At the outset, we emphasize that, in order for prosecutorial jurisdiction to lie in New York County, it is that county, and not the City generally, that must suffer a particular effect as a result of defendants’ alleged conduct. The statutory requirement that the conduct have a materially harmful impact may thus be satisfied only by a concrete and identifiable injury or the welfare of the county’s community. Moreover, to be materially harmful, the criminal impact must be more than minor or incidental, and the conduct must harm the well being of the community as a whole, not merely a particular individual. In addition, because the jurisdiction of the county seeking to prosecute must be established before the grand jury, the type of personal injury or offense contemplated by the particular effect statute must be perceptible and of the character and type which can be demonstrated by proof before a Grand Jury. Because particular effect jurisdiction is to be applied only in limited circumstances, it has been rarely invoked.
There is no dispute that criminal defendants’ conduct, if true, had a materially harmful impact on the governmental processes or community welfare of New York City as a whole. By underreporting income on their New York City tax returns, defendants deprived the City of revenue that would otherwise have been available to meet its financial obligations and fund its governmental operations. Such a loss of revenue, which could lead to cuts in city services or increases in taxes, clearly constitutes a perceptible injury to the City of New York. The question presented, however, is whether the evidence before the grand jury establishes a concrete and identifiable injury suffered specifically by New York County. We conclude that it does not.
The People’s theory of venue is based on New York County’s status as the seat of City government, and the resultant processing of city income tax revenue in that county. Under this theory, defendants’ alleged tax evasion has a particular effect on New York County because New York City taxes are processed and remitted to the City through the Transitional Finance Authority, which is located in New York County, and through city bank accounts also located there. Further, these fraud accounts are controlled by the New York City Commissioner of Finance, whose office is located in New York County, as is the Department of Finance’s Bureau of Treasury, which oversees the collection and management of the City’s tax revenue.