NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5366
SPONSOR: Cruz TITLE OF BILL:
An act to amend the penal law, the general business law and the labor
law, in relation to schemes to defraud and establishing the crime of
harassment of a legal services client; and to repeal certain provisions
of the penal law relating thereto
PURPOSE:
To strengthen legal protections against fraudulent schemes, particularly
those targeting multiple victims or vulnerable individuals, and to
establish criminal penalties for lawyers who harass or exploit their
clients.
SUMMARY OF PROVISIONS:
*Section 1: Establishes legislative intent to combat fraudulent schemes
and unethical practices, particularly within legal services, to protect
the public and uphold fairness.
*Section 2: Repeals and replaces existing Penal Law §§ 190.60 and
190.65, expanding the scope of fraud-related offenses by creating five
degrees of the crime of "scheme to defraud," ranging from a class A
misdemeanor (fifth degree) to a class B felony (first degree) based on
the number of victims and financial harm caused.
*Section 3-6: Amends various sections of the Penal Law, General Business
Law, and Labor Law to reflect the revised fraud statutes and include
these offenses in lists of specified crimes.
*Section 7: Amends larceny statutes to allow aggregation of fraudulently
obtained funds from multiple victims across different counties into a
single charge.
*Section 8: Adds Article 243 to the Penal Law, creating the new crime of
Harassment of a Legal Services Client, with two degrees: *Second Degree
(Class A misdemeanor): When a lawyer withholds client documents or fails
to return unspent retainer funds upon request. *First Degree (Class E
felony): When a lawyer threatens to disclose confidential client infor-
mation, including immigration status, to coerce payment or retention of
services.
*Section 9: Includes a severability clause to preserve the remainder of
the act if any part is deemed invalid.
*Section 10: Establishes the effective date as January 1 following
enactment.
JUSTIFICATION:
Fraudulent schemes and unethical legal practices erode public trust,
harm vulnerable individuals, and exploit consumers seeking essential
services. This legislation addresses these concerns by:
*Strengthening penalties for large-scale fraud operations targeting
multiple victims.
*Expanding protections for elderly and vulnerable individuals dispropor-
tionately affected by fraud.
*Ensuring legal professionals cannot exploit their clients through coer-
cion, threats, or withholding essential documents.
*Allowing prosecution of fraudulent schemes that span multiple jurisdic-
tions by consolidating charges.
By updating fraud statutes and establishing new protections for legal
services clients, this bill upholds justice, deters misconduct, and
safeguards the rights of consumers.
LEGISLATIVE HISTORY:
This is a new bill.
FISCAL IMPLICATIONS:
Minimal administrative costs anticipated for enforcement and prose-
cution.
EFFECTIVE DATE:
This act shall take effect on January 1 following enactment.
