Falsifying business records is a
criminal offense
In ordinary language, a crime is an unlawful act punishable by a state or other authority. The term ''crime'' does not, in modern criminal law, have any simple and universally accepted definition,Farmer, Lindsay: "Crime, definitions of", in Cane ...
in the laws of several
U.S. states
In the United States, a state is a constituent political entity, of which there are 50. Bound together in a political union, each state holds governmental jurisdiction over a separate and defined geographic territory where it shares its so ...
.
New York State
Elements and punishment
Under
New York State law, falsifying business records in the second degree is a class A
misdemeanor
A misdemeanor (American English, spelled misdemeanour elsewhere) is any "lesser" criminal act in some common law legal systems. Misdemeanors are generally punished less severely than more serious felonies, but theoretically more so than admi ...
, while falsifying business records in the first degree is a class E
felony
A felony is traditionally considered a crime of high seriousness, whereas a misdemeanor is regarded as less serious. The term "felony" originated from English common law (from the French medieval word "''félonie''") to describe an offense that r ...
.
[Siven Watt, Norman L. Eisen and Ryan Goodman]
Survey of Past New York Felony Prosecutions for Falsifying Business Records
''Just Security'' (March 21, 2023).
The
elements for the misdemeanor second-degree crime are:
Intent
An intention is a mental state in which a person commits themselves to a course of action. Having the plan to visit the zoo tomorrow is an example of an intention. The action plan is the ''content'' of the intention while the commitment is the '' ...
is an element of the offense; under New York law, the defendant's "intent" is his or her "conscious objective or purpose."
[Anatomy of a Falsifying Business Records Case Under New York Law]
Lippes Mathias LLP (April 4, 2023). The law does not require prosecutors to show that the defendant intended to cause a pecuniary or commercial loss (i.e., depriving a victim of money or property).
The crime becomes one of the first degree, and a felony, when an individual
[
Under New York law, "in any prosecution for falsifying business records, it is an ]affirmative defense
An affirmative defense to a civil lawsuit or criminal charge is a fact or set of facts other than those alleged by the plaintiff or prosecutor which, if proven by the defendant, defeats or mitigates the legal consequences of the defendant's ...
that the defendant was a clerk, bookkeeper or other employee who, without personal benefit, merely executed the orders of his or her employer or of a superior officer or employee generally authorized to direct his or her activities."
Prosecutions
The offense of falsifying business records is commonly prosecuted in New York, and it is a frequent part of white-collar crime
The term "white-collar crime" refers to financially motivated, nonviolent or non-directly violent crime committed by individuals, businesses and government professionals. The crimes are believed to be committed by middle- or upper-class indivi ...
prosecutions brought by district attorneys
In the United States, a district attorney (DA), county attorney, county prosecutor, state attorney, state's attorney, prosecuting attorney, commonwealth's attorney, or solicitor is the chief prosecutor or chief law enforcement officer represen ...
' offices.[ For example, the Manhattan district attorney's office, from January 2022 through April 2023, brought 117 felony counts of falsifying business records against 29 defendants (some individuals and others companies). It is sometimes prosecuted in conjunction with separate crimes, such as petit or grand ]larceny
Larceny is a crime involving the unlawful taking or theft of the personal property of another person or business. It was an offence under the common law of England and became an offence in jurisdictions which incorporated the common law of Eng ...
, offering a false instrument, money laundering
Money laundering is the process of illegally concealing the origin of money obtained from illicit activities (often known as dirty money) such as drug trafficking, sex work, terrorism, corruption, and embezzlement, and converting the funds i ...
, or insurance fraud
Insurance fraud is any intentional act committed to deceive or mislead an insurance company during the application or claims process, or the wrongful denial of a legitimate claim by an insurance company. It occurs when a claimant knowingly attem ...
.[ The crime occurs in different factual contexts: for example, defendants have been prosecuted for falsifying business records as part of a scheme to steal from a company; as part of scheme to fail to report income (and thus evade taxes); for creating or filing fraudulent certificates of ]liability insurance
Liability insurance (also called third-party insurance) is a part of the general insurance system of risk financing to protect the purchaser (the "insured") from the risks of liabilities imposed by lawsuits and similar claims and protects the in ...
as part of a wider fraud scheme; or for creating false applications for benefits.[
In ''People v. Smithtown General Hospital'' (1978), an ]orthopedic surgeon
Orthopedic surgery or orthopedics (American and British English spelling differences, alternative spelling orthopaedics) is the branch of surgery concerned with conditions involving the musculoskeletal system. Orthopedic surgeons use both surgic ...
, a nurse, and a hospital were indicted for allegedly allowing a prosthetic-devices salesman to "participate in a meaningful way" with a total hip arthroplasty, without the surgery patient's consent or knowledge. They were charged with first-degree falsifying business records, the charge being that they "omitted to make true entries in required reports in order to conceal the crimes of unauthorized practice of medicine and assault
In the terminology of law, an assault is the act of causing physical harm or consent, unwanted physical contact to another person, or, in some legal definitions, the threat or attempt to do so. It is both a crime and a tort and, therefore, may ...
."
People v. Smithtown General Hospital
', 93 Misc. 2d 736, 402 N.Y.S.2d 318 (N.Y. Sup. Ct. 1978).[ The case is cited in ]medical
Medicine is the science and Praxis (process), practice of caring for patients, managing the Medical diagnosis, diagnosis, prognosis, Preventive medicine, prevention, therapy, treatment, Palliative care, palliation of their injury or disease, ...
and nursing ethics
Nursing ethics is a branch of applied ethics that concerns itself with activities in the field of nursing. Nursing ethics shares many principles with medical ethics, such as beneficence, non-maleficence, and respect for autonomy. It can be distin ...
texts discussing criminal liability for certain omissions in medical record
The terms medical record, health record and medical chart are used somewhat interchangeably to describe the systematic documentation of a single patient's medical history and health care, care across time within one particular health care provide ...
s.[Helen Creighton]
Legal Significance of Charting — Part I
''Nursing Management'', 18(9), pp. 17-25, September 1987.
Notable cases
Notable people convicted in New York of falsifying business records include:
* L. Dennis Kozlowski
Leo Dennis Kozlowski (born November 16, 1946) is a former CEO of Tyco International, convicted in 2005 of crimes related to his receipt of $81 million in unauthorized bonuses, the purchase of art for $14.725 million and the payment by Tyco of a $ ...
, the former chief executive and chairman of Tyco International
Tyco International was a security systems company incorporated in the Republic of Ireland, with operational headquarters in Princeton, New Jersey, United States (Tyco International (US) Inc.). Tyco International was composed of two major busin ...
, convicted in 2005 on 22 counts, including grand larceny, conspiracy, falsifying business records and securities fraud;
* Clarence Norman Jr.
Clarence Norman Jr. (born August 25, 1951) is a former Politics of the United States, American politician from the state of New York (state), New York. He was the former chairman of the Kings County Democratic Committee, Kings County Democratic ...
, a former New York assemblyman and powerful chair of the Brooklyn Democratic organization, convicted in 2005 on three felony counts of soliciting illegal campaign contributions during a primary
Primary or primaries may refer to:
Arts, entertainment, and media Music Groups and labels
* Primary (band), from Australia
* Primary (musician), hip hop musician and record producer from South Korea
* Primary Music, Israeli record label
Work ...
, and one misdemeanor count of falsifying business records of the contributions;
* Steven Croman, a New York City slumlord
A slumlord (or slum landlord) is a slang term for a landlord, generally an absentee landlord with more than one property, who attempts to maximize profit by minimizing spending on property maintenance, and usually rents to tenants that they can ...
who in 2017 pleaded guilty to grand larceny, falsifying business records and tax fraud as part of a mortgage and tax scheme;
* Donald Trump
Donald John Trump (born June 14, 1946) is an American politician, media personality, and businessman who is the 47th president of the United States. A member of the Republican Party (United States), Republican Party, he served as the 45 ...
, convicted in 2024 of 34 counts of falsifying business records, in connection with a hush money payment to pornographic film actress Stormy Daniels, becoming the first U.S. president
The president of the United States (POTUS) is the head of state and head of government of the United States. The president directs the Federal government of the United States#Executive branch, executive branch of the Federal government of t ...
to be convicted of a felony.
Other states
Falsifying business records is also a crime in other states, such as Alabama
Alabama ( ) is a U.S. state, state in the Southeastern United States, Southeastern and Deep South, Deep Southern regions of the United States. It borders Tennessee to the north, Georgia (U.S. state), Georgia to the east, Florida and the Gu ...
, Alaska
Alaska ( ) is a non-contiguous U.S. state on the northwest extremity of North America. Part of the Western United States region, it is one of the two non-contiguous U.S. states, alongside Hawaii. Alaska is also considered to be the north ...
, California
California () is a U.S. state, state in the Western United States that lies on the West Coast of the United States, Pacific Coast. It borders Oregon to the north, Nevada and Arizona to the east, and shares Mexico–United States border, an ...
, Delaware
Delaware ( ) is a U.S. state, state in the Mid-Atlantic (United States), Mid-Atlantic and South Atlantic states, South Atlantic regions of the United States. It borders Maryland to its south and west, Pennsylvania to its north, New Jersey ...
, Hawaii
Hawaii ( ; ) is an island U.S. state, state of the United States, in the Pacific Ocean about southwest of the U.S. mainland. One of the two Non-contiguous United States, non-contiguous U.S. states (along with Alaska), it is the only sta ...
, Kentucky
Kentucky (, ), officially the Commonwealth of Kentucky, is a landlocked U.S. state, state in the Southeastern United States, Southeastern region of the United States. It borders Illinois, Indiana, and Ohio to the north, West Virginia to the ...
, and Oregon
Oregon ( , ) is a U.S. state, state in the Pacific Northwest region of the United States. It is a part of the Western U.S., with the Columbia River delineating much of Oregon's northern boundary with Washington (state), Washington, while t ...
.Oregon Rev. Stat. § 165.080
In Maine
Maine ( ) is a U.S. state, state in the New England region of the United States, and the northeasternmost state in the Contiguous United States. It borders New Hampshire to the west, the Gulf of Maine to the southeast, and the Provinces and ...
, a similar crime is called falsifying private records.Maine Criminal Code, 17-A, § 707
Notes
{{Reflist
External links
New York Criminal Jury Instructions
for a charge of falsifying business records in the first degree
New York Criminal Jury Instructions
for a charge of falsifying business records in the second degree
Corporate crime
U.S. state criminal law