Case Title: Com. v. Lavelle

Citation: 382 Pa. Super. 356, 555 A.2d 218

Docket Number: 

State: pennsylvania

Court: Pennsylvania Supreme Court

Date: 1989-11-09T00:00:00Z

Document:
382 Pa. Superior Ct. 356 (1989) 555 A.2d 218 COMMONWEALTH of Pennsylvania v. William LAVELLE, III, Appellant. COMMONWEALTH of Pennsylvania v. LAVCO, INC., Appellant. Supreme Court of Pennsylvania. Argued November 9, 1989. Decided February 15, 1989. Reargument Denied March 14, 1989. *358 Charles P. Gelso, Wilkes-Barre, for Lavelle, appellant (at 2928). Albert J. Slap, Philadelphia, for Lavco, appellant (at 3129). Keith Welks, Deputy Attorney General, Harrisburg, for Com., appellee. Before CIRILLO, President Judge, and CAVANAUGH, ROWLEY, WIEAND, McEWEN, OLSZEWSKI, BECK, TAMILIA and POPOVICH, JJ. *359 McEWEN, Judge: These consolidated appeals were undertaken from the judgments of sentence imposed upon appellants, William A. Lavelle, III,[1] and Lavco, Inc.,[2] after the trial court, sitting without a jury, found each of them guilty of violations of the corrupt organizations statute, 18 Pa.C.S. § 911.[3] The able opinion of the distinguished President Judge Edwin M. Kosik provides an apt summary of the facts giving rise to the prosecution of appellants: The sole issue raised in the appeal of William A. Lavelle, III, is that he is entitled to discharge by virtue of the fact that the proceedings against him were instituted after the period prescribed by the applicable statute of limitations had expired. Appellant contends that the five year statute of limitations provided by 42 Pa.C.S. § 5552(b)(1), effective July 12, 1982, cannot be retroactively applied to the instant prosecution when the last predicate offense occurred in June of 1979. Rather, appellant argues, the former two year statute of limitations contained at 42 Pa.C.S. § 5552(a) is applicable, so that the criminal complaint issued against appellant on August 5, 1983, was time barred.[4] The Attorney General argues that the amended five year statute of limitations should be applied retroactively, but that even if the former two year statute of limitations were to be applied, the prosecution was instituted in a timely fashion since the date of the last predicate act is irrelevant in determining the date upon which the statute of limitations commences. The violations of the corrupt organizations statute committed by appellant are continuing offenses in that the offenses are "deemed to continue so long as the person who committed the violation continues to receive any benefit from the violation." 18 Pa.C.S. § 911(c). Thus, as the trial court correctly concluded, the statute of limitations does not *363 commence running upon the date on which the last predicate offense is committed but instead, commences upon the date on which the defendant last receives a benefit from the offense. 18 Pa.C.S. § 911(c). Since the statute of limitations period did not begin to run until the continuing violations of the Act, in the form of the receipt of benefits, ceased, we must determine at what point in time appellant Lavelle last received a benefit from his violations of Section 911(b)(1) and (b)(3) of the Corrupt Organizations Act. Appellant was charged with and convicted of violating section 911(b)(3) of the Act which provides: 18 Pa.C.S. § 911(b)(3). Thus, in order to convict appellant of a violation of 18 Pa.C.S. § 911(b)(3), the Commonwealth was required to prove that: Appellant's conviction under subsection (b)(3) rested, as recounted by the trial court in the aforequoted factual *364 summary, upon evidence of a series of thefts by deception committed by appellant in the course of his conduct of the affairs of the corporate enterprise of Wm. A. Lavelle & Son, Co. The company's final receipt of income from the disposal of hazardous waste was received on June 29, 1979.[6] However, pursuant to section 911(c), the violation of 18 Pa.C.S. § 911(b)(3) continued so long as appellant continued to receive any benefit from conducting the affairs of Wm. A. Lavelle & Son, Co. through a pattern of racketeering. The Commonwealth established that appellant received "loans" from Wm. A. Lavelle & Son, Co., totalling approximately $39,000, and that the last such "loan" occurred, on October 13, 1979. Appellant, however, also received substantial cash payments, designated as wages, from Wm. A. Lavelle & Son, Co. through the last quarter of 1979. Thereafter, appellant received substantial cash payments, designated as wages, from Lavco, Inc. through February of 1981. The last transfer of funds from Wm. A. Lavelle & Son, Co. to Lavco, Inc. occurred in February of 1981. These cash payments were receipts of benefits derived from the racketeering offense. Thus, the violation of 18 Pa.C.S. § 911(b)(3) continued at least until February of 1981.[7] The Commonwealth argues, however, that appellant Lavelle continued to receive a benefit so long as these loans remained unpaid and were carried on the books of Wm. A. Lavelle & *365 Son, Co., as accounts receivable. It appears from our review of the record that these loans were never repaid and, according to the Attorney General, were maintained on the books of the corporation "until at least the last quarter of 1982."[8] Thus, the Attorney General argues in this appeal that appellant continued to receive a benefit until "at least the last quarter of 1982".[9] If we were to accept the argument of the Commonwealth, we would be forced to conclude that because the loans remained unpaid, appellant is still enjoying a benefit and that, as a result, the statutory period of limitations has not yet commenced. This argument is spurious since it ignores the plain language of section 911(c) which tolls the statute for only so long as benefits are "received", rather than "enjoyed", and would result in the elimination of the statute of limitations in many, if not all, prosecutions under the Act.[10] Since we have concluded that the violation of 18 Pa.C.S. § 911(b)(3) by William A. Lavelle III continued, as a result of his receipt of benefits arising from the violation, until at least February of 1981, it is upon this date that the statute of limitations commenced running. The statute of limitations applicable, in February of 1981, to violations of the Corrupt Organization Act was the two year statute of limitations formerly provided by 42 Pa.C.S. § 5552(a). This two year limitations period would have expired in February of 1983. However, on May 13, *366 1982, prior to the expiration of the statute of limitations, the legislature enlarged the two year statute of limitations provided by 42 Pa.C.S. § 5552(a) to five years for certain offenses, effective July 12, 1982. 42 Pa.C.S. § 5552(b). Thus, the issue presented by the appeal of William A. Lavelle, III, is whether the five year statute of limitations, which became effective prior to the expiration of the former two year limitations period, is applicable to these offenses. This Court resolved this issue in the en banc decision of Commonwealth v. Harvey, 374 Pa.Super. 289, 542 A.2d 1027 (1988). The Court held that where a prosecution has not yet been commenced, and the applicable period of limitations is enlarged by the legislature, the new and expanded period of limitations is applicable, so long as at the time of the enactment of the new period of limitations, the right of the Commonwealth to proceed with a prosecution had not yet been barred under the former statute of limitations. Id., 374 Pa.Superior Ct. at 294, 542 A.2d at 1029. The Supreme Court of Pennsylvania thereafter analyzed this very issue and reached the same conclusion. Commonwealth v. Johnson, 520 Pa. 165, 553 A.2d 897 (1989). In the instant case, the violation of Section 911(b)(3) of the Corrupt Organizations Act by William A. Lavelle III, continued, as a result of his continued receipt of benefits from earlier predicate acts in violation of the Act, until February of 1981. Thus, on July 12, 1982 (the effective date of the Act of May 13, 1982, P.L. 417, No. 122, § 1, 42 Pa.C.S. § 5552(b)), the former two year statute of limitations had not yet expired and the five year period of limitations provided by 42 Pa.C.S. § 5552(b) became applicable to the prosecution which was commenced by the filing of a criminal complaint on August 5, 1983. Appellant was also convicted of violating 18 Pa.C.S. 911(b)(1) which provides, in pertinent part: 18 Pa.C.S. § 911(b)(1). Thus, the Commonwealth had the burden of proving that: The evidence at trial established that appellant participated, as a principal, in Wm. A. Lavelle & Son, Co.'s racketeering activities during the period between 1976 and 1979 and that appellant received substantial income from that racketeering activity. Appellant invested part of this income in Lavco, Inc., which utilized the funds for the initial establishment of the business, as well as for its ongoing operating expenses. As heretofore noted, the record indicates that the last transfer of funds from Wm. A. Lavelle & Son, Co., to Lavco, Inc. in February of 1981. Thus, appellant's violation of 18 Pa.C.S. § 911(b)(1) continued through February of 1981 and was, therefore, pursuant to our earlier analysis, subject to the five year statute of limitations provided by 42 Pa.C.S. § 5552(b). We find, therefore, that the prosecution of appellant William A. Lavelle III for violations of 18 Pa.C.S. § 911(b)(1) and (b)(3) was timely commenced. We, therefore, affirm the judgment of sentence imposed upon William A. Lavelle, III. Appellant Lavco, Inc. argues, inter alia, that it is entitled to discharge because it did not violate Section 911(b)(1) of the Corrupt Organizations Act since it did not participate as a principal in any racketeering acts or predicate offenses as required by 18 Pa.C.S. § 911(b)(1). The complaint filed against Lavco, Inc. charged that: However, contrary to the allegations of the complaint, the prosecution concedes that no evidence was offered to establish *370 that Lavco, Inc. participated in any racketeering activity, as a principal or otherwise, or that Lavco invested, in any other enterprise, any income realized by it from racketeering activity in which it had participated as a principal. The Commonwealth argues, however, that the trial court properly found appellant Lavco, Inc. guilty of violating 18 Pa.C.S. § 911(b)(1) for the reason that Lavco, Inc. "was a continuation successor of Wm. A. Lavelle & Son, Co., which participated as a principal in the racketeering pattern."[11] The precise issue presented by the appeal of Lavco, Inc., namely, whether a de facto successor corporation can be held criminally liable for the acts of its predecessor in interest, is one of first impression in this Commonwealth. However, the issue of the liability of a successor corporation for compensatory and punitive damages resulting from the conduct of its predecessor has been previously addressed by our appellate courts. Thus, we rely for guidance upon established principles of tort law, believing that reference to principles developed in the civil law is appropriate under the circumstances of this case since "a corporation *371 cannot be sent to jail. The discharge of its liabilities whether criminal or civil can be effected only by the payment of money." Melrose Distillers, Inc. v. United States, 359 U.S. 271, 274, 79 S. Ct. 763, 766, 3 L. Ed. 2d 800 (1959). The trial court found that Lavco, Inc. was liable for the criminal acts of Wm. A. Lavelle and Son, Co., which had been committed prior to the incorporation, on December 21, 1978, of Lavco, Inc., based upon its finding that "Lavco, Inc. was conceived to be, and did become the de facto successor and a continuation of Wm. A. Lavelle and Son, which remained nothing more than a shell. When such a continuation exists, as demonstrated by the evidence in this case, we believe that the continuing corporation ought to be criminally liable for the acts of its predecessor in fact." The trial court based its conclusion upon the following facts: The court also noted that Wm. A. Lavelle "was represented by a public defender; Lavelle and Son had no representative except for the effort of the public defender, while the thrust of the paid defense was to save Lavco, the sole depository of the Lavelle enterprises." The Commonwealth argues that although there was no de jure consolidation or merger, Lavco is a mere continuation-successor to Wm. A. Lavelle & Son, Co. and is, therefore, *373 criminally liable for the acts committed by Wm. A. Lavelle & Son, Co. Husak v. Berkel, Incorporated, 234 Pa.Super. 452, 456-457, 341 A.2d 174, 176-177 (1975). Accord: Dawejko v. Jorgensen Steel Co., 290 Pa.Super. 15, 18, 434 A.2d 106, 107 (1981); Granthum v. Textile Machine Works, 230 Pa.Super. 199, 202, 326 A.2d 449, 451 (1974); Knapp v. North American Rockwell Corp., 506 F.2d 361, 363 (3rd Cir. 1974), cert. denied, North American Rockwell Corp. v. Knapp, 421 U.S. 965, 95 S. Ct. 1955, 44 L. Ed. 2d 452 (1975); Amader v. Pittsburgh Corning Corporation, 546 F. Supp. 1033, 1035 (E.D.Pa. 1982); Wright v. Federal Machine Co., Inc. 535 F. Supp. 645, 648 (E.D.Pa. 1982); Savini v. Kent Machine Works, Inc., 525 F. Supp. 711, 715 (E.D.Pa. 1981); Uni-Com Northwest, Ltd. v. Argus Publishing Co., 47 Wash. App. 787, 800, 737 P.2d 304, 311 (1987); Turner v. Bituminous *374 Casualty Co., 397 Mich. 406, 417 n. 3, 244 N.W.2d 873, 878 n. 3 (1976). The Commonwealth concedes that there was no legal merger or consolidation of the two corporations but contends that Lavco was formed with the sole objective of protecting, from criminal and civil proceedings, the funds realized by Wm. A. Lavelle & Son, Co. from its racketeering activities and that, as part of that plan, Wm. A. Lavelle & Son, Co. was transformed into a mere shell corporation, devoid of assets. The Commonwealth argues that to find that there was not a de facto merger of Wm. A. Lavelle & Son, Co. and Lavco, based solely upon the absence of articles of merger or consolidation, would be to ignore the evidence presented in this case, and would permit corporations engaged in criminal activity to escape all criminal liability for their conduct by simply forming successive corporations to shelter their ill gotten gains. In approaching the issue of the "de facto merger"/"mere continuation" theory of liability, we are mindful of the admonition of our Supreme Court, albeit made in the context of dissenting shareholders' rights, that "it is no longer helpful to consider an individual transaction in the abstract and solely by reference to the various elements therein to determine whether it is a `merger' or `sale'. Instead to determine properly the nature of a corporate transaction, we must refer not only to all the provisions of the agreement, but also to the consequences of the transaction and to the purposes of the provisions of the corporation law said to be applicable." Farris v. Glen Alden Corp., 393 Pa. 427, 432, 143 A.2d 25, 28 (1958). The Commonwealth has referred to both the mere continuation exception and the de facto merger exception to transferee liability in its argument on corporate successor liability. We have elected to analyze this issue under the de facto merger doctrine, which we believe to be applicable to the instant case. Employment of the mere continuation theory of liability would not alter our resolution of the issue since the two theories are difficult to distinguish: Knapp v. North American Rockwell Corp., supra at 506 F.2d at 365 (footnotes omitted). See also: Dawejko v. Jorgensen Steel Co., supra 290 Pa.Super. at 20, 434 A.2d at 108. Lumbard v. Maglia, Inc., 621 F. Supp. 1529, 1535 (S.D.N.Y. 1985) quoting Menacho v. Adamson United Co., 420 F. Supp. 128, 133 (D.C.N.J. 1976) (citations omitted). Accord: Dawejko v. Jorgenson Steel Co., supra 290 Pa.Super. at 20, 434 A.2d at 108. See also: Lackawaxen Water & Sewer Co. v. Pennsylvania Public Utility Commission, 85 Pa. Cmwlth. 377, 380, 481 A.2d 1386, 1388 (1984). *376 The evidence presented by the Commonwealth, and accepted by the trial court sitting as the trier of fact, provided proof beyond a reasonable doubt that Lavco, Inc. was the successor corporation of a de facto merger. Uncontradicted evidence established the (1) continuity of management (William A. Lavelle, III represented himself as President of Lavco, Inc., was its most visible representative, and solicited business for Lavco, Inc., just as he had for Wm. A. Lavelle & Son, Co.); (2) continuity of personnel (all of the employees of Wm. A. Lavelle & Son, Co. became employees of Lavco, Inc.); (3) continuity of physical location, assets and general business operations (Lavco operated out of the premises formerly used by Wm. A. Lavelle & Son, Co., purchased its major assets and took over all of its contracts). There was also a cessation of ordinary business by Wm. A. Lavelle & Son, Co. shortly after the formation of Lavco, Inc., and, although the corporation was not dissolved, it was reduced to an assetless shell. See: Amader v. Pittsburgh Corning Corporation, 546 F. Supp. 1033, 1036 (E.D.Pa. 1982). Lavco, Inc. assumed all of the liabilities ordinarily necessary for the uninterrupted continuation of the business conducted by Wm. A. Lavelle & Son, Co. (Lavco, Inc. applied for and was granted an extension by Blue Cross/Blue Shield of the Wm. A. Lavelle & Son, Co. policy on the basis that the transaction was "a name change" in companies; Lavco, Inc. assumed various accounts payable by Wm. A. Lavelle & Son, Co. as well as all of its contracts for hauling; Lavco, Inc. identified itself to the Department of Labor and Industry as a successor corporation to Wm. A. Lavelle & Son, Co., and was given the same rate applicable to Wm. A. Lavelle & Son, Co.). There is one factor absent, namely, continuity of ownership since William A. Lavelle III is not an officer of, and has no ownership interest in Lavco, Inc., but instead his son, William A. Lavelle IV is the designated President of Lavco, Inc., while his daughters, Michelle and Kathleen, are secretary and treasurer, respectively, of the corporation. Nonetheless, for reasons discussed hereinafter, we find that the absence of an identity of legal ownership, under the circumstances *377 of this case, is not an impediment to finding Lavco, Inc. to be the de facto successor corporation to William A. Lavelle & Son, Co. See: Lumbard v. Maglia, Inc., 621 F. Supp. 1529, 1535 (S.D.N.Y. 1985). See also: Martin v. Johns-Manville Corp., 322 Pa.Super. 348, 469 A.2d 655 (1983) reversed on other grounds, 508 Pa. 154, 494 A.2d 1088 (1985); Knapp v. North American Rockwell Corp., supra; Turner v. Bituminous Casualty Co., supra. The effect of a corporate merger or consolidation on the liabilities of the predecessor and successor corporations is set forth in Section 1907 of the Business Corporation Law, Act of May 5, 1933, P.L. 364, art. 1, §§ 1 et seq., as amended by the Act of July 20, 1968, P.L. 459, No. 216, § 49, 15 P.S. § 1907. Section 1907 provides, in relevant part: 15 P.S. § 1907 (emphasis supplied). The Business Corporation Law thus provides that upon merger or consolidation, "any claim existing or action or proceeding pending" may be prosecuted to judgment against the predecessor corporation or the new corporation may be substituted in the place of the predecessor corporation. Moreover, the statute provides that any "penalties. . . of the Commonwealth . . . not assessed prior to such merger or consolidation, shall be settled, assessed or determined against the surviving or new corporation. . . ." Thus, under the unique facts of this case, where Lavco, Inc. was the de facto successor of William A. Lavelle & Son, Co., the Commonwealth was clearly empowered to institute criminal proceedings against Lavco, Inc. as the "surviving or new corporation" of a de facto merger, for the offenses committed by its predecessor. See and compare: U.S. v. Polizzi, 500 F.2d 856, 908-909 (9th Cir. 1974). We believe that the fraud exception to the general rule of non-liability of a purchasing corporation, i.e., where the transaction is fraudulently entered into to escape liability, also has application in the instant case. Lavco argues that it cannot be held criminally liable for the criminal acts of Wm. A. Lavelle & Son, Co., committed under the direction of William A. Lavelle, III, since there is no identity of ownership between the two corporations because the affairs of the corporation were directed and controlled by his three children, and not by William A. Lavelle, III. The Commonwealth sought to establish at trial that the sole reason for the designation of these officers was to *379 conceal the ownership interest of William A. Lavelle, III, and thus shelter the proceeds of his racketeering activities from the reach of the government. We find that the evidence presented by the Commonwealth, although circumstantial, was sufficient to establish that William A. Lavelle III, assisted in the creation of Lavco, Inc. and retained an undisclosed ownership interest in Lavco, Inc., for the sole purpose of evading financial responsibility for his criminal acts. In fact, such a conclusion seems rather inescapable. There was considerable publicity in the latter part of 1978 and early in 1979 concerning an investigation of illegal dumping by a local hauler of industrial wastes. Lavco, Inc. was incorporated by Mitchell Miller (an attorney previously employed by William A. Lavelle, III) on December 21, 1978, and shortly thereafter, Wm. A. Lavelle & Son, Co. ceased conducting business, all of its contracts for hauling thereafter being performed by Lavco, Inc. William A. Lavelle III, while designated as a mere employee of Lavco, Inc. represented himself to the State of Virginia as President of Lavco, Inc. and also pledged his personal assets in order to obtain loans for Lavco, Inc. from the Scranton National Bank. The documents necessary to secure these loans for Lavco, Inc. were executed by William A. Lavelle, III, as a result of his presentation to the Bank of a "Certified Copy of Resolutions Authorizing Officers to Negotiate Loans", signed by the secretary of the corporation, which provided that Lavco, Inc., at a meeting of the Board of Directors on September 23, 1980, had authorized "William A. Lavelle III, Chairman" to negotiate and effect loans for Lavco. In addition, as has been earlier noted, Lavco indicated to Blue Cross/Blue Shield that Lavco, Inc. was a mere "name change" from Wm. A. Lavelle & Son, Co., and identified itself as a successor corporation to Wm. A. Lavelle & Son, Co. in documents filed with the Pennsylvania Department of Labor & Industry. Further, quarterly tax reports indicate that William A. Lavelle, III, was the only person to receive, as wages, substantial sums of money from Wm. A. Lavelle & Son, Co. and Lavco, Inc.. These records indicate that William A. Lavelle & Son, Co., during the first quarter of *380 1979 paid the following wages to its president, William A. Lavelle, III and its employee, William A. Lavelle, IV: William A. Lavelle, III, claims he has no ownership interest in Lavco, Inc. However, Lavco paid its employee (William A. Lavelle, III) and its president (William A. Lavelle, IV) the following wages during the fourth quarter of 1980: Similarly, Lavco paid the following wages to its "employee" and president, respectively, during the first quarter of 1981:[12] The financial benefits realized by William A. Lavelle, III, from his salary as an employee of Lavco, Inc., when contrasted with the financial benefits realized by the President of the corporation who had an alleged 60% ownership share in the corporation, demonstrate that William A. Lavelle, III was more than a mere employee. We believe the foregoing evidence was, when viewed as a whole, sufficient to establish that William A. Lavelle, III, was, at all relevant times, possessed of an undisclosed ownership interest in Lavco, Inc., and that the sole purpose for the concealment of that ownership interest was to avoid liability for the criminal acts committed by Wm. A. Lavelle & Son, Co. under the direction of William A. Lavelle III. Thus, under both the de facto merger exception and the fraudulent transaction exception to the general rule of corporate non-liability of a transferee corporation, we find that Lavco, Inc. was properly held criminally liable for the *381 acts of its predecessor in interest, William A. Lavelle & Son, Co. It has to be emphasized, however, that our holding here is not a pronunciation of a general rule concerning corporate successor liability or criminal acts of a predecessor corporation for, as our former colleague and eminent President Judge Edmund B. Spaeth, Jr., noted in Martin v. Johns-Manville Corp. supra, "[t]he issue of sufficient degree of identity is one that must be resolved on a case-by-case basis." Id. 322 Pa.Super. at 372 n. 22, 469 A.2d at 667 n. 22. The argument that the prosecution of Lavco, Inc. was barred by the expiration of the two year statute of limitations provided by 42 Pa.C.S. § 5552(a) is rejected as meritless for the reasons set forth above in the appeal of William A. Lavelle, III. Lavco, Inc. also argues that it is entitled to discharge because the trial did not commence until twenty days after expiration of the automatic rundate of Rule 1100. This claim is without merit since the record discloses that the trial court properly granted the Commonwealth's motion for an extension of time within which to commence trial after (1) excluding eleven days of delay attributable to appellant pursuant to an agreement entered into by its then attorney of record, and (2) finding that the delay in commencing trial was not the result of any conduct by the Commonwealth, which had at all times sought an earlier trial date, but rather, had resulted from defense requests for additional time in which to file pre-trial motions due to the complexity of the issues. Lavco argues that the trial court erred in directing that the trials of all three defendants be consolidated. This argument is based upon the misapprehension that consolidation enabled the Commonwealth to "smear Lavco with *382 alleged racketeering acts occuring before Lavco came into existence." First, we are compelled to observe that Lavco, Inc. was found guilty by a judge sitting without a jury. Thus, there was no danger of confusion on the part of a jury. Pa.R.Crim.P. 1127 A(1)(a). Consolidation was clearly proper in that all three defendants had participated "in the same series of acts or transactions constituting ana offense or offenses." Pa.R.Crim.P. 1127 A(2). Commonwealth v. Brunner, 305 Pa.Super. 411, 420-421, 451 A.2d 714, 718-719 (1982); Commonwealth v. Norman, 272 Pa.Super. 300, 304-307, 415 A.2d 898, 901-902 (1979). Second, Lavco, Inc. was not found guilty of committing predicate offenses under the corrupt organization act. Rather, it was found criminally liable for the criminal acts committed by its predecessor in interest, Wm. A. Lavelle & Son, Co. Thus, even had Lavco, Inc. been tried separately, all of the evidence concerning the affairs of William A. Lavelle, III and Wm. A. Lavelle & Son, Co. would have been admitted into evidence as relevant to the issue of the criminal liability of Lavco, Inc. as a successor to Wm. A. Lavelle & Son, Co. The trial court thus properly consolidated the charges against all three defendants for purposes of trial, and Lavco, Inc. suffered no prejudice as a result of consolidation. Lavco, Inc. also argues that certain documents were obtained from its accountant "in violation of the accountant-client privilege provided by 63 P.S. § 9.1." This issue, having been analyzed and correctly rejected in the opinion of the trial court, does not warrant further discussion. Similarly meritless is the assertion that the evidence was insufficient to establish the underlying theft by deception offenses since "a corporation that generates industrial wastes cannot claim to be deceived when it is negligent and breaches its common law and statutory duties with regard to waste disposal." Since the evidence presented by the Commonwealth was certainly sufficient to establish each *383 element of the offenses of theft by deception beyond a reasonable doubt, this argument must be rejected. And, finally, Lavco argues that it is entitled to a new trial because "the investigating grand jury presentment was defective on its face confusing gross income with net income. . . ." The Commonwealth concedes that the presentment of the Statewide Investigating Grand Jury mistakenly identified, at pages 17-18, the gross income of Wm. A. Lavelle & Son, Co. as net income and the net income as gross income. The Commonwealth argues, however, that the error was irrelevant and non-prejudicial and, in any event, any error was cured by subsequent proceedings. The mislabeling of the gross and net income figures in the grand jury presentment did not in any way prejudice Lavco, Inc. Initially, we note that "[t]he inadequacy, incompetency, or illegality of the evidence presented to the grand jury do not constitute grounds for the quashing of an indictment on the basis of such evidence." Commonwealth v. Webster, 462 Pa. 125, 132, 337 A.2d 914, 917 (1975). An investigating grand jury and an indicting grand jury "are separate legal bodies. Although both may have considered the same alleged crimes involving the same individuals, their proceedings, deliberations, and presentments are distinct. Extraneous matters affecting one may not influence the other, and irregularities before one are not always present in the other; the two bodies are unrelated in this respect. Consequently, an indictment by a regular grand jury is not necessarily tainted by some irregularity or improper influence alleged to have affected the investigating grand jury. Commonwealth v. Gross, [172 Pa.Super. 85, 92 A.2d 251 (1952)]. At least, the irregularity or improper influence must be shown to have also affected the indicting grand jury." Commonwealth v. Evans, 190 Pa. Super. 179, 198, 154 A.2d 57, 69 (1959), aff'd., Commonwealth v. Evans, 399 Pa. 387, 160 A.2d 407 (1960), cert. denied, 364 U.S. 899, 81 S. Ct. 233, 5 L. Ed. 2d 194 (1960). *384 Our review of the record compels the conclusion that the transpositional error was not material to the issue before the grand jury and could not have affected either the deliberations of the investigating grand jury, or the indicting grand jury. Appellant has not presented any evidence of an irregularity affecting the investigating grand jury, a document of "little significance".[13] In the absence of such evidence, appellant cannot establish that any irregularity affected the indicting grand jury. Cf. Commonwealth v. Levinson, 480 Pa. 273, 389 A.2d 1062 (1978). Appellant is, therefore, not entitled to the relief requested. See and compare: Commonwealth v. Evans, supra 190 Pa.Super. at 67-68, 154 A.2d at 68-70; Commonwealth v. McKeirnan, 337 Pa.Super. 403, 405-409, 487 A.2d 7, 9-10 (1985); Commonwealth v. Chew, 338 Pa.Super. 472, 479-480, 487 A.2d 1379, 1383 (1985); Commonwealth v. Meoli, 307 Pa. Super. 50, 53, 452 A.2d 1032, 1034 (1982). The judgment of sentence imposed upon William A. Lavelle, III, which is the subject of appeal No. 2928 Philadelphia 1985, is hereby affirmed. The judgment of sentence imposed upon Lavco, Inc., which is the subject of appeal No. 3129 Philadelphia 1985, is hereby affirmed. [1] William A. Lavelle, III, was convicted of conducting the affairs of an enterprise through a pattern of racketeering activities, conduct prohibited by 18 Pa.C.S. § 911(b)(3), and investing income, realized from a pattern of racketeering activity in which he had participated as a principal, in an enterprise, a violation of 18 Pa.C.S. § 911(b)(1). Lavelle was sentenced to serve a term of imprisonment of not less than eighteen months nor more than five years, and to pay a fine of $25,000 and costs of prosecution. [2] Lavco, Inc. was convicted of investing, in an enterprise, income derived from a pattern of racketeering activity in which it had participated as a principal, a violation of 18 Pa.C.S. § 911(b)(1). Lavco, Inc. was sentenced to a fine of $25,000. [3] Wm. A. Lavelle & Son, Co., which has not appealed from the judgment of sentence, was also convicted of violating 18 Pa.C.S. § 911(b)(3) which provides that "[i]t shall be unlawful for any person employed by or associated with any enterprise to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity." Wm. A. Lavelle & Son, Co., a Pennsylvania corporation, was sentenced to pay a fine of $25,000. [4] On May 13, 1982, the Judicial Code was amended and the statute of limitations for violations of the Corrupt Organizations Act was expanded to five years by the Act of May 13, 1982, P.L. 417, No. 122, § 1, 42 Pa.C.S. § 5552(b), effective July 12, 1982. [5] "Racketeering activity" is defined as including, inter alia, any act indictable under Chapter 39 of the Crimes Code (theft and related offenses). See: 18 Pa.C.S. § 911(h)(1). [6] While the opinion of the trial court suggested March of 1979 as the last date upon which appellant William A. Lavelle, III engaged in racketeering activity, the record indicates that the last date upon which appellant received payment for illegal dumping was June 29, 1979. [7] Due to the confused state of the record and the absence of the Commonwealth's exhibits Nos. 101, 102 and 103, we are unable to ascertain many of the exact dates of the various transfers of monies between the defendants. The opinion of the trial court notes that the last transfer of funds between Lavco, Inc. and Wm. A. Lavelle & Son, Co. occurred in February of 1981. Our review of the record discloses that Wm. A. Lavelle & Son, Co. paid, in February of 1981, an insurance bill of $1,270.00 owed by Lavco, Inc. The last "loan" from Wm. A. Lavelle & Son, Co. to William A. Lavelle, III appears to have occurred on October 31, 1979. We have, however, used the date of February 1981 throughout this opinion as the last date of a transfer of funds as we have been unable to discern evidence of any later transfer between any of the defendants. [8] We have been unable to ascertain from the record what event caused the Commonwealth to charge in the indictment that the offense continued "until on or about October 31, 1981." [9] The prosecution is at least inconsistent when it takes the position that, even though the loan is outstanding, once the books of the corporation ceased to reflect the loans as outstanding, the enjoyment of the benefit by appellant ended. [10] If a defendant engaged in racketeering activity for a period of six months and, after ceasing all such activities, used all of the funds realized from his racketeering as a down payment on a home, the argument of the prosecutor would require that a court find that the offense was still continuing 25 years later because the defendant still resided in and continued to enjoy the home which had been purchased in part with funds realized from the racketeering activity. [11] For reasons escaping our comprehension, Wm. A. Lavelle & Son, Co. was not charged with violating 18 Pa.C.S. § 911(b)(1) but, rather, was charged with and convicted of violating Section 911(b)(3). The plain language of the statute requires that the individual defendant or entity be "employed by or associated with" an enterprise and "conduct such enterprise's affairs through a pattern of racketeering activities." (emphasis supplied). The corporation could not have been employed by or associated with itself. See: e.g., Cullen v. Margiotta, 811 F.2d 698, 729 (2nd Cir. 1987); United States v. Benny, 786 F.2d 1410, 1414-1416 (9th Cir. 1986), cert. denied, 479 U.S. 1017, 107 S. Ct. 668, 93 L. Ed. 2d 720 (1986); United States v. DiCaro, 772 F.2d 1314, 1319-1320 (7th Cir. 1985) cert. denied, 475 U.S. 1081, 106 S. Ct. 1458, 89 L. Ed. 2d 716 (1986); Haroco, Inc. v. American National Bank & Trust Co. of Chicago, 747 F.2d 384, 400 (7th Cir. 1984), aff'd. 473 U.S. 606, 105 S. Ct. 3291, 87 L. Ed. 2d 437 (1985); United States v. Computer Sciences Corporation, 689 F.2d 1181, 1190 (4th Cir. 1982), cert. denied, 459 U.S. 1105, 103 S. Ct. 729, 74 L. Ed. 2d 953 (1983). While cases interpreting the federal RICO statute are not controlling in proceedings arising under the corrupt organizations statute, Commonwealth v. Taraschi, 327 Pa.Super. 179, 184 n. 2, 475 A.2d 744, 748 n. 2 (1984), the "employed by or associated with" language of Section 911(b)(3) is identical to the corresponding provisions of the federal Racketeer Influenced and Corrupt Organizations Act. See: 18 U.S.C. § 1962(c). [12] While the wages paid fluctuated with each quarter not set forth above, the unusual ratios, whereby the president and alleged 60% owner of Lavco, Inc. received a small fraction of the salary received by the "mere employee", did not change. [13] In re County Investigating Grand Jury of April 24, 1981, 500 Pa. 557, 563, 459 A.2d 304, 307 (1983).