DECISION AND ORDER This is a motion for relief under Criminal Procedure Law §210.40, a so-called Clayton motion. See People v. Clayton, 41 AD2d 204 (2d Dept 1973). The defendant Bennie Hadnott is seventy-seven years old and charged with his first felony offense, for grand larceny in the second degree. PL §155.40(1). The People allege that Hadnott and co-defendant Reginald Williams knowingly participated in a kickback scheme by stealing money from the Addicts Rehabilitation Center (“ARC”), a taxpayer-funded nonprofit organization that provides social services to individuals suffering from substance abuse and HIV/AIDS. Williams was formerly the Chairman of the Board of Directors of ARC. Beginning in 2010, ARC contracted with Tondah Consulting Group (“Tondah”) — a company that Hadnott solely owned — to provide “financial consulting services” for $40,000 a year. From May 2010 to January 2015, Tondah, under the direction of Hadnott, transferred a total of $54,000 to Reginald Williams via payments to Alternative Strategies, which the People allege was a shell company controlled by Williams. A court is authorized to dismiss an indictment “in furtherance of justice…as a matter of judicial discretion” where there exists “some compelling factor, consideration or circumstance clearly demonstrating that conviction or prosecution of the defendant…would constitute or result in injustice.” CPL §210.40(1). The trial court’s discretion to dismiss an indictment in the interest of justice, should be exercised sparingly and only in “the unusual case that cries out for fundamental justice beyond the confines of conventional considerations of ‘legal or factual merits of the charge or even on the guilt or innocence of the defendant.’” People v. Belge, 41 NY2d 60, 62-63 (1976) (Fuchsberg, J., concurring) (citing People v. Clayton, 41 AD2d 204, 206 (2d Dept 1973)). In determining whether dismissal is appropriate, a court must, “to the extent applicable, examine and consider, individually and collectively”: (a) the seriousness and circumstances of the offense; (b) the extent of harm caused by the offense; (c) the evidence of guilt, whether admissible or inadmissible at trial; (d) the history, character and condition of the defendant; (e) any exceptionally serious misconduct of law enforcement personnel in the investigation, arrest and prosecution of the defendant; (f) the purpose and effect of imposing upon the defendant a sentence authorized for the offense; (g) the impact of a dismissal upon the confidence of the public in the criminal justice system; (h) the impact of a dismissal on the safety and welfare of the community; (i) the attitude of the complainant or victim with respect to the motion; and (j) and any other relevant fact indicating that a judgment of conviction would serve no useful purpose. CPL §210.40(1)(a-j). Hadnott makes three main arguments in support of the motion to dismiss: (1) that he has lived an exemplary life as a trailblazer for minority professionals and dedicated his life to important charitable work; (2) that his serious health issues mean that he poses no threat to the community; (3) that the People’s theory of the case against him is legally unsound — and in any event, he had a de minimis role in the charged conduct. The defense argues that Hadnott’s history, character, and condition favor dismissal. Hadnott submitted countless letters of support to the court highlighting his mentoring of Black accountants and other Black professionals, as well as his voluminous charitable work and public service. Hadnott has been actively involved with several organizations, including the One Hundred Black Men, the NAACP, the National Association of Black Accountants, Ronald McDonald Houses Charities, and the Teaneck United Methodist Church. In light of this long record of charitable and community service, Hadnott argues that dismissing the charges will have a positive impact on the welfare of his community (CPL §210.40(1)(h)) as dismissal would allow him to continue his charitable work without the cloud of criminal prosecution. Hadnott argues that his age of seventy-seven and treatment for several serious health issues provide further reason to grant the motion for dismissal in the interest of justice. Hadnott also claims that the seriousness and circumstances of the alleged offense favor dismissal as he had a de minimis role in the charged conduct and because the People’s case theory of the case against him is legally unsound. Hadnott argues that the allegations against him are not cognizable as grand larceny in the second degree because ARC paid fair market value in its $40,000 annual payments to Tondah and that these payments were for legitimate accounting work. Hadnott further argues that the payments from Tondah to Alternative Strategies were not kickbacks but rather compensation for legitimate business services to acquire new clients. Finally, Hadnott claims that the allegations against him did not involve any discernable victim nor deprive any organization of the services for which they bargained. While acknowledging Hadnott’s history of public service, the People argue that a laudatory background should not excuse his current conduct. The People argue that given Hadnott’s significant experience as an accountant, he would have had to have known that he was participating in an illegal kickback scheme. The People also argue that Hadnott’s characterization of his actions contains numerous misstatements and distortions. The People claim that the evidence clearly shows that Hadnott transferred over $50,000 to Williams via Alternative Strategies, and whether Tondah provided legitimate accounting work for ARC is not relevant as Hadnott helped Williams illegally increase his compensation from ARC by over $50,000 between 2010 and 2015 — something that would not have been possible without Hadnott’s participation. Furthermore, the People dispute Hadnott’s claim that Alternative Strategies was doing any legitimate work for Tondah. According to the People, Alternative Strategies could not have been working for Tondah as it was not a business but merely a name on a bank account. Alternative Strategies had no employees, was not registered to do business in New York, and had no IRS Employer Identification Number. Finally, Alternative Strategies’ only bank account was a savings account into which Williams deposited checks and withdrew cash or cashier’s checks to pay personal expenses. As the CEO and sole owner of Tondah, Hadnott would have been in a position to know that Alternative Strategies was not doing any legitimate work. For all these reasons, the People claim that there is ample evidence to support the conclusion that Hadnott acted with the mental culpability required for grand larceny in the second degree. After considering the factors enumerated in CPL §210.40(1), the court concludes that the instant motion should be denied. The history, character, and condition of the defendant favor dismissal as Hadnott’s professional accomplishments, community leadership, and significant charitable work are noteworthy. However, these are not facts that merit dismissal when weighed on balance with the seriousness of the alleged crime. As an initial matter, there is no question that the charged felony crime is serious. CPL §210.40(1). In repeated deliberate acts spanning nearly five years, Hadnott is alleged to have stolen more than $50,000 from a taxpayer-funded, nonprofit entity. Hadnott attempts to minimize the seriousness of this alleged conduct by claiming that it did not involve any discernable victim. However, stealing from a nonprofit designed to provide housing and social services to individuals living with substance abuse issues and HIV/AIDS is far from victimless. Nor was the seriousness of the offense mitigated by the circumstances in which they were allegedly committed. The evidence strongly suggests that Alternative Strategies was not a legitimate business and that it was merely a shell company created to draw in funds from which Williams paid personal expenses. Hadnott points to no misconduct of law enforcement personnel in his investigation, arrest, and prosecution, let alone any that was “exceptionally serious.” CPL §210.40(1)(e). While the court makes no determination about Hadnott’s ultimate criminal liability, the evidence clearly shows that the People have presented sufficient evidence for a cognizable, prima facie case for grand larceny in the second degree. Furthermore, if Hadnott is convicted, imposing a sentence authorized for the offense would serve as a deterrent to others and as a reminder that this type of financial crime is not victimless and that no one is entitled to steal funds from a community-based nonprofit for private gain. CPL §210.40(1)(f). A dismissal would have an adverse effect upon the public’s confidence in the criminal justice system’s ability to prosecute instances of public corruption. In sum, after considering all the factors relevant to Hadnott’s motion, both individually and collectively, the court concludes that dismissal is not warranted. This is not “the unusual case that cries out for fundamental justice beyond the confines of conventional considerations of ‘legal or factual merits of the charge or even on the guilt or innocence of the defendant.’” People v. Belge, 41 NY2d 60, 62-63 (1976) (Fuchsberg, J., concurring) (citing People v. Clayton, 41 AD2d 204, 206 (2d Dept 1973)). Accordingly, Hadnott’s motion is denied. This shall constitute the decision and order of the court. Dated: January 18, 2022
