It’s the stuff of gangster movies – ten Russian gangsters have recently been accused of defrauding diamond merchants in New York, Mumbai and Las Vegas out of over $9 million worth of diamonds. The gangsters are alleged to have written bad checks and engaged in other fraudulent behavior to receive diamonds from wholesalers with a promise to pay on delivery. Of course, payment never came, and the gangsters walked away simply to resell the stones, primarily in the Diamond District of Manhattan. The stones they stole are untraceable and do not have any sort of identifier. This particular group had been under surveillance since 2015, and the U.S. Attorney’s office has made a statement about their upcoming prosecution, indicating they must have a fairly strong case. Yet this case is still heavily defensible, depending on the strength of the evidence.
First, there is the issue of the fact that the diamonds in this particular case are particularly difficult to trace. That appears to be the biggest weakness – how can the prosecution show the ‘chain of custody’ of diamonds in such a huge and mutable market as the diamond trade? This is further complicated by the fact that there are ten suspects, who likely all used fake identities and names as they forged documents and wrote bad checks. It would be a monumental task for the prosecution to assign each individual criminal act to an individual criminal without the defense poking some massive holes in the credibility of the evidence. To that end, the number of defendants also makes it an interesting case to defend. The potential to play off the criminals against the other to save themselves is a tempting strategy, particularly in exchange for immunity or a reduced sentence or fine. This is a common method of defense when it comes to organized crime, racketeering and gang activity.
The RICO act is what primarily allows government and states to prosecute organized crimes, such as this diamond bust. The RICO act will apply to criminal groups, known as ‘association-in-fact’ enterprises. Unfortunately for the defendants, the penalties that come along with this can be steep – up to twenty years in prison, a fine of up to $250,000 or double the amount of the proceeds earned from the activity (or, in this case, $18 million). Further, the law allows the government to freeze the assets of a defendant even before the case goes to trial, so the criminal activities of the organization can be severely hamstringed.
Of course, the same difficulties facing the prosecution could affect the defense. Many highly organized criminal groups can be complex, structured like a massive corporation, with the right hand not always knowing what the left hand is doing. A good criminal defense attorney will try to communicate with the other defendants’ attorneys to gather as much information as possible, without disclosing any confidential information of their own client. This can be a tricky balancing act, but a good defense attorney will have experience in dealing with large criminal enterprises and know how to strongly advocate for their client. The defendants should seek out an attorney who is also experienced in federal defense, particularly under the RICO act, given the complexity and potentially high-stakes of this new case.
If you or someone you know is being charged with this or a similar crime, contact The Blanch Law Firm at 212-736-3900.