Question in New York Trial: How Long Is Arm of the Law?
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For three months, a 13th-floor courtroom on Centre Street in Manhattan has been the scene of an emotional trial of three members of one family that has received far more attention in Venezuela than it has in New York. The family is that of Orlando Castro Llanes, 71, an influential financier in Venezuela until a banking crisis there in 1994 led to a run on that country’s financial institutions, the collapse of his empire and losses of more than $15 million to depositors in banks he controlled. The Manhattan District Attorney, Robert M. Morgenthau, has charged Mr. Castro, his 47-year-old son, Orlando Castro Castro, and his 29-year-old grandson, Jorge Castro Barredo, with scheming to defraud Venezuelans of millions of dollars. The case is expected to go to the Manhattan jury tomorrow. In Venezuela, a soap-opera aspect of the case has included hints of deep Venezuelan feuds and dark suggestions from the Castros that Mr. Morgenthau is carrying out a vendetta for unspecified powerful Venezuelans. But among lawyers in New York, the case is drawing attention for a less sensational reason: the Castros never did business in New York. Some lawyers are criticizing Mr. Morgenthau for what they say is a bid for global influence that is excessive for a local prosecutor. But Mr. Morgenthau and his supporters say the case is nothing more than an adaptation of existing law that represents how prosecutors will have to respond to modern white-collar crime. In an age when computers can move money around the globe in a flash, they say, prosecutors who are inhibited by national borders — let alone local ones — risk being outrun by criminals. Over the objections of the defense, the Manhattan prosecutors convinced Justice Edward J. McLaughlin of State Supreme Court in Manhattan that they had the power to bring the case here because many of the transactions involved checks drawn on banks in New York or electronic transfers of funds that passed through banks in New York. In his office this week, Mr. Morgenthau argued that because of New York’s role as a global banking center, he had a special duty to protect the integrity of the banking system. ”If the banking system goes down, the place that’s going to be most affected is Manhattan,” he said. ”If you let people use New York for one kind of crime — banking crime — they’re going to use it for others.” Ronald K. Noble, who was Undersecretary of the Treasury for Enforcement until last year, sees the Castro case as little more than an application of existing law, which has long proclaimed that a prosecutor can file a case if a wire transfer of funds occurs in his territory. ”What Morgenthau is saying is, ‘If you want to commit fraud, stay out of the U.S. and, particularly, stay out of New York,’ ” Mr. Noble said. More : query.nytimes.com |