twelve percent of household in the U.S. had at least one member of the family experience a form of identity theft during a recent five-year period according to a Bureau of Justice Statistics report entitled Identity Theft by Households. The prevalence of this form of theft offense has spurred allocation of substantial law enforcement resources and the creation of special units to pursue identity theft offenses. In Manhattan, these offenses are prosecuted by the Manhattan District Attorney’s Office Identity Theft Unit, which was formerly the Cyber Crime and Identity Theft Bureau.

There are a range of New York Identity Theft laws that can provide the basis for a prosecution based on the facts and circumstances, such as New York Penal Law 190.78, New York Law 190.79 and New York Penal Law 190.80. The most serious form of Identity Theft under New York criminal laws is Identity Theft in the First Degree (NY PL 190.80). The basic premise of this offense is similar to Identity Theft in the Third Degree (NY PL 190.78) and Identity Theft in the Second Degree (NY PL 190.79 except that a first-degree offense involves property, money or services worth a greater value.

If a person knowingly and with intent to defraud assumes the identity of another person, the person can be charged with identity theft provided the person actually uses the other person’s identifying information. The types of misappropriated information that can provide the basis for an identity theft charge are set forth in the New York Penal Code; they include but are not limited to social security numbers, dates of birth and charge card numbers. First Degree Identity Theft deviates from a second or third-degree offense because the information must be used to obtain the following:

• minimum of $2,000 in money, property or services [NY PL 190.80(1)];
• financial loss to another person in aggregate amount of $2,000 or more [NY PL 190.80(2)].

A first-degree offense can also be based on committing other felonies along with the identity theft offense or on prior convictions for identity theft.

One issue that an experienced Manhattan criminal defense attorney needs to understand about identity theft offenses is the meaning of the term “financial loss”. The case of People v. Rosario, 2013 NY Slip OP. 23260 (Sup. Ct. New York) provides an illustration of how courts determine the amount of a financial loss under any of the multiple variations of New York identity theft.

The defendant worked as an in-home care provider for the purported victim and his girlfriend. The complaining witnesses noticed that sums of money were disappearing from their bank accounts. Law enforcement officers investigated and determined that the defendant used the bank account numbers and personal identifying information of the complaining witnesses. The accounts were used to pay down the defendant’s own credit card balances and charge items to the account of the complaining witnesses. The defendant was charged with two counts of Identity Theft in the First Degree. At trial, the complaining witnesses denied that they gave consent or authorization for any of the transactions at issue in the case.

The aggregate amount of the transactions amounted to close to $7,800, but the defendant contended in a motion to set aside the jury verdict that the complaining witnesses had not suffered a “financial loss”. The defendant argued that the entire amount of the charges were reimbursed in full by the complaining witnesses’ banks. The trial judge denied the motion and upheld the jury’s guilty verdict, and the defendant appealed.

The appellate court noted that the term “financial loss” was not defined by the New York Penal Code. However, the court looked to federal cases involving financial crimes for guidance. The court also considered the legislative intent of the statute, which was to provide reimbursement for out-of-pocket loss, as well as costs or losses incurred because of the act committed against the alleged victim. The court concluded that the objective of the statute was to ensure that all parties who suffer a loss are compensated.

The court found that the defendant caused a “financial loss” in multiple respects. In the case of the complaining witnesses, they were denied use of their funds until they were reimbursed by their banks. The financial institutions also suffered financial harm because they were forced to eat the loss after reimbursing their account holders. Based on this reasoning, the appellate court upheld the defendant’s conviction.

This case demonstrates the subtle distinctions in interpreting statutory language that can be relevant in New York Identity Theft cases. Our experienced Manhattan criminal defense attorneys are former prosecutors who understand the way prosecutors put together prosecutions involving financial crimes. If you or someone close to you is charged with identity theft, fraud, embezzlement or other financial crimes, we invite you to meet with one of our Manhattan criminal defense lawyers at Greco Neyland. Call us today at (212) 951-1300 because we are ready to zealously defend your constitutional rights, future and liberty.