People v. Western Express International, Inc., 19 N.Y.3d 652 (2012)

To prove enterprise corruption under New York’s Organized Crime Control Act (OCCA), the prosecution must demonstrate not only a pattern of criminal activity but also the existence of a distinct criminal enterprise with an ascertainable structure separate from that pattern.

Summary

The New York Court of Appeals reversed the Appellate Division and reinstated the Supreme Court’s dismissal of enterprise corruption charges against appellants. The prosecution failed to prove that the appellants’ actions, which facilitated online transactions in stolen credit card data, were connected to a distinct criminal enterprise with an “ascertainable structure” beyond the general pattern of illegal online commerce. The Court emphasized that the OCCA requires proof of a structured criminal entity, not simply a pattern of criminal activity within an illicit market.

Facts

Douglas Latta, Lyndon Roach, and Angela Perez repeatedly bought stolen credit card data and used it fraudulently. Vadim Vassilenko, through Western Express International, Inc., facilitated transactions transferring the stolen data. Western Express offered services like check cashing, money orders, and digital currency exchange. The company’s services were used by carders (those trafficking in stolen credit card information). Western Express profited from commissions on digital currency exchanges that facilitated the purchase of stolen credit card information. Vassilenko knew a significant portion of Western Express’s business came from carding and sought more carder patronage, even attempting to advertise on a carding website.

Procedural History

The Supreme Court dismissed the enterprise corruption count, finding insufficient evidence of a “criminal enterprise” with an “ascertainable structure.” The Appellate Division reversed, reasoning that Vassilenko created a structured enterprise through Western Express. Two Appellate Division Justices dissented. One of the dissenting Justices granted appellants leave to appeal to the Court of Appeals.

Issue(s)

Whether the prosecution presented sufficient evidence to prove the existence of a criminal enterprise with an “ascertainable structure distinct from a pattern of criminal activity,” as required for a charge of enterprise corruption under New York Penal Law § 460.10(3).

Holding

No, because the prosecution’s evidence demonstrated only a pattern of criminal activity within the carding market, but failed to establish a distinct criminal enterprise with an ascertainable structure, common purpose, and association beyond individual transactions.

Court’s Reasoning

The Court focused on the statutory requirement in New York’s OCCA that a criminal enterprise have “an ascertainable structure distinct from a pattern of criminal activity” (Penal Law § 460.10 [3]). While the prosecution showed a pattern of illegal activity, it failed to prove that activity related to a distinct criminal enterprise with a structure. The Court distinguished this case from federal RICO cases, noting that the OCCA is more narrowly applied and requires a structure distinct from the underlying criminal pattern. The Court reasoned that Western Express’s services facilitated the carding market but did not create a structured criminal enterprise because the market participants acted according to their own interests, not as part of a structured, purposeful organization. The Court stated that while the internet can be used to facilitate crime, “crimes committed by resort to cyber means are not invariably referable to distinct nefarious enterprises.” The websites involved were accessible and used for business, and their legality depended on users’ independent agendas. “[T]he sites themselves presented simply as publicly accessible loci for the conduct of business, the legality of which turned in the end upon the independent agendas of individual users.” The Court required more than an inference of a beneficial relationship: there must be an enduring structurally distinct symbiotically related criminal entity with which appellants were purposefully associated. The court emphasized that the common purpose of the purported enterprise must be established, going beyond mere individual transactions. This differentiates a structured criminal organization from a loosely connected pattern of illegal acts.