Analysis

How The Manhattan DA Hopefuls Stack Up On Financial Crime

Criminal justice reform has been a key battleground in the race to replace outgoing Manhattan District Attorney Cyrus Vance Jr., but many in the crowded Democratic field are also vowing a more robust approach to combating financial crime, placing greater emphasis on offenses such as wage theft and eying changes to the office structure itself.

Top row from left: Tahanie Aboushi, Alvin Bragg, Liz Crotty, Diana Florence. Bottom row from left: Eliza Orlins, Dan Quart, Tali Farhadian Weinstein, Lucy Lang.

As the race reaches its final stretch with the Democratic primary on June 22, candidates have often focused on issues such as curbing prosecution of low-level misdemeanors, decriminalizing sex work and finding alternatives to jail time for many offenses.

However, many of the Democratic candidates have also detailed plans for revamping the office's approach to white collar enforcement. While often seen as mostly federal territory, the Manhattan DA's office has had its share of high-profile white collar cases in recent years — including the ongoing investigation of former President Donald Trump's business — and interviews with most of the field indicate that trend will continue under new leadership.

"The record is pretty clear that the office has been pretty aggressive in fighting white collar crime," said Bennett L. Gershman, a professor at Pace University's Elisabeth Haub School of Law and a former prosecutor with the Manhattan DA's office. "The office has been out front, more so than any DA in the country by far."

Gershman noted that any new district attorney will benefit from having ample resources to address corruption and Wall Street misdeeds, as well as the support of high-caliber prosecutors who are attracted to the job because of the office's reputation.

The office under Vance was criticized for a series of prosecutorial decisions in high-profile cases, such as declining to prosecute movie mogul Harvey Weinstein in 2015 over allegations of sexual misconduct. Vance's office reversed course in another case after more victims came forward in 2017 and ultimately won a conviction on rape and a criminal sexual act. 

Vance has also weathered critiques over the multiyear case against former executives of law firm Dewey & LeBoeuf LLP that ended with one conviction and no prison sentences, and the prosecution of local lender Abacus Bank and two senior officers on mortgage fraud charges, which resulted in acquittals.

Vance's office points to his many accomplishments, including getting $14 billion in fines and forfeitures through investigations of 11 of the world's biggest banks for falsifying records, securing $7.4 million for workers from wage theft prosecutions and establishing an internationally renowned cybercrime unit.

Yet when it comes to economic crimes, the Democratic candidates interviewed for this article believe they can do better — and outlined to Law360 how they would improve white collar enforcement.

Wage Theft and Worker Safety

One issue that unites most of the Democratic field is a heightened focus on protecting workers, including by increasing prosecutions for crimes such as wage theft and for worker safety issues.

Multiple candidates have vowed to create new dedicated worker protection units, bureaus or task forces within the office, with the dedicated mission of going after unscrupulous employers who skimp on workers' pay or allow unsafe workplace conditions to fester. Currently, the office's rackets bureau handles wage theft and worker safety.

Candidate Alvin Bragg, a former state and federal prosecutor, told Law360 that there is no question crimes of wage theft are going under-prosecuted in Manhattan.

"We need more enforcement at the local level on these issues," Bragg said. "I think it's critically important, particularly where we are in these unique economic times."

Former federal prosecutor Tali Farhadian Weinstein, who intends to create a Bureau of Worker Protection within the office, told Law360 that going after economic crimes against workers is especially important during the pandemic, citing reports that wage theft has increased.

"In economic crimes in general, it's not like there's the proverbial dead body and you work your way backward to figure out what happened," Farhadian Weinstein said. "This is a space where we have to train prosecutors and investigators to be proactive, to know what to look for and to have sources that will help seek cases for us to pursue."

Another candidate, Manhattan public defender Eliza Orlins, told Law360 that she has had many clients who have had their paychecks stolen by employers or have been subject to unsafe working conditions — but don't feel they have the power to speak up.

"I think there are so many instances of these things happening where, because of the way the DA's office has operated, people are fearful of coming forward," Orlins said.

She said the Manhattan DA's office has routinely cooperated with and reported people to U.S. Immigration and Customs Enforcement, which can have a chilling effect on immigrant victims' willingness to come forward and report work-related crimes.

A spokesman for the Manhattan DA's office, Danny Frost, disputed this assertion, pointing to a policy memo that states the office doesn't report a witness' immigration status to ICE and only refers defendants to the agency in "rare and exceptional circumstances."

Diana Florence, another candidate and former career prosecutor with the Manhattan DA's office who ran the office's Construction Fraud Task Force, said in an interview she intends to create a Labor Crimes Bureau. It would be an outgrowth of her old task force but would handle all types of workplace crime, from sexual misconduct to wage theft to health and safety violations.

Florence said most district attorneys' offices haven't made wage theft prosecutions a high priority.

"The work that I did in this area really brought wage theft to the district attorneys' offices. It generally was the province of the attorney general, but until recently there weren't many criminal cases being done, and there still aren't a lot of criminal cases being done," Florence said. "The attorney general does more civil cases, so for us, it needs to be criminal."

Civil rights attorney Tahanie Aboushi, who declined an interview, has also campaigned on labor issues, saying that New Yorkers are being preyed upon through wage theft, payroll tax fraud, health care violations and safety violations.

Her campaign stresses that due to the difficulty of bringing civil suits, the prevalence of arbitration clauses and restrictions on class actions, it has become nearly impossible for people to recover damages on their own, and thus it is up to the DA's office to fill the gap.

Not Just Leaving It Up to the Feds

White collar prosecutions are mostly a federal affair, but the Manhattan DA's office, which boasts 521 assistant district attorneys and a baseline budget of $126.1 million, has not shied away from some high-profile, complex financial cases in the past — some more successful than others.

Several of the candidates who spoke to Law360 said there is a unique role for the Manhattan DA's office to play when it comes to combating white collar crime, and the office has the power to do it more effectively.

Bragg told Law360 that the Manhattan DA's office has access to some unique and powerful tools to prosecute complex financial crimes, including New York's powerful anti-fraud Martin Act. Bragg also noted that the U.S. Supreme Court has lately been making it more difficult for some public corruption cases to be prosecuted federally, including through its decision vacating convictions in the "Bridgegate" scandal.

"The court said, 'Look, these aren't federal crimes. Local law enforcement can be looking at this kind of conduct,'" Bragg said. "So I think not only are we well situated, in some senses, we're best situated. And we need to be really vigilant in that space."

Liz Crotty of Crotty Saland PC, another candidate and a former assistant district attorney under longtime Manhattan DA Robert M. Morgenthau, singled out cybercrime and offenses involving cryptocurrency as one area where Manhattan's next top state prosecutor can make a difference.

"These are all industries that happen here in Manhattan, that we really have to be responsive to," Crotty told Law360. "They're hard cases to prove. They're hard cases to investigate, especially with cryptocurrency, because people can do it all over the world and never leave their apartment. But it's incumbent upon the next DA to really be looking at the 21st century and all the different ways we can combat the new wave of crime."

Candidate Dan Quart, a New York state assemblyman, said the issue is not about having a turf war with the U.S. Attorney's Office for the Southern District of New York, but about holding people accountable. As DA for some 1.6 million Manhattanites, Quart said it would be his responsibility to ensure things like securities trading are being conducted fairly and that no one is gaming the system.

"So I don't see that as solely the jurisdiction or solely the work product of the federal government," Quart told Law360. "Equally so, I have a responsibility to the people of Manhattan to hold that sort of criminal conduct accountable in a courtroom."

Florence said the Manhattan DA's office doesn't have to pick and choose, since there are often crimes that violate both state and federal law. Moreover, given the unique position of New York, it's effectively pardon-proof regardless of who is in the White House and because in recent politics, governors generally have been less likely to pardon white collar criminals.

"To me, it's really important that the Manhattan DA's office has a really robust plan — whether it's Wall Street, whether it's real estate, whether it's construction, whether it's any cybercrime," Florence said. "There's a lot of crime that goes unchecked, and the current DA has really only focused on trying to do the headlines."

Farhadian Weinstein said she doesn't believe the Manhattan DA's office should only go after white collar offenses that are "leftovers" from federal law enforcement, but advocated a nuanced approach to the role.

"Historically, the office has sometimes collaborated with the feds, sometimes competed with them and sometimes carved out its own jurisdiction. And I think that all three of those approaches are the right approaches," she said. "Ultimately, I think the mission of this office in white collar crime is the same in its mission in any other kind of crime, which is to go after the people who are harming New Yorkers the most."

Pandemic Fraud

With COVID-19 waning in New York City but far from eradicated, some aspirants for the Manhattan DA's office have ambitious plans to tackle fraud and other financial malfeasance arising from the pandemic.

Candidate Lucy Lang, a former Manhattan prosecutor and head of the Institute for Innovation in Prosecution at John Jay College, told Law360 that she would build a COVID-19 task force to address these sorts of crimes — which often victimize the elderly and vulnerable New Yorkers — and hold people accountable even after the pandemic has passed.

"That's an area that I'm really going to double down on as DA," Lang said.

Lang said she further aims to address the thousands of cases in the Manhattan DA's office that have been backlogged due to the pandemic.

"I've also set down a plan for a sort of pandemic task force that will be intended to prioritize the equitable and efficient resolution of all the cases that are backlogged in the system, some financial and some not. People who have been charged with crimes and haven't had their day in court, and people who have been victimized and have not yet had their case resolved," Lang said.

Frost, the Manhattan DA spokesman, said the office has had a group in its investigation division focused on COVID-19-related fraud since the beginning of the pandemic.

Orlins, the public defender, voiced concerns about the elderly and vulnerable falling prey to COVID-19 related scams, but added that the Manhattan DA's office should also be concerned with protecting the massive public investment in health care by the government.

"If you think about how much in the way of taxpayer dollars have gone into supporting health care providers and making sure they're receiving state-funded medical funding as they're providing medical care to patients, we need to make sure these are truly helping people and that they're not misrepresenting the care they're giving," Orlins said. "I think the misuse of public funds is something that should be investigated proactively."

Quart, the assemblyman, said if any person or corporate entity "double-dipped, tripled-dipped or did anything where it sought to take multiple loans from the government" through misrepresentation, the individual or entity should be prosecuted if there's evidence of such misconduct.

"We will have the resources necessary to address that type of problem that likely did occur during the pandemic," Quart said. "We'll just have to determine how widespread it is."

New Units, Revised Units and Lateral Hires

Candidates are also envisioning new units within the office apart from the worker protection forces, as well as revamping existing bureaus.

Lang said she believes the Manhattan DA's office can be better streamlined to combat economic crimes. She plans to centralize the prosecution of smaller financial frauds and major economic crimes into a single economic crimes bureau.

"That will enable there to be a kind of cross-pollination among more junior and senior attorneys," Lang said. "A sharing and aggregating of resources, including case management systems, forensic analysts, cybercrime experts and interdisciplinary experts who are necessary to support the investigative work on handling financial crime matters at any scale."

Lang also plans to increase lateral hires of experienced white collar attorneys, noting that the nature of economic crime is evolving very fast, from the ubiquitous nature of cybercrime in modern white collar offenses to new information technology.

"I see it as an area that can really be expanded and augmented by bringing folks in with more of that expertise," Lang said.

Orlins wants to create an environmental justice unit, which would be tasked with going after corporations and individuals who break environmental laws. She said much of the debate in the Manhattan DA's race has been about public safety, but it's also a public safety issue when people drink contaminated water or are exposed to hazards like lead paint and toxic mold.

She said environmental threats have disproportionately impacted members of Manhattan's Black, brown and low-income communities.

"We've seen health disparities. We've seen the slow violence of environmental crimes, and when we think about how we can reimagine local law enforcement and really think about these racial, economic and social disparities that exist, we can be on the forefront and have a unit that actually prosecutes crimes where people are perpetuating these patterns of abuse," Orlins said.

Crotty has her eyes set on reviving a public corruption bureau within the office and increasing cooperation with the New York City Department of Investigation and different law enforcement agencies. Under the current office structure, public corruption cases are handled by the major economic crimes bureau.

Florence is also seeking to revamp the public corruption unit, according to her campaign, by pursuing strategic partnerships with nonlaw-enforcement government agencies, unions, and community organizations and leaders.

For his part, Quart has plans to overhaul the office's cybercrime prosecutions. He said Vance's efforts in this area have been focused on large-scale cyber criminal misconduct, which while appropriate shouldn't be the only area of such crimes the office is looking at. Quart proposes redirecting resources to investigate and prosecute everyday cybercrime that affects average New Yorkers.

"Whether it's a credit card scam or a confidence scam ... that steals $2,000, $5,000, $1,500 from a working person. That's the difference between them paying the rent and being able to put food on the table," Quart said. "So to me, that's what the office should reallocate its resources towards."

Farhadian Weinstein is also focused on cyber and intends to devote more resources to the office's investigatory capacity, digital evidence collection and data analyses when it comes to cyber crime.

"I think the office has already invested quite a bit in this, but for me, this is a top priority," she said. "I think that this is an area that is taking off where it is absolutely critical for us to be fully invested and not just in keeping up, but getting ahead of the problem."

--Editing by Philip Shea and Jill Coffey.

Update: This article has been updated to clarify the office's handling of allegations against Harvey Weinstein.


For a reprint of this article, please contact reprints@law360.com.

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