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Law School Case Brief

People v. Lessoff & Berger - 159 Misc. 2d 1096, 608 N.Y.S.2d 54 (Sup. Ct. 1994)

Rule:

The plain language of N.Y. Penal Law § 10.00(7) authorizes an indictment of the partnership where one of its partners engages in insurance fraud. That section provides that a person, which includes a person charged with a crime-means, "where appropriate," "a partnership." Similarly, the section defining the crime of insurance fraud, N.Y. Penal Law § 176.00, provides that a "person" chargeable with the crime of insurance fraud includes any "firm, association or corporation;" under the Partnership Law, a partnership is an association of two or more persons to carry on as co-owners a business for profit. N.Y. Partnership Law § 10(1). Unmistakably, therefore, the Penal Law applies to a law "firm," whether it be a partnership or a professional corporation, and the law firm may be charged if one partner has committed a crime in the name of the law firm. Presumably, N.Y. Penal Law §§ 60.0160.25if there is a conviction of a partnership, the sentence can be a fine, a conditional discharge, or an unconditional discharge, as for a corporation.

Facts:

Defendant Jeffrey Lessoff, a partner in defendant Lessoff & Berger, a law firm ("Firm"), committed insurance fraud by asking a doctor to alter MRI reports for the benefit of his clients. The doctor was working undercover and recorded the conversations. The People brought an indictment against Lessoff and the Firm. At trial in New York state court, the Firm filed a motion to dismiss the indictment against it and its other partners who had no knowledge of the fraud.

Issue:

Should the motion to dismiss the indictment against the Firm and its other partners who had no knowledge of Lessoff's fraud be granted?

Answer:

No.

Conclusion:

The court denied the motion to dismiss. The court held that application of the New York Penal Law to a partnership when only one partner was alleged to have been culpable could be harsh, but it was rational. The court reasoned that it was analogous to the criminal responsibility of a corporation for conduct of a "high managerial agent." The court held that it was consistent with the settled principle in tort that a partnership was responsible for conversion of funds by one partner, even if the other partners were unaware of the misconduct. The court concluded that criminal liability for one partner's frauds was particularly appropriate in the case of a law partnership.

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