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How Can I Protect Myself Against Bitcoin Fraud?

You can protect yourself against Bitcoin fraud by understanding what cryptocurrencies are, educating yourself on the most common forms of fraud, and strictly observing certain safeguards that will prevent you from becoming an “easy mark.” Many of the same general principles that will protect you from any kind of fraud will also protect you against Bitcoin fraud.

Standard currencies, such as the US dollar and the Euro, exist in paper, coin, and digital form. Their value is guaranteed by a central bank, such as the US Federal Reserve bank. Since the gold standard was abandoned in 1971, the US dollar has been backed solely by the credibility of the US government. Such is not the case with the new cryptocurrencies such as Bitcoin.

Cryptocurrencies are a private alternative to government-issued currency, and they can be exchanged for goods and services worldwide. They are backed by no central bank and have no central administrator, relying instead on peer-to-peer networks. Bitcoin is the first cryptocurrency, and so far it is by far the most popular. Bitcoin’s value has appreciated from virtually zero to as high as $20,000 per “coin” in 2018. Its use, however, is fraught with peril.

How Bitcoin Works

Bitcoin, which came into use in 2009, utilizes transactions that are verified by a network using cryptography, and these transactions are recorded in a publicly available ledger known as a blockchain. Its source code has been made public as open-source software. As of 2017, there were 3 to 6 million people using some form of cryptocurrency, with Bitcoin accounting for more than half of all transactions.

Bitcoin’s reputation has been damaged by allegations of frequent fraud, theft, and price volatility. A significant number of economists advise against its use, considering that it is particularly prone to speculative bubbles and pyramid schemes.

The Inherent Vulnerabilities of Bitcoin Transactions

The following is only a partial list of the risk of using Bitcoin instead of government-backed currency:

  • Bitcoin payments cannot be automatically reversed. Once you have invested your money, there is no way of getting it back without either the cooperation of the vendor or the filing of a lawsuit.
  • Computerized Bitcoin exchange platforms can be hacked, and they often are. Some of these platforms have collapsed for this reason, and many Bitcoin users have lost a lot of money.
  • Fraud and theft are rampant in individual Bitcoin transactions. One popular form of fraud is for someone to pose as a Bitcoin trader to induce you to send him money for an “investment” which, of course, you will never see again.
  • The Federal Deposit Insurance Corporation and other institutional safeguards that protect the US dollar to not apply to Bitcoin. The situation resembles the meager protections available to the US dollar in the runup to the Great Depression.
  • The fluctuation in the valuation of Bitcoin is extreme, rendering investments extremely speculative. Some have likened the entire cryptocurrency market to an online casino.

Common Forms of Bitcoin Fraud

The scale of Bitcoin fraud is almost incomprehensible. In 2019, for example, cybercriminals defrauded cryptocurrency users and exchanges out of at least $4.26 billion (not limited to Bitcoin). Japanese cryptocurrency exchange BITPoint, for example, lost $4.26 million in July 2019 alone. The danger to individuals is just as acute, if not more so.

The number of possible types of Bitcoin fraud is limited only by human ingenuity. Some of the most common are listed below:

  • Blackmail: A fraudster claims to be in possession of damaging information about you (an affair, business corruption, etc.), and demands payment in Bitcoin as “hush money.” You can expect threats, pressure, and various forms of intimidation. If you pay, the perpetrator is likely to increase the price until you run out of money. Contact the FBI, the local police, and the Federal Trade Commission.
  • Pyramid “chain letter” schemes: In this scam, you are offered the opportunity to make a lot of money by investing in the scheme, using Bitcoin to buy the right to recruit other people into the chain, making you even more money from the money those people invest. Essentially, this is an illegal pyramid scheme. The pyramid eventually collapses, leaving those at the top rich and everyone else broke.
  • Bogus “investment opportunities”: The opportunities for this type of scam are endless. One warning sign is the guarantee – no honest operator will guarantee that you will make money.
  • Malware & viruses: It is not difficult to use Bitcoin as a lure to insert malware and viruses into your computer and other devices. Beware of offers of easy access to Bitcoin resources, especially on social media, that require you to click a link. Malware can give scammers sensitive information about you (passwords, etc.) and access to your existing Bitcoin accounts
  • “Bit-phishing”: Online criminals might pose as a well-known company, and then use that company’s credibility to entice you to enable them access to your Bitcoin keys. At this point, your Bitcoin wallet is open to them. One prominent example is a $27 million “typosquatting” scam run out of the United Kingdom and the Netherlands that involved a fake website used to gain access to Bitcoin wallets.

Major Litigation

Litigation involving Bitcoin and other cryptocurrencies is widespread in both state and federal courts. The following is only a small sample:

  • The New York Attorney General is investigating the Bitfinex exchange over allegations of fraud and misleading investors. Prosecutors allege that the exchange and associated firm, Tether, concealed an $850 million loss, to the detriment of investors.
  • Trader Jeffrey Berk filed a lawsuit in California against cryptocurrency exchange, Coinbase, alleging that Coinbase provided misleading information and committed insider trading, causing massive losses to investors.
  • Commodity Futures Trading Commission v. Morgan Hunt and Kim Hecroft: The Commodity Futures Trading Commission claimed that the two defendants executed a fraudulent scheme to solicit Bitcoin from the general public. The defendants were found guilty and ordered to pay $400,000 in restitution.

How to Protect Yourself against Bitcoin Fraud

The following are some basic rules that can help prevent you from being scammed. Many of these principles will protect you against many different types of scams, not only Bitcoin scams:

  • Sign up for free scam alerts from the FTC. Scammers are innovative, and they are always coming up with something new.
  • Diligently research any Initial Coin Offering (ICO) opportunity you are considering. There is no substitute for this, and there are no shortcuts. Read and analyze the white papers with a critical eye, and obtain assistance if necessary. Find out as much as you can about the individuals behind the ICO.
  • Check any bitcoin exchange’s URL. If a website’s address starts with http rather than https, your suspicions should immediately be raised. Only https URLS offer encryption, which can protect against cyber attacks.
  • Only accept hardware wallets from trusted sources, because certain disreputable operators will sell hardware wallets with embedded “back doors” that will allow the contents to be stolen.
  • Be alert for identity theft. Bitcoin fraudsters will often attempt to impersonate a government official, a charity, or even a trusted relative. Don’t give out personal information or money to anyone simply on the basis of a text, an email, or some other indirect form of communication.
  • Use the internet as an investigation resource. If you are offered a phone number, check it on the internet – it may have been reported as a scam. You can also search “XYZ company scam” or “ABC company complaint” to obtain information, for example.
  • Don’t trust your caller ID, because it can be fooled by easily obtained technology. Call back only to a number you know is legitimate, that you have obtained from a reliable source(such as a phone directory) – not your caller ID.
  • Don’t pay money simply for a promise that may or may not be kept.
  • Don’t make a decision in a hurry. That is exactly what fraudsters want you to do, and that is why so many of them rely on high-pressure sales tactics.
  • Hang up on robocalls. They are illegal and they are a favorite technique of con artists.

The Challenges of Bitcoin Litigation

It can be challenging indeed to prove your case in a Bitcoin scam. In fact, in some cases, it can be difficult to even identify the perpetrator. A significant degree of technical expertise may be required to identify the defendant and build a case against him. This is not always true, of course – some Bitcoin fraud cases are more complex than others. Under no circumstances, however, is a novice qualified to litigate a Bitcoin fraud claim.

We’re Here to Help

If you have been defrauded in a Bitcoin transaction, or if someone is making a fraud allegation against you, now is not the time to consider representing yourself or retaining a law firm that is inexperienced in Bitcoin litigation. Bitcoin fraud cases are notoriously complex, and you are going to need the services of professionals with experience in Bitcoin litigation.

Contact E. Stewart Jones Hacker Murphy, through our online contact page or by telephone, to schedule a free initial consultation. Your consultation can be done over the phone – there is no need to come to our office during the coronavirus quarantine period.

For future reference, our offices are located in Albany, Colonie, Schenectady, Saratoga, and Troy

Inmate Release for Coronavirus


Without masks, many seek inmate release for coronavirus concerns

Without protective equipment or social distancing, inmates are being left in peril.

Lawyers are beginning to seek inmate release for coronavirus concerns for their clients — and courts and prosecutors are beginning to get behind it.

With the spread of the coronavirus, or COVID-19, across our nation, there has been an inevitable and unfortunate spread of the virus into the nation’s jails and prisons.  Federal inmates, state inmates and people in local jails are all affected, leading many lawyers to seek inmate release for coronavirus concerns.  The conditions within these institutions were cramped before COVID-19, and social distancing is impossible for most inmates.  Given the prohibition on alcohol and alcohol-containing products, hand sanitizer is banned in most jails and prisons.  Masks are also banned.

The crowded conditions, and an inability to institute protective measures, make an ideal breeding ground for highly contagious diseases like COVID-19.  The documented spread of the coronavirus through confined institutions and spaces like nursing homes and cruise ships shows that, when people are confined together in relatively close quarters, once the virus beings to spread it becomes nearly impossible to stop, with often horrific outcomes.

According to the CDC, COVID-19 is especially dangerous to older people and people who suffer from a number of pre-existing medical conditions.  Many of these pre-existing conditions which make people vulnerable to bad outcomes from COVID-19 are quite common, and include high-blood pressure, asthma, COPD, heart disease, emphysema, obesity, chronic kidney disease, diabetes, liver disease, or any condition that make a person immunocompromised.  This can include being HIV positive, but also includes many people who have cancer or are being treated for cancer by radiation or chemotherapy.

Many inmates, inmate advocacy groups, and even some people in authority are now openly advocating for the early release of some inmates in order to reduce the risk of spread of coronavirus or COVID-19 in jails and prisons.

The U.S. Attorney General, William Barr, has directed the Bureau of Prisons to reduce inmate populations by increasing where possible home confinement.  BOP is notoriously slow to respond to such directives, and it is unclear whether the directive that Barr gave through a memorandum will cause any immediate or any meaningful reduction in inmate populations.  Attorney General Barr has recently issued new directives concerning pretrial detainees, saying that prosecutors should consider the risk of COVID-19 when making bail recommendations in federal cases.

31 top state prosecutors from across the country have called for reducing inmate populations.  They, like others, cite the possible rapid spread of coronavirus through jails and correctional facilities.  The fact that over 10 million people are brought into and through our nations correctional facilities each year gives the possibility for the exchange of disease into and out of correctional facilities.  If jails are to serve the purpose of protecting the public and inmates, the jail cannot be a dangerous place, and COVID-19 is making jails and prisons dangerous places for all vulnerable inmates.

By reducing inmate populations, two things are accomplished.  First, inmates are removed from the “petri dish” of infection that their jail or prison has or might become.  Second, inmate density is lowered, thereby (hopefully) slowing any potential spread through the institution and increasing the ability of jail and prison administrators to introduce social distancing policies.

It is however impossible to eliminate risk.  There are documented cases of deputies, correction officers and civilian employees introducing disease into jails and prisons.  For example, in Albany, New York, a nurse who provided medical care to inmates  was found to be positive, resulting in the required isolation of 35 inmates.

The great increase in the danger resulting from confinement has prompted many inmates to seek early release, including temporary release pending trial or sentencing, as well as permanent release as a result of a modification of their sentence.  Recently, several high-profile federal inmates have been released.  A parent serving a sentence in federal prison in California for his role in the Varsity Blues/college admissions scandal was released early from his sentence by a federal judge who cited the outbreak of coronavirus in prison.  Tekashi69 was recently released early due to coronavirus concerns arising from the fact that he suffers from asthma.

But early release is not just for high-profile inmates or celebrity criminals.  At the E. Stewart Jones Hacker Murphy Law Firm, we are actively litigating numerous applications for early release and sentencing modifications for multiple clients.  If you or a loved one is currently incarcerated and is a vulnerable person, you may be a good candidate for early release or release pending trial or sentencing.  New clients are being accepted daily and we are happy to hear about your situation to determine if we may be able to help.  Please call now for a free consultation. All calls are confidential: 518-274-5820.

Availability of Insurance Coverage for Immediate Coronavirus Losses

Mitigation of Losses in the Time of Covid-19:
An Overview for New York Businesses and Consumers

On March 22, 2020, Governor Cuomo’s “New York State on PAUSE” Executive Order (E.O. #202.8) became effective.[1]  The measure requires all “non-essential” businesses to “reduce the in-person workforce at any work locations by 100%.”  This applies to most New York businesses—only certain enterprises enjoy “essential” status, such as qualifying healthcare providers, infrastructural institutions (airports, utilities, etc.), some critical manufacturing and professional sectors (pharmaceuticals, sanitary products, food products, etc.), and “essential retail,” which includes purveyors of basic necessities such as groceries, medicine, fuel, hardware and the like.[2]  Restaurants are allowed only to offer take-out or delivery service.  All other businesses are, as the name of the Order suggests, paused.  Employees are required to stay home indefinitely, working remotely when they can.  Disobedience of the Order is punishable by civil penalties of up to $2,000 per violation (and more for serial violators).[3]  It is perhaps the most dramatic episode of acute state intervention in commercial affairs in New York’s history.

As businesses and consumers alike grapple with these restrictions, questions that many may have regarded as academic a week ago are critical today.

Is my business insured for lost income from the shut down?

Many “business owner” insurance policies include coverage for lost income or “business interruption.”  But whether or not that coverage will apply to losses occasioned by a state-ordered shut down depends greatly on the particular language of your policy.

Most commonly, business interruption coverage applies to lost income caused by “direct physical loss or damage”[4] to the property where you do business, or to the equipment you use in your business.  In these policies, the definitions of “loss” and “damage” are usually restrictive to physical or mechanical impairment.  For example, if the roof in your boutique collapses, or if the kitchen in your diner is sidelined by fire damage, you may be indemnified for the income you lose during the restoration period.  Ordinarily this coverage would not relieve a business that is suspended for a reason unrelated to the damage or destruction of its own property (such as a government order to cease operations during a health crisis).

There are some versions of business interruption coverage that do apply to intervention by the government.  But here again, the language of the policy is crucial.  For example, one of the more inclusive (and less common) policy forms covers “[income] loss sustained during the period of time when … access to real or personal property is prohibited by order of civil or military authority.”[5]  It has been held that this policy does not require physical damage to trigger coverage[6]—coverage may lie, for instance, when the government bars access to the property as a protective measure in the face of an oncoming hurricane.  A policy formulation like this is perhaps promising for coverage of income lost to government-ordered Covid-19 lockdowns.

On the other hand, many other “civil authority” coverage types still require some connection to physical property damage or loss.  A common form covers “loss of Business Income you sustain … caused by action of Civil Authority that prohibits access to the described premises due the direct physical loss or damage to property other than [your property].”[7]  This version, in other words, more narrowly targets situations in which the government blocks access or entry to your property because of hazardous damage at a neighbor’s property.  A carrier is less likely to apply this coverage to a lockdown-related business interruption, in the absence of physical property damage.

Other considerations may govern the analysis if your business is interrupted more directly by actual Coronavirus exposure than it is by the PAUSE Executive Order.  For example, if you were forced to dispose of inventory or critical equipment because it was exposed to a Coronavirus-positive employee, your business interruption might be prolonged beyond the (eventual) sunset of Executive Order 202.8.  As noted, many of the common policy forms require that the business interruption stem from some form of physical “damage” or “loss” to property or equipment—but there is some debate as to whether a contamination may qualify as “damage” or “loss.”  Many courts appear to equate damage or loss with a physical structural change, but there is some authority for the proposition that a non-structural, chemical infiltration, for instance, is a sufficient physical property loss to trigger business interruption coverage.[8]

Another critical piece of the puzzle is what coverage exclusions are in your policy.  Regardless of whether your policy requires physical damage or not as a coverage trigger, a specific exclusion may disqualify you.  The most pertinent is the relatively common exclusion that bars coverage for: “loss or damage caused by or resulting from any virus, bacterium or other microorganism that induces or is capable of inducing physical distress, illness or disease.”[9]  Therefore, a threshold consideration of your coverage prospects is to determine whether this or a similar exclusion is tucked into your policy.

The short answer, therefore, is that the devil is in the details.  Whether you may have coverage for Covid-19 related business interruption depends entirely on the particular combination of coverage formulations and exclusions in your insurance policy.  It is important to study the policy carefully to make an educated determination.

I can’t fulfill my contractual obligations because of the lockdown.  Am I liable for breach of contract?  My suppliers are offline and my tenants aren’t paying the rent.  Are they liable to me?

The first place to look is in the contract itself.  The pandemic has cast a bright spotlight on a type of provision that is often regarded as an afterthought, relegated to the bottom pages of the contract: the “force majeure” clause.  A force majeure clause (French for “superior force”) is a contract provision that expressly defines the parties’ rights and obligations in the event of an unforeseen misfortune.  A typical version might read as follows:

Neither Party shall be liable for any failure or delay in performance under this Agreement to the extent said failures or delays are proximately caused by causes beyond that Party’s reasonable control and occurring without its fault or negligence, provided that, as a condition to the claim that a party is not liable, the party experiencing the difficulty shall give the other prompt written notice, with full details following the occurrence of the cause relied upon.[10]

Some versions are more specific, limiting the clemency to a particular list of disasters, such as inability to perform because of fire loss, storms, “war,” flood, or the oft-debated “Acts of God.”  The Covid-19 measures may spawn a healthy crop of litigation about whether the shutdown did or did not “proximately cause” an individual party’s non-performance. In many cases there will be little doubt that an Executive Order prohibiting everyone from going to work is a circumstance beyond the parties’ control (except for cases with narrowly drawn clauses), but there may be triable questions about whether a particular company could have or should have serviced a particular agreement, working remotely or through some other permissible work-around.  At one end of the spectrum, a banquet hall clearly cannot honor a wedding reception reservation for Saturday March 28, 2020.  At the other end, a web design firm with technicians working remotely from home, may be able to complete client’s website redesign by the target date.  There are numerous businesses that fall somewhere in the middle, in which the defendant’s ability or inability to perform may, itself, be the issue in controversy.

If the shutdown has disabled your business, it is important that you review your contracts for force majeure clauses.  Don’t assume that you are protected, and don’t be passive.  If you do have such a clause, it may contain specific requirements in which you must give notice to the other party that you are invoking it, and why (like the example above). Make sure you preserve your defense by complying strictly with these requirements.

Note that if you have already accepted payment to provide a good or service and you rightfully invoke the force majeure clause as an excuse for non-delivery, the law nevertheless requires you to refund the payment you have accepted.[11]

What if my contract doesn’t have a force majeure clause?

In the absence of a force majeure clause, common law doctrine will excuse a party’s performance for unforeseen circumstances that render his or her performance impossible.  The case law stresses that the changed circumstances must make performance literally impossible, not merely more difficult or costly.[12]

Unforeseeable governmental action that effectively prohibits performance may constitute a valid impossibility defense.  However, temporary governmental interference does not necessarily excuse performance indefinitely.[13]  Therefore, for example, the Covid-19 restrictions may legitimately make it impossible for parties to close on a property sale while law firms are in isolation, but will not necessarily excuse either party from closing after the restrictions are relaxed.  The impossibility doctrine is most apt to excuse contractual obligations that are due in the short term, which cannot be met while employees are barred from the workplace.  It will be less apt to longer term contractual undertakings that can resume when the workplace is up and running again.

Special mention should be made regarding contractual obligations to make rent and mortgage payments. The Governor’s Executive Order prohibits the enforcement of tenant evictions and mortgage foreclosures for a period of ninety days.[14]  The Order does not excuse tenants or mortgagees from financial liability for missed payments, but does spare them from the remedy of dispossession during the specified time frame.  It remains to be seen whether the relief period will be extended by further Order.

If you have any questions, please contact Ben Neidl at bneidl@joneshacker.com or call 518-270-1253.

[1] See https://www.governor.ny.gov/news/no-2028-continuing-temporary-suspension-and-modification-laws-relating-disaster-emergency
[2] For a complete list of “essential” businesses, see: https://www.governor.ny.gov/news/governor-cuomo-issues-guidance-essential-services-under-new-york-state-pause-executive-order
[3] See Executive Order 202.8, citing N.Y. Public Health Law §12.
[4] See ISO Form CP 00 30 04 02, Coverage “A1.”
[5] See Fountain Powerboat Indus., Inc. v. Reliance Ins. Co., 119 F. Supp. 2d 552, 557 (E.D.N.C. 2000); see also Sloan v. Phoenix of Hartford Ins. Co., 207 N.W.2d 434 (Mich. 1973).
[6] Id.
[7] See ISO Form CP 00 30 04 02, Coverage “A5.”
[8] See Gregory Packaging, Inc. v. Travelers Property and Casualty Company of America, No. 12-cv-04418, 2014 WL 6675934 (D.N.J. Nov. 25, 2014); see also Trupo v. Preferred Mut. Ins. Co., 59 A.D.3d 1044 (4th Dep’t 2009)(chemical infiltration of home constituted “direct physical loss” under home owner’s policy).
[9] See ISO Form CP 01 40 07 06.
[10] See 6B New York Forms Legal & Bus. § 11A:37 (West).
[11] Cintron v. Tony Royal Quality Used Cars, Inc., 132 Misc.2d 75 (Civ. Ct. Kings Co. 1986); Toledano & Pinto, Inc. v. Anasae Corp., 83 N.Y.S.2d 612 (S. Ct. N.Y. Co. 1948).
[12] Di Scipio v. Sullivan, 30 A.D.3d 660 (3d Dep’t 2006).
[13] Green Island Contracting Co. v. State, 117 Misc.2d 435 (Ct. Claims 1983); Schoelkopf v. Morlbach Brewing Co., 184 N.Y.S. 267 (S. Ct. Erie Co. 1920).
[14] https://www.governor.ny.gov/news/no-2028-continuing-temporary-suspension-and-modification-laws-relating-disaster-emergency
Important Points: NYS COVID-19 Leave Law

Last week, just a couple of days before the 100% workforce reduction mandate, the Legislature approved and Governor Cuomo signed a new law that provides job protection and leave benefits for certain employees impacted by the COVID-19 pandemic.  Now that the flow of Executive Orders and guidance documents has slowed to a trickle, we wanted to share some important points to guide our local businesses.  These local businesses are the life blood of our Capital Region community – our favorite eateries, hair and nail salons, chiropractors, physical and occupational therapists, massage therapists, retail stores, spas, yoga studios and gyms, printers and so many other valued service providers, and in many instances, our friends.  We hope this guidance is helpful to you as you navigate the uncertainty of the COVID-19 world.  And we look forward to patronizing your business as soon as that is possible.

The 100% Workforce Reduction Mandate:

Effective Sunday, March 22, 2020 at 8 p.m., a 100% workforce reduction mandate was put in place.  It:

  • Does apply to private for-profit and not-for-profits entities.
  • Does not apply to essential businesses (there is a list, see link below).
    • This doesn’t mean everyone can show up to work. Only employees who are needed to perform the essential services or provide the essential products should report to work. (For example, if you are making masks and luxury phone covers, only those who are needed to make masks are to report to work.)  Telecommuting/remote working should still be in place to the maximum extent possible.
  • Allows non-essential businesses that provide services, goods or support to essential businesses to be exempt from the 100% workforce reduction mandate.
    • Again, this doesn’t mean everyone can show up to work.
  • Includes a process for a business to request a designation as an essential business (see link below).
  • Allows non-essential businesses to have a single person in the office to answer phones, handle mail, etc.
    • This person is not supposed to be in contact with anyone else.

This Executive Order is currently effective through April 19, 2020.  Here are some helpful links:

  • The guidance document issued by Empire State Development on essential businesses is here. (This has the application to request a designation as an essential business.)
  • Executive Order 202.8 (with the 100% workforce reduction mandate) is here.

COVID-19 Paid Leave:

This law was passed a couple of days before the 100% workforce reduction mandate.  It applies to employees who are subject to a “mandatory or precautionary order of quarantine or isolation.” (We will refer to these here as “orders”).  It includes job protections, mandated paid leave and includes provisions on Paid Family Leave and Disability benefits.

Mandated Paid Leave:

  • Employers have to provide unpaid and paid leave to employees during the period of time an order is in place. The requirements for each employer depend largely on the number of employees as of January 1, 2020:
    • All employers who have less than 100 employees have to provide unpaid leave during the period of time an order is in place.
    • In addition:
      • If the business has 1-10 employees and had net income of more than $1 million during its last tax year OR if it had 11-99 employees (regardless of income), it also has to provide five days paid leave to employees;
      • If the business has 100 or more employees, then it has to provide 14 days paid leave to employees.
    • Employees don’t have to apply for this paid leave. And you cannot require an employee to first use their accrued sick leave.
    • There are some exceptions:
      • If the employee traveled to a foreign country subject to a Level 1 or 2 travel health notice, the trip wasn’t for work and the employee knew about the travel health notice, then the employee is not entitled to paid leave benefits.
      • Employees who are deemed asymptomatic or who haven’t yet been diagnosed and are physically able to work (remotely or otherwise) during the period of time the order is in effect are not protected by this legislation (which would include the unpaid/paid leave benefits, paid family leave/disability benefits and job protections). Unfortunately, it seems a bit unclear what this means (and also what is included as a mandatory or precautionary order of quarantine or isolation).  The Department of Labor is authorized to issue emergency regulations, so hopefully useful guidance will follow soon; in the meantime, we recommend conservative interpretations of these provisions.
    • There are also provisions which apply to public employers.

Paid Family Leave/Disability Benefits

  • After an employee has received any paid leave provided for above, and used any remaining sick leave, the employee may be able to obtain paid family leave or disability benefits. The legislation loosens up the procedures and eligibility for these benefits in a few ways, for example:
    • A “disability” includes an inability to perform regular work duties because of an order.
    • Waiting periods for benefits are eliminated, allowing them to be paid on the first day of disability (or unemployment).
    • Family leave includes both leave taken when the employee is subject to an order or leave to care for minor children who are subject to an order.

Job Protections:

  • Once an employee returns to work, the employee must be restored to the same position with the same pay as before leave was taken. The employee cannot be fired, retaliated against or discriminated against for taking leave.

Here are some links for more on this legislation:

  • The legislation can be found here.
  • Guidance on the legislation is here.

Some other things to keep in mind:

  • If an employer closes down its operations, then employees may apply for unemployment benefits. Be sure to provide your employees with the required NYS record of employment form.
  • The legislation provides that if a federal law is put in place which provides employees with COVID-19 benefits, then the NYS benefits don’t apply unless they exceed what the federal law applies (and then only to the extent of the excess). There has been some activity in this area, so there could be changes to the impact of the NYS legislation.
  • There were a number of other New York State Executive Orders and other governmental orders issued last week that could affect your business or your employees. These include forbearance on mortgage payments, abatements for sales tax filings and payments (these even include interest on late payments), procedures for virtual notary publics, and court shutdowns which impact lawsuits and evictions.  Please let us know if you need help navigating these.
  • Don’t forget to take into account your employee benefit plans. Depending on the measures you need to take during this pandemic, you may need to look at whether you have to continue to provide health care benefits, FMLA leave or give COBRA notifications.  Please let us know if we can help.

If you have any questions, please get in touch with Rose McKenna at rmckenna@joneshacker.com or call 518-270-1257.

Court Closures Due to Coronavirus

It seems like everything is shutting down in the wake of the coronavirus crisis, to an extent never before seen in modern history. Some services, however, are essential, such as grocery stores, medical treatments, and the court system. Even the New York court system, however, has cut its operations down to “essential services” on the order of Governor Andrew Como, and the federal courts sitting in New York have followed suit.

The following is a rundown of which services are and are not being offered by courts in New York. Be aware that the situation is rapidly evolving, and that as a consequence, some of this information may have changed by the time you read this.

New York State Court System

As of March 16th, all “nonessential” court functions are suspended. See below for which functions are considered non-essential. Please note that, to the extent that the court enjoys discretion in determining whether a matter is “essential” enough to be handled, the court will attempt to minimize the necessary court appearances.

Pending Criminal and Civil Trials: Pending civil trials (lawsuits, for example) and criminal trials will continue without interruption until they are concluded.

New Criminal and Civil Trials: No new criminal or civil trials will start until further notice from the courts. Keep in mind that, in the case of criminal trials, some of the defendants awaiting trial are currently incarcerated because they are being held without bail or because they cannot afford bail.

Special Courtrooms: Within New York state but outside of New York City, special courtrooms have been established in designated courthouses to handle essential matters in a consolidated manner (multiple similar cases, for example, may be handled in a single proceeding for the sake of efficiency). Inside New York City, courthouses will remain open, but only to handle essential matters.

Essential civil matters: New York state courts will handle essential civil matters such as guardianship applications and civil commitments. The court enjoys discretion in determining which matters are considered “essential”.

Evictions: As of March 16th, all eviction proceedings are suspended throughout the state until further notice.

New York City Housing Court: The NYC Housing Court will continue to handle essential matters such as landlord lockouts, repair orders, serious violations of the housing code, etc.

Non-trial criminal matters (Superior Court): The court reserves the right to handle applications concerning essential matters in its own discretion. In addition:

  • The resolution of criminal matters (motions, petitions, etc.) involving a felony defendant who is not currently in custody will be postponed until further notice from the courts.
  • If a felony defendant is currently in custody, the matter can either be postponed or resolved through a video hearing if the location has access to video technology. Video hearings are available throughout New York City.

Criminal matters (lower courts): In New York City, essential criminal matters handled by the lower courts will proceed through video hearings, while outside of New York City, these matters will proceed to the extent that available local technology allows. The same applies to other criminal matters handled by the lower courts, such as petitions for orders of protection.

Arraignments: In New York City, arraignments will proceed through video hearings, while outside of New York City, arraignments will proceed by videoconferencing to the extent that available local technology allows. In New York City, two arraignment sites (the Midtown Community Court and the Red Hook Community Court) have been designated for video hearings on behalf of people thought to be at particular risk for COVID-19 infection.

Family Courts: The family courts will hear only essential matters such as those involving the welfare of a child,  juvenile delinquents, family offenses such as domestic violence, and child support matters.

The Surrogate’s Court: The Surrogate’s Court will handle only essential matters as determined in the court’s discretion.

Court of Claims: The Court of Claims will handle only essential matters as determined in the court’s discretion.

Toll-Free Hotline: The courts will establish a toll-free hotline, open 24/7, to answer questions about court operations during the coronavirus crisis.

Federal Courts (United States District Court for the Northern District of New York)

The US federal courts operate on a completely different system than the New York state courts do, since they answer to federal authority rather than to state authority. Nevertheless, many of the same decisions have been made concerning the scope of the courts’ operation during the coronavirus crisis.

Jury Trials: All jury trials are suspended until April 30th. This suspension applies to both civil matters (lawsuits, for example) and criminal matters. Jury selection procedures have also been suspended for the same length of time. The court may order exceptions to these suspensions on a case by case basis.

Criminal trials: Criminal trials are suspended until April 30th, including bench trials (non-jury trials).

Criminal matters before magistrates: Criminal matters before magistrates such as initial appearances, arraignments, the issuance of search warrants, etc., will continue as usual. Nevertheless, the court may, in its discretion, decide to hear certain matters over the telephone or through video conferencing.

All courtroom activities not related to an ongoing case are suspended until April 30th (group tours, bar association meetings, naturalization ceremonies, etc.).

The District Court Clerk’s Office hours will be restricted to 10:00 am to 2:00 pm Monday to Friday.

Courthouse entry restrictions: As of March 16, 2020, no one will be allowed to enter a courthouse if they:

  • Have traveled abroad within the last two weeks;
  • Live with or have close contact with anyone who has traveled abroad within the last two weeks;
  • Have been asked to self-quarantine by a healthcare professional;
  • Have been diagnosed with COVD-19;
  • Have been in contact with anyone diagnosed with COVID-19; or
  • Has a fever, cough, or shortness of breath.

If you have an appointment to appear in court but are unable to enter because of the foregoing restrictions, please contact your attorney, the Court, your probation officer, your pretrial services officer, the jury department, or the Public Defender’s Office as appropriate according to the nature of your case or concern.

Except for the suspensions listed above, the business of the Court will proceed as usual. The Court will continue to be reachable by telephone and mail, and electronic filings will still be accepted. The April 30th deadline may be extended if circumstances so demand.

Unresolved Issues

At this point, important issues have not been specifically resolved, including the status of court-ordered personal service of process (notices of court hearings delivered in person to defendants).

Mediation and Arbitration

If you are involved in a civil case, you might prefer to resolve your dispute through mediation or arbitration rather than to wait a long time for a trial. Even mediation and arbitration have been affected, however.  The American Arbitration Association, for example, will not hold arbitration hearings in its facilities until at least April 17th, and many of the nation’s mediation organizations have followed suit.

Of course, depending on the nature of your dispute, it may be possible to resolve your dispute by videoconferencing and mail, rather than by a physical hearing. Otherwise, you might consider moving the venue of the arbitration or mediation to an alternate location where it is easier to practice social distancing.

Legal Effects of Long Trial Backlogs

The suspension of all trials during the coronavirus crisis makes sense, but it will have cascading effects that endure even after the crisis ends. The 6th Amendment grants criminal defendants the right to a speedy trial. That right applies whether the defendant is being prosecuted by a state or a federal court, and whether the defendant is out on bail or in jail awaiting trial.

For the moment, the coronavirus crisis can be used to justify a two-month postponement of a defendant’s trial, notwithstanding his right to a speedy trial. The real problem will come once federal courts become overwhelmed with a backlog of cases due to the suspension of trials during the coronavirus crisis. If the courts cannot catch up within a reasonable time, the charges against many criminal defendants might simply have to be dismissed.

Plea Bargaining

Another more disturbing problem involves defendants who are in jail waiting for trial during the coronavirus crisis. Even though these defendants have not been convicted of the crimes they are charged with, they are still incarcerated – perhaps in crowded conditions that are ideal for the spread of a virus. If their trial is delayed for long enough, they might agree to plead guilty to a crime they didn’t commit just to get out of jail sooner.


The effect of the coronavirus crisis on civil matters, such as lawsuits, is not expected to be nearly as serious. Nevertheless, the inevitable backlog is likely to encourage parties to settle rather than to stand in the back of a long line for a trial.

We’ll Be Here When You Need Us

If you have a concern or a question, there is no need to wait until the crisis is over to inquire about it. Contact E. Stewart Jones Hacker Murphy, through our online contact page or by telephone, to schedule a free initial consultation. The consultation can be done by phone – there is no need to come to our office during the quarantine period.

For future reference, our offices are located in Albany, Colonie, Schenectady, Saratoga, and Troy.

John F. Harwick, Esq. has been elected to the Board of Directors.

John F. Harwick, Esq. has been elected to the Board of Directors for the Albany County Bar Association for 2020. Formed in 1900, the bar association is  one of the oldest in the country. It currently has approximately 1200 members. Each year it hosts the highest court in the state, the Court of Appeals, at a black-tie gala event. This year’s dinner took place at the Albany Convention Center. Mr. Harwick pictured here with the Court of Appeals in the front row and the ACBA board in the back.

Amid Coronavirus Crisis, Nursing Homes Asking Family Members Not to Visit

Visits to Nursing Homes to be Temporarily Restricted Nationwide

About two and a half million Americans live in nursing homes and assisted living facilities. Unfortunately, the coronavirus is particularly deadly to the elderly – so much so that about 80 percent of all COVID-19 deaths occur among the over-65 age group. The danger to people 80 and older is even more acute, with an overall mortality rate that has been estimated as high at 18 percent.

The high death rate among octogenarians (and the elderly in general), is dramatically higher than any other age group for two main reasons:

  • The elderly typically suffer from weakened immune systems due to the natural effects of aging; and
  • The elderly often suffer from underlying conditions such as diabetes which, when combined with coronavirus symptoms, prove particularly deadly. Elderly patients with respiratory conditions such as emphysema are particularly at risk.

Nursing Homes Take Action

Nursing home residents are among the most vulnerable people in society right now. As a consequence, hundreds of nursing homes have been restricting visitors or even banning them altogether. Although this measure may seem harsh, its logic is impeccable during a time when merely hugging your grandmother could kill her. With the exception of staff, relatives are the people most likely to transmit the virus to residents.

On March 10th, the American Health Care Association, an organization representing over 13,000 nursing homes and similar care facilities, issued a joint recommendation together with the National Center for Assisted Living, urging nursing homes to impose severe visitation restrictions to protect against the spread of COVID-19.

Although these recommendations are non-binding, the Department of Veterans affairs announced the same day that at least 134 nursing homes throughout the nation had already implemented a “no visitors” policy. It is likely that the number of nursing homes implementing such a policy was far greater than 134. The situation has already changed, however.

National State of Emergency Guidance on Nursing Home Visits

On March 12th, President Trump, acting on a recommendation from the Centers for Disease Control and Prevention (CDC), declared a national state of emergency, which not only freed up billions of dollars to fight the COVID-19 virus, but also provided the following guidance to nursing homes:

  • Suspend all visitation, even from relatives, except for extraordinary situations such as when the resident is facing imminent death;
  • Screen everyone who comes into the facility, whether or not they are coming to visit a resident;
  • Temporarily ban all volunteers and non-essential healthcare personnel (HCP);
  • Suspend all group activities;
  • Suspend communal dining; and
  • Frequently screen residents and staff for coronavirus symptoms.

Although the federal ban is not mandatory, New York Governor Andrew Cuomo announced a similar, mandatory ban on nursing home visitation that took effect the next day. The New York ban is arguably even more restrictive, since it requires nursing home staff to wear masks.

How Long Will the Restrictions Last?

Unfortunately, it is impossible to say with confidence how long the coronavirus restrictions on nursing home visitation will remain in place. Ultimately, that depends on how long it takes to contain the virus, and epidemiologists are uncertain as to how long that will take. Estimates of the length of time that social distancing measures, including nursing home visitation restrictions, will remain in place range from a few months to over a year.

Background: The Seattle Outbreak and Its Consequences

Early in the US epidemic, the Life Care Center of Kirkland, a Seattle-area nursing home, became Ground Zero for the coronavirus outbreak in the United States after staff members worked while ill and spread the virus to nursing home residents. At least 35 deaths have been traced to this one nursing home, representing the first cluster of infections anywhere in the United States.

All told, 129 COVID-19 cases linked to the Life Care Center of Kirkland have been identified so far – 81 residents, 34 staff members, and 14 visitors. The Life Care Center enjoys the unenviable distinction of serving as the country’s largest single source of coronavirus deaths, and the ultimate source of about one-quarter of all coronavirus deaths nationwide.

Just How Contagious Is COVID-19? The Percentages

The numbers at the Life Care Center, already shockingly high, look even worse when you take into account the size of the establishment. The Life Care Center housed only 120 residents at the time of the outbreak – two-thirds of whom became ill and over a quarter of whom died.

The grim numbers provide a reminder of just how infectious COVID-19 really is, as well as the necessity of containment measures that might seem draconian under ordinary circumstances. The rate of contagion among the elderly, however, is likely to somewhat exceed the rate of contagion among the general public, because of the weakened immune systems often suffered by the eldelty.

Why It Happened: Lessons from the Life Care Center Tragedy

A number of factors combined to create the “perfect storm” of COVID-19 infections at the Life Care Center. Most prominent among these are:

  • No paid sick leave: Failure to offer paid sick leave to staff meant that nursing home staff members were likely to work while ill because they had no sick leave and would face financial difficulties if they took time off, suggested Dr. Jeff Duchin, public health officer for Seattle and King County. The outbreak represents an unintended consequence of the limited availability of sick leave throughout the United States.
  • Slow response time: Although staff noticed an outbreak of respiratory illness by February 10th, it wasn’t until February 26th that Life Care Center notified Washington state officials. After reviewing 911 call logs, the Seattle Times suggested that staff may have noticed the outbreak even before February 10th. That amount of time is virtually an eternity in epidemiology.
  • Bureaucratic disorganization: Confusion reigned among both nursing home administration and Washington state health officials over whose responsibility it was to test patients for the coronavirus. This “passing the buck” delay wasted valuable time.
  • Lack of access to testing resources: It wasn’t until March 7th, nearly a month after the outbreak had first been noticed by staff, that the Life Care Center obtained enough testing kits to test all of its residents. The testing of residents and staff wasn’t complete until March 14th.
  • A lack of protective gear.

The Nursing Home Crisis Spreads Nationwide

It gets worse. The CDC has concluded that Life Care Center staff members worked at other nursing homes during the same period, spreading COVID-19 to other nursing homes in the Seattle area.


By mid-March, 46 people, including 33 residents and 13 staff members, had tested positive for COVID-19 at the Chateau Nursing and Rehabilitation Center in DuPage County, Illinois, in the Chicago metro area.


The COVID-19 virus is now suspected (and in some cases confirmed) to have infected people in no less than 19 long-term care facilities in Florida. A Florida nursing home coronavirus epidemic is even more threatening than epidemics in other states, because Florida’s nursing home population exceeds that of any other state due to its popularity as a retirement destination.

New York

Apparently, no similar disaster has affected New York nursing homes – yet. Even here, caution is in order because of COVID-19’s long incubation period – you can carry the virus for up to two weeks before you get sick.

Legal Issues

New York State has granted nursing homes and hospitals immunity from civil liability related to COVID-19, except in cases of gross negligence which may be difficult to prove.  Hospitals and nursing homes remain liable for other forms of neglect and abuse.

We’re on Your Side

It is not always obvious when you have a genuine nursing home abuse or wrongful death claim, because you might not know yet whether your loved one’s illness can be traced to the fault of the nursing home or one of its employees. We can help. Contact E. Stewart Jones Hacker Murphy as soon as you can, either online or by calling us directly, to set up a free consultation.

We maintain five offices in Albany, Colonie, Schenectady, Saratoga, and Troy.