Facts
- Jeffrey Lessoff was a partner in the law firm Lessoff & Berger.
- In personal-injury matters, Lessoff routinely referred clients to a radiologist for examinations and written injury reports.
- The People alleged that Lessoff instructed the radiologist to falsify the reports to strengthen or inflate claims submitted to insurers and used in litigation.
- The radiologist cooperated with law enforcement and recorded telephone conversations with Lessoff about altering the reports.
- No grand jury evidence implicated any members of the firm other than Lessoff.
- A grand jury indicted the Lessoff & Berger partnership on charges including insurance fraud, falsifying business records, and attempted grand larceny.
- For reasons not central to the motion, some counts were dismissed for lack of evidence and others were reduced (including to attempt charges), but counts remained pending against the partnership.
- The partnership moved to dismiss the indictment as against the firm, arguing that the evidence showed, at most, wrongdoing by Lessoff alone and did not show knowledge or participation by other partners.
Issues
- Whether, under New York Penal Law, a law partnership may be indicted and prosecuted as a criminal “person” for offenses such as insurance fraud, falsifying business records, and attempted grand larceny.
- Whether an indictment may stand against a partnership when the grand jury evidence shows only one partner committed the alleged acts, and there is no proof that other partners knew of or took part in the wrongdoing, where the acts were allegedly done in the firm’s name and in the course of the firm’s business.
Decision
- The court denied the partnership’s motion to dismiss the indictment.
- The court held that a partnership, including a law partnership, may be charged as a “person” under the Penal Law where the statute and context make entity liability appropriate.
- The court concluded the indictment could proceed against the partnership even though only Lessoff was shown to have acted, because the alleged conduct was tied to partnership business and carried out in the name of the firm with an expected financial payoff to the firm.
Legal Principles
- New York Penal Law § 10.00(7) defines “person” to include a partnership “where appropriate,” allowing criminal prosecution of a partnership as an entity.
- Statutes aimed at fraud against insurers may, by their terms, reach non-natural persons (including firms), supporting entity prosecution when the charged conduct fits the statute.
- A partnership may be held criminally responsible for crimes committed by a partner when the partner acts in the course of partnership business and in the firm’s name, seeking outcomes that would benefit the firm.
- Entity liability is not defeated merely because other partners lacked knowledge or did not participate, when the charged acts are attributable to the partnership’s business operations and asserted benefit.
- The court treated partnership liability as consistent with established treatment of collective entities (including corporate criminal liability concepts) and with partnership-law principles that place responsibility on the firm for a partner’s wrongful acts committed in the ordinary course of business.
- Public interests specific to the legal profession support allowing prosecution of law partnerships when a partner’s alleged crimes are committed under the firm’s banner and connected to the firm’s work.
Conclusion
People v. Lessoff & Berger held that a law partnership may be indicted as a criminal “person” under New York law and may face prosecution for insurance fraud, falsifying business records, and attempted grand larceny based on alleged wrongdoing by a single partner, even without evidence that other partners knew of or participated in the conduct, where the acts were allegedly carried out in the firm’s name and in connection with the firm’s business for the firm’s expected gain.