BILL NUMBER: S4741
SPONSOR: SEPULVEDA
 
TITLE OF BILL:
An act to amend the penal law, the general business law and the labor
law, in relation to schemes to defraud and establishing the crime of
harassment of a legal services client; and to repeal certain provisions
of the penal law relating thereto
 
PURPOSE:
To strengthen the legal protections against fraudulent schemes, partic-
ularly those targeting multiple victims or vulnerable individuals, and
to establish criminal penalties for lawyers who harass or exploit their
clients.
 
SUMMARY OF PROVISIONS:
Section 1: Establishes legislative intent to combat fraudulent schemes
and unethical practices, particularly within legal services, to protect
the public and uphold fairness.
Section 2: Repeals and replaces existing Penal Law §§ 190.60 and 190.65,
expanding the scope of fraud-related offenses by creating five degrees
of the crime of "scheme to defraud," ranging from a class A misdemeanor
(fifth degree) to a class B felony (first degree) based on the number of
victims and financial harm caused.
Section 3-6: Amends various sections of the Penal Law, General Business
Law, and Labor law to reflect the revised fraud statutes and include
these offenses in lists of specified crimes.
Section 7: Amends larceny statutes to allow aggregation of fraudulently
obtained funds from multiple victims across different counties into a
single charge.
Section 8: Adds Article 243 to the Penal Law, creating the new crime of
Harassment of a Legal Services Client, with two degrees:
Second Degree (Class A misdemeanor): When a lawyer withholds client
documents or fails to return unspent retainer funds upon request.
First Degree (Class E felony): When a lawyer threatens to disclose
confidential client information, including immigration status, to coerce
payment or retention of services.
Section 9: Includes a severability clause to preserve the remainder of
the act if any part is deemed invalid.
Section 10: Establishes the effective date as January 1 following enact-
ment.
 
JUSTIFICATION:
Fraudulent schemes and unethical legal practices erode public trust, and
harm vulnerable individuals, and exploit consumers seeking essential
services. This legislation addresses these concerns by:
* Strengthening penalties for large-scale fraud operations targeting
multiple victims.
* Expanding protections for elderly and vulnerable individuals dispro-
portionately affected by fraud.
* Ensuring legal professionals cannot exploit their clients through
coercion, threats, or withholding essential documents.
* Allowing prosecution of fraudulent schemes that span multiple juris-
dictions by consolidating charges.
By updating fraud statutes and establishing new protections for legal
services clients, this bill upholds justice, deters misconduct, and
safeguards the rights of consumers.
 
LEGISLATIVE HISTORY:
This is a new bill.
 
FISCAL IMPLICATIONS:
Minimal administrative costs anticipated for enforcement and prose-
cution.
 
EFFECTIVE DATE:
This act shall take effect on January 1 following enactment.

Statutes affected:
S4741: 496.06 penal law, 496.06(2) penal law, 220-b labor law, 220-b(3) labor law, 460.10 penal law, 460.10(1) penal law, 155.05 penal law, 155.05(2) penal law