Will Lying to State Prosecutors Become a Felony?

Posted On: March 4th, 2019

Business man taking oath with fingers crossed behind his back

Albany White Collar Crime Lawyer on NYS Lying to State Prosecutors Bill

In December 2001, lifestyle maven Martha Stewart received a call from her stockbroker, Peter Bacanovic, warning her that an adverse FDA ruling on a new drug developed by ImClone Systems would cause the pharmaceutical company’s stock price to plummet. Stewart immediately dumped all her shares of the stock, saving her from a $45,673 loss. By acting on nonpublic securities information, Stewart—along with Bacanovic and ImClone CEO Samuel D. Waksal, who also sold off his shares—came under intense scrutiny by federal investigators for possibly having committed the felony crime of insider trading.

But, contrary to what many people remember, Stewart was not convicted of insider trading. Rather, she was convicted of conspiracy, obstruction of an agency proceeding, and making false statements to federal investigators. Like President Bill Clinton before her and Paul Manafort, Michael Cohen, and Roger Stone today, Stewart only compounded her legal woes by lying, and, at least in her case, gave federal prosecutors an additional tool beyond the initial charge to produce enough evidence for a conviction.


Federal vs. NYS Punishments for Lying to Prosecutors


Lying to federal prosecutors is a felony crime. Lying to New York state prosecutors, however, is not—although state Senator Todd Kaminsky (D-Nassau) would like to change that. Kaminsky has introduced a bill that would make lying to a state prosecutor or investigator in cases of white-collar crime or public corruption a Class E felony, punishable by up to four years in prison.

Kaminsky says he limited the bill to white-collar and public-corruption cases because other criminal offenses, such as homicide, rape, robbery, and arson, typically leave a trail of physical evidence for investigators to follow. White-collar crime investigations, on the other hand, may rely more on witness testimony, maintains Kaminsky, who wants state prosecutors to have the same leverage as their federal counterparts in white-collar cases so defendants will not be able to lie with impunity. “There’s very little justification for someone to say they should be able to give a false answer,” he says.


Disagreements Over Future of Anti-Lying Bill


Albany County District Attorney David Soares agrees with Kaminsky, saying that the bill would offer a “welcome” addition to state prosecutors’ tools in cases where, currently, white-collar criminals live in an “entirely different reality than the realities of other people.”

Critics contend that the law could be abused by zealous prosecutors who would pounce on a single contested statement in the testimony of a white-collar suspect. Kaminsky counters that the law has been written narrowly to discourage such prosecutorial overreach.

So far, the bill does not have a sponsor in the state Assembly, but six Democrats besides Kaminsky have signed on as sponsors.


Dreyer Boyajian LaMarche Safranko is headquartered in Albany, New York, and represents clients in white collar crime cases in state and federal courts throughout New York State. If you or someone you know is in need of a trusted & accomplished criminal defense lawyer, call us at (518) 463-7784 or contact us for a no-obligation consultation.

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Dreyer Boyajian LaMarche Safranko Law

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