        SUPREME COURT OF THE STATE OF NEW YORK
           Appellate Division, Fourth Judicial Department

94
KA 11-02170
PRESENT: SMITH, J.P., PERADOTTO, LINDLEY, VALENTINO, AND WHALEN, JJ.


THE PEOPLE OF THE STATE OF NEW YORK, RESPONDENT,

                    V                              MEMORANDUM AND ORDER

OLGA CASIANO, DEFENDANT-APPELLANT.


THE LEGAL AID BUREAU OF BUFFALO, INC., BUFFALO (KRISTIN M. PREVE OF
COUNSEL), FOR DEFENDANT-APPELLANT.

FRANK A. SEDITA, III, DISTRICT ATTORNEY, BUFFALO (DAVID A. HERATY OF
COUNSEL), FOR RESPONDENT.


     Appeal from a judgment of the Supreme Court, Erie County (M.
William Boller, A.J.), rendered July 12, 2010. The judgment convicted
defendant, upon a jury verdict, of grand larceny in the third degree,
falsifying business records in the first degree (7 counts) and
offering a false instrument for filing in the first degree (7 counts).

     It is hereby ORDERED that the judgment so appealed from is
unanimously reversed as a matter of discretion in the interest of
justice and on the law, the indictment is dismissed and the matter is
remitted to Supreme Court, Erie County, for proceedings pursuant to
CPL 470.45.

     Memorandum: Defendant appeals from a judgment convicting her,
upon a jury verdict, of grand larceny in the third degree (Penal Law §
155.35 [1]) and seven counts each of falsifying business records in
the first degree (§ 175.10) and offering a false instrument for filing
in the first degree (§ 175.35). We agree with defendant that the
judgment must be reversed and the indictment dismissed (see People v
McNab, 167 AD2d 858).

     This matter stems from allegations of public assistance fraud
relating to defendant’s operation of a daycare. In October 2007, the
New York State Office of Children and Family Services (OCFS) issued
defendant a license to run a group family day care home (see 18 NYCRR
part 416). Pursuant to OCFS regulations, a group family day care home
“must be operated by a provider and have at least one assistant
present during the hours that care is provided” (18 NYCRR 413.2 [1]
[j]), and the provider and assistant must be the “primary caregivers”
of the children (18 NYCRR 416.8 [1] [c]). Any “caregivers who are not
providers or assistants must meet the qualifications of an assistant”
(18 NYCRR 413.2 [1] [j] [2] [ii]). Defendant thereafter contracted
with the Erie County Department of Social Services (DSS) to provide
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                                                         KA 11-02170

daycare services to low income families. Parents applied to DSS for
childcare subsidies and received preapproval letters indicating the
days of the week and the number of hours per day they were approved
for daycare. On a monthly basis, defendant submitted vouchers to DSS
listing the children in her care and the hours that she provided
daycare during that month, and DSS paid defendant in accordance with
the vouchers.

     OCFS received a complaint against defendant in 2008, and an OCFS
licensor was assigned to investigate the complaint. From February to
June 2008, the licensor visited the daycare on several occasions and,
during many of those visits, no one answered the door and there were
no signs of activity inside. During another visit, an unlicensed
assistant was supervising the children, in violation of OCFS
regulations. As a result of the investigation, OCFS referred the case
to DSS for suspected public assistance fraud. DSS investigators
conducted periodic surveillance of the daycare between April and July
2008 and many times did not see any children at the daycare.

     Defendant was charged by indictment with one count of grand
larceny in the third degree (Penal Law § 155.35 [1]) and 10 counts
each of falsifying business records in the first degree (§ 175.10) and
offering a false instrument for filing in the first degree (§ 175.35).
Count one of the indictment alleged that, between October 1, 2007 and
July 30, 2008, defendant “stole property having a value in excess of
[$3,000], to wit: a sum of money, belonging to [DSS].” Counts 2
through 11 charged defendant with making false entries in the business
records of DSS between various dates by submitting vouchers identified
only as having either Vendor No. 42835XH (counts 2, 5, 6, 8, 11) or
Vendor No. 923351HR (counts 3, 4, 7, 9, 10). Counts 12 through 21
charged defendant with presenting written instruments that contained
false information to DSS by submitting vouchers again identified only
as having Vendor No. 42835XH (counts 12, 15, 16, 18, 21) or Vendor No.
923351HR (counts 13, 14, 17, 19, 20). Defendant requested a bill of
particulars identifying the facts underlying each of the charges in
the indictment, which the People refused to provide.

     At trial, the crux of the People’s case was the testimony of a
DSS special investigator, who testified over defendant’s repeated
objections. The investigator reviewed the school and bus schedules of
the children who attended the daycare, their parents’ work schedules,
the parents’ applications for daycare subsidies and preapproval
letters, and the work schedules of defendant and her assistant, and
prepared charts listing each day that the daycare was open and
defendant’s billings for those dates. Based upon that information,
the investigator created charts purporting to illustrate the amounts
that defendant allegedly “overbilled” DSS, which were admitted in
evidence over defendant’s objection. According to the investigator,
defendant submitted vouchers for monies to which she was not entitled
because (1) she billed for hours when neither she nor her certified
assistant were at the daycare, and (2) she billed for hours when the
children were not at the daycare

     By its verdict, the jury found defendant guilty of grand larceny
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                                                         KA 11-02170

as charged in count one of the indictment, falsifying business records
as charged in counts 5 through 11 of the indictment, and offering a
false instrument for filing as charged in counts 15 through 21 of the
indictment. The jury acquitted defendant of the remaining counts of
falsifying business records (counts 2 through 4) and offering a false
instrument for filing (counts 12 through 14).

     On appeal, defendant contends that the judgment must be reversed
and the indictment dismissed because, inter alia, the indictment was
rendered duplicitous and/or multiplicitous by the evidence adduced at
trial. We agree. “Prosecutors and grand juries must steer between
the evils known as ‘duplicity’ and ‘multiplicity.’ An indictment is
duplicitous when a single count charges more than one offense . . . It
is multiplicitous when a single offense is charged in more than one
count . . . A duplicitous indictment may fail to give a defendant
adequate notice and opportunity to defend; it may impair his [or her]
ability to assert the protection against double jeopardy in a future
case; and it may undermine the requirement of jury unanimity, for if
jurors are considering separate crimes in a single count, some may
find the defendant guilty of one, and some of the other. If an
indictment is multiplicitous it creates the risk that a defendant will
be punished for, or stigmatized with a conviction of, more crimes than
he [or she] actually committed” (People v Alonzo, 16 NY3d 267, 269).
An indictment that is not duplicitous on its face may be rendered so
based upon the trial evidence (see People v Bennett, 52 AD3d 1185,
1186, lv denied 11 NY3d 734; People v Bracewell, 34 AD3d 1197, 1198).

      Here, the People correctly concede that counts 5 through 7, 9, 15
through 17, and 19 of the indictment are duplicitous and
multiplicitous inasmuch as they are based on “distinct but not
identifiable vouchers.” Those counts are all based on the same time
period and the same vendor number and, according to the People, there
is no way to identify which voucher refers to which count (see
generally People v Burnett, 306 AD2d 947, 947-948). In addition, the
People correctly concede that the conviction of counts 11 and 21
should be reversed and those counts dismissed because there is no
proof in the record to support the conviction of those counts. Those
counts are based on the so-called “10th voucher,” which was not
submitted in evidence and about which there was no testimony.
Although defendant’s contention with respect to counts 11 and 21 is
unpreserved for our review because her motion for a trial order of
dismissal was not specifically directed at that deficiency (see People
v Gray, 86 NY2d 10, 19), we nonetheless reach that contention as a
matter of discretion in the interest of justice (see CPL 470.15 [6]
[a]).

     With respect to the remaining counts of the indictment, we agree
with defendant that counts 8, 10, 18, and 20 of the indictment were
rendered duplicitous by the trial evidence (see Bennett, 52 AD3d at
1186; Bracewell, 34 AD3d at 1198). As noted above, the People alleged
that defendant submitted vouchers for monies to which she was not
entitled because, at various dates and times, she (1) billed for hours
when neither she nor her certified assistant were at the daycare, and
(2) she billed for hours when the children were not at the daycare.
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                                                         KA 11-02170

There is no basis in the record to determine, with respect to each of
those counts, whether the jury convicted defendant based upon the
first act (billing for hours when the children were watched by
uncertified assistants) or the second act (billing for hours when the
children were not at daycare), or whether certain jurors convicted
defendant upon the former and others upon the latter. Thus, “it is
impossible to verify that each member of the jury convicted defendant
for the same criminal act” (People v Dalton, 27 AD3d 779, 781, lv
denied 7 NY3d 754, reconsideration denied 7 NY3d 811).

     Finally, we agree with defendant that her conviction of grand
larceny must also be reversed. Count one of the indictment alleges
that, between October 1, 2007 and July 30, 2008, defendant “stole
property having a value in excess of [$3,000], to wit: a sum of
money, belonging to [DSS].” Under Penal Law § 155.05 (1), “[a] person
steals property and commits larceny when, with intent to deprive
another of property or to appropriate the same to himself [or herself]
or to a third person, he [or she] wrongfully takes, obtains or
withholds such property from an owner thereof.” Larceny includes
“obtaining property by false pretenses” (§ 155.05 [2] [a]). A
defendant commits larceny by false pretenses when he or she “obtain[s]
possession of money of another by means of an intentional false
material statement about a past or presently existing fact upon which
the victim relied in parting with the money” (People v Starks, 238
AD2d 621, 622, lv denied 91 NY2d 836; see People v Churchill, 47 NY2d
151, 157-158).

     Here, the People alleged that defendant committed larceny by
false pretenses by charging for times when unlicensed assistants were
watching the children in violation of OCFS regulations, and by billing
for times when the children were not receiving daycare services. We
question whether submitting vouchers for daycare services rendered by
an uncertified assistant falls within the definition of larceny.
OCFS’s regional manager testified that, although it is a “regulatory
violation” for an uncertified assistant to watch children at a group
day care, the regulations do not state that daycare providers are not
permitted to bill for services rendered by an uncertified assistant.
Indeed, the DSS special investigator referred to those hours as
“billable” on his charts, although unauthorized by the regulations.

     Even assuming, arguendo, that billing for services provided by an
uncertified assistant constitutes a “wrongful[ ] tak[ing]” within the
meaning of Penal Law § 155.05 (1), we note that “[c]onduct which is
wrongful in the civil context is not necessarily ‘wrongful’ within the
meaning of the larceny statutes” (People v Foster, 73 NY2d 596, 603-
604; see Churchill, 47 NY2d at 158). As the Court of Appeals
explained in Foster, “[t]he courts and the Legislature have been
reluctant to elevate civil wrongs to the level of criminal larceny . .
. , particularly when the conduct arises out of legitimate business
activities where there are often close questions as to whether the
defendant acted intentionally or was merely incompetent . . . In such
cases, whenever the Legislature has found that certain acts performed
in these contexts warrant criminal punishment, it has generally
identified the prohibited conduct quite specifically . . . in order to
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                                                         KA 11-02170

protect the truly inept or victims of spite from being branded as
criminals” (73 NY2d at 604 [emphasis added]).

     Here, we agree with defendant that her alleged regulatory
violation cannot form the basis for criminal liability under the
larceny statute. Article 6 of the Social Services Law, which governs
child care facilities and the regulations promulgated thereunder (18
NYCRR part 413 et seq.) set forth civil penalties for statutory or
regulatory violations (see e.g. Social Services Law § 390 [10]; 18
NYCRR 413.3 [1] [a] [1], [4], [5]). Although 18 NYCRR 413.3 (1) (a)
(9) provides that OCFS may request that the Attorney General “take
such action as is necessary to collect civil penalties, seek criminal
prosecution, or to bring about compliance with any outstanding hearing
decision or order” (emphasis added), we conclude that the reference to
criminal prosecution merely reserves OCFS’s right to seek prosecution
for otherwise criminal conduct. It does not criminalize the violation
of regulations relating to the proper supervision of children in group
daycare (see generally People v Caswell-Massey Co., 6 NY2d 497, 501).
Thus, defendant’s violation of 18 NYCRR part 416 cannot supply the
basis for a larceny prosecution (cf. People v Kyu H. Shin, 181 Misc 2d
751, 754-755; see generally Foster, 73 NY2d at 604).

     There is no question that the People’s other theory of the case,
that defendant billed for services not actually rendered, would fall
within the definition of larceny by false pretenses (see e.g. People v
McDonald, 215 AD2d 504, 504, affd 88 NY2d 281; see generally
Churchill, 47 NY2d at 157-158; Starks, 238 AD2d at 622). The People,
however, argued and produced evidence supporting both theories of
larceny at trial, and there is no way to determine whether the jury
convicted defendant on the ground that she billed DSS for services she
did not in fact provide or on the ground that she billed DSS for
services provided by unlicensed caregivers. Because we cannot be
certain whether the jury convicted defendant on the basis of non-
criminal acts, i.e., submitting vouchers to DSS for daycare provided
by uncertified assistants, or whether the jurors lacked unanimity with
respect to the acts for which she was convicted, we conclude that her
conviction of grand larceny must be reversed and count one of the
indictment dismissed (see generally Alonzo, 16 NY3d at 269).




Entered:   May 9, 2014                          Frances E. Cafarell
                                                Clerk of the Court
