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Larceny by Extortion or Blackmail in the Small Business Setting

Let’s suppose that you are in a small business partnership with another person and you learn that your partner has been stealing from you. Would it be possible to threaten to take the matter to the police should he refuse to sell his share in the business to you at a discounted rate? The answer is probably not in New York.

Larceny is defined in Penal Law section 155.05(2)(e) to include “by extortion.” The definition reads as follows:

A person obtains property by extortion when he compels or induces another person to deliver such property to himself or to a third person by means of instilling in him a fear that, if the property is not so delivered, the actor or another will: (i) cause physical injury to some person in the future; or (ii) cause damage to property; or (iii) engage in other conduct constituting a crime; or (iv) accuse some person of a crime or cause criminal charges to be instituted against him . . .
There are several other methods on the list but you can see the point. Although it may seem somewhat counterintuitive, there is a possibility that if you make such a threat, you would be essentially blackmailing the person who stole from you — a truly unintended result. The proper way to handle the situation is to contact the police if you think that a crime has been committed, or try to work it out amicably with your business associate. However, in order to do that with a clear conscience, one would need to understand both how the complaint-making process works at most New York police stations and departments, but also how the legal structure of your business affects your rights and methods by which you may be able to recoup any stolen business proceeds.
If you find yourself on either side of this particularly common problem, you should consult with New York City criminal defense attorneys with experience in small business type disputes.
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