Case Name: STATE of Minnesota, Respondent, v. Trong Kim HUYNH, Petitioner, Appellant
Court: Minnesota Supreme Court
Jurisdiction: Minnesota
Decision Date: 1994-06-30
Citations: 519 N.W.2d 191
Docket Number: No. C6-92-1935
Parties: STATE of Minnesota, Respondent, v. Trong Kim HUYNH, Petitioner, Appellant.
Judges: 
Reporter: North Western Reporter 2d
Volume: 519
Pages: 191–201

Head Matter:
STATE of Minnesota, Respondent, v. Trong Kim HUYNH, Petitioner, Appellant.
No. C6-92-1935.
Supreme Court of Minnesota.
June 30, 1994.
Rehearing Denied Aug. 11, 1994.
John M. Stuart, State Public Defender, Lawrence Hammerling, Deputy State Public Defender, Minneapolis, for appellant.
Hubert H. Humphrey, III, Atty. Gen., St. Paul, and Michael 0. Freeman, Hennepin County Atty., Paul R. Scoggin, Asst. County Atty., Minneapolis, for respondent.

Opinion:
OPINION
SIMONETT, Justice.
In this case we consider what constitutes an "enterprise" under Minn.Stat. § 609.903, subd. .1(1) (1992), known as Minnesota's Racketeer Influenced and Corrupt Organizations Act (RICO). We affirm defendant's conviction for racketeering, and we also affirm the trial court's ranking the offense of racketeering at severity level VIII for sentencing purposes.
The victim in this case, Hung Huynh (no relation to the defendant), came to the United States from Vietnam in 1979. He and his wife opened a restaurant in Golden Valley. In August 1990, defendant-appellant Trong Kim Huynh and three other men appeared at the restaurant and told Hung Huynh that he must pay them $1,500 a month, beginning on September 10, or "they" would kill him and his family. Defendant told Hung to pay with a money order made out to "Bin Tong Trong" and to write on the money order the words "lost football." Hung did not know anyone named Bin Tong Trong and he did not have any gambling debts. Hung recorded the license number of the car in which the four men drove away.
A few days before September 10, Hung received a telephone call. The caller identified himself as a member of an Asian gang and told Hung that if he did not make the payment the "gang" would kill him and his family. On September 10, 1990, Hung made his first payment of $1,500 by personal check payable to "Truong Binh Tong," giving the check to his restaurant employee, Phuong Phan, for delivery to defendant. At trial, Phan testified that on three occasions defendant Huynh came to the restaurant and she gave him the payment. On each occasion, defendant entered the restaurant alone, but more than once Phan saw three other people leave with Huynh in the car.
On October 10, 1990, defendant Huynh picked up a second personal check for $1,500. On November 8 or 9, defendant called Hung and told him to pay by money order. When defendant came to the restaurant on November 13, Hung told defendant he could not afford to pay $1,500 and offered defendant a money order for $1,000. Defendant left the restaurant for 5 or 10 minutes and then returned and accepted the money order, made out to Tong Bin Trong and similarly bearing the words "lost football."
Again in December and in January Hung received a call from defendant Huynh and handed over a $1,000 money order each time. On February 8, 1991, after receiving a call from defendant, Hung informed the Golden Valley police about the threats and payments. The police set up surveillance and on February 13 arrested Son Thanh Tran, who had come to the restaurant to pick up the payment. Tran told police in a post-arrest interview that "a party he knew as Trong" (one of the aliases used by defendant Huynh) had called him from California, asked him to pick up the monthly payment, and said someone would get the payment from him later.Tran was granted immunity, but at trial his memory "failed," and he. testified he did not know defendant and could not recall the name of the person who called him from California.
The license number written down by Hung was traced to a vehicle owned by Lam Phuong Tran. She testified that she and defendant had been living together, and that defendant, who was unemployed, would often use her ear. She also testified that defendant received $700 a month but that he did not tell her what the money was for or from whom he received it.
An FBI agent investigated the check cash-ings. One of the checks passed through a Vietnamese grocery store owned by Thong Hoi Quach in Houston, Texas. The agent interviewed Trong Bin Tong, who owned another grocery store in Houston, and testified that the signature on Tong's driver's license was very similar to the endorsement on the checks. An officer at First Bank Minneapolis identified the personal checks written on Hung's account and payable to "Truong Binh Tong." The first of these, for $1,500 with the notation "lost football," was presented on September 27, 1990, at Common Law Federal of Houston, Texas, possibly by a third party to whom the cheek was signed over. The second check, for the same amount and with the same notation, was endorsed over to the Vietnam Saigon Supermarket, which presented it for payment in October 1990 at Texas First National of Houston.
A representative of Travelers Express Company testified about the three First Bank money orders for $1,000 made out to "Truong Binh Tong." The first, dated November 13, 1990, was signed over to Fullton Seafood and then deposited in a Texas bank. The second, dated December 10, 1990, was signed over to Domino Bi-Da Sports Bar and deposited in a Texas bank. The third,' dated January 10,1991, was endorsed "Paitoon Va-napha" and presented at a Texas bank.
Finally, an investigator with the Hennepin County Attorney's Office testified as an expert on money laundering. He stated that money orders are preferred to personal cheeks because they are less traceable, easily transferred, and can be cashed just about anywhere, usually without a request for identification. Given a hypothetical in which an individual is told to get money orders all payable to the same payee, which are then endorsed by various entities and deposited into different accounts, the investigator stated this would be basic money laundering.
The defense presented no witnesses.
Defendant Huynh was convicted of five counts of coercion under Minn.Stat. § 609.27, subd. 1(1) (1992) and one count of racketeering under Minn.Stat. § 609.903, subd. 1(1). The trial court sentenced defendant to concurrent terms, for a maximum 146-month commitment to the Commissioner of Corrections. Defendant appealed the racketeering conviction, but the court of appeals, one judge dissenting, affirmed the conviction. As to the sentencing, the court of appeals agreed with the trial court's ranking of racketeering at a severity level VIII but remanded for resentencing, ruling the trial court should not have used the Hernandez method of calculating the criminal history score. State v. Huynh, 504 N.W.2d 477 (Minn.App. 1993). We granted defendant's petition for further review.
I.
Defendant argues that "as a matter of law" the evidence fails to prove beyond a reasonable doubt the commission of a racketeering offense. Discussion of this issue raises, first, a question of law as to the elements that must be proved to constitute a racketeering "enterprise."
A person is guilty of racketeering if the person is "employed by or associated with an enterprise and intentionally conducts or participates in the affairs of the enterprise by participating in a pattern of criminal activity." Minn.Stat. § 609.903, subd. 1(1).
Our attention in this case is on what constitutes an "enterprise." The statute defines an enterprise as "a sole proprietorship, partnership, corporation, trust, or other legal entity, or a union, governmental .entity, association, or group of persons, associated in fact although not a legal entity, and includes illicit as well as legitimate enterprises." Minn.Stat. § 609.902, subd. 3 (1992). Minnesota's RICO statute is much like the federal RICO law; consequently, in construing our statute it is helpful to consider the federal courts' interpretation of the federal Act. While both the federal and state RICO statutes define "enterprise" simply as a particular type of entity (such as a corporation or association in fact), federal case law supplements this definition by identifying certain characteristics the entity must have.
The leading decision is United States v. Turkette, 452 U.S. 576, 101 S.Ct. 2524, 69 L.Ed.2d 246 (1981). There the United States Supreme Court ruled that the existence of an "enterprise" and the "pattern of criminal activity" are two separate elements to be proven. Id. at 583, 101 S.Ct. at 2528. An enterprise, according to Turkette, requires proof that a group of persons is associated together as an "ongoing organization"; the "pattern of racketeering activity," on the other hand, requires a series of criminal predicate acts. Id. Proof of these two elements, said the Court in Turkette, may at times "coalesce," ie., in some cases the same proof may be used to prove both elements. Id.
The federal courts of appeal, however, have disagreed on whether, in addition to an ongoing organization and a pattern of racketeering activity, a further element is required to prove an enterprise. Some federal courts say only the two elements need be proven because that is all the statute requires. Indeed, because proof of the two elements tends to coalesce, it has been said that an enterprise is, "in effect, no more than the sum of the predicate racketeering acts." United States v. Bagaric, 706 F.2d 42 (2d Cir.), cert. denied, 464 U.S. 840, 104 S.Ct. 133, 78 L.Ed.2d 128 (1983). Other federal courts, including the Eighth Circuit, have concluded otherwise. See generally David Vitter, Comment, The RICO Enterprise as Distinct from the Pattern of Racketeering Activity: Clarifying the Minority View, 62 Tul.L.Rev. 1419, 1424-29 (1988) (setting out the split in federal case law).
In United States v. Bledsoe, 674 F.2d 647, 664 (8th Cir.), cert. denied, 459 U.S. 1040, 103 S.Ct. 456, 74 L.Ed.2d 608 (1982), the Eighth Circuit reasoned that a RICO enterprise "cannot simply be the undertaking of the acts of racketeering, neither can it be the minimal association which surrounds these acts." Something more is needed. Otherwise, every time two individuals commit several criminal acts there would be an offense of racketeering. Id. Therefore, said Bledsoe, "the inclusion of the enterprise element requires proof of some structure separate from the racketeering activity and distinct from the organization which is necessarily incident to the racketeering Id. More recently, in United States v. Kragness, 830 F.2d 842, 855 (8th Cir.1987), the Eighth Circuit set out a three-part test for a RICO enterprise, requiring a common purpose, continuity, and "an ascertainable structure distinct from that inherent in the conduct of a pattern of racketeering activity."
The State takes the position that there is no need for a Bledsoe-type "distinct structure" requirement. As we understand it, the State's argument is that if the enterprise involves a legal entity, such as a partnership or corporation, the legal entity serves as a "distinct structure" differentiating the criminal enterprise from the criminal acts it commits. See Kragness, 830 F.2d at 855 n. 10. On the other hand, when the enterprise "is wholly criminal," then, argues the State, "the facts used to support the predicate offenses may be the same as the facts used to prove the existence of the enterprise"; and so, in such a case, a "distinct structure" is unnecessary, even if the enterprise is only an association-in-fact.
This reasoning is not without merit, except for the fact that the commission of criminal acts will always involve some organizational enterprise on the part of the participants. If this minimal cooperative effort is all that is required for the existence of an enterprise, then the RICO offense collapses into nothing more than the enhanced punishment of recidivists. To avoid this collapse, we think there must be some requirement focusing the statute on "organized crime" and excluding ordinary, run-of-the-mill criminal activity.
The legislative history of Minnesota's RICO law sheds, at best, a flickering light on the meaning of "enterprise." Clearly, our statute is not limited to drug "kingpins" or major crime syndicates, but neither do we think our Act is intended to make a racketeer out of every criminal offender. It is highly relevant that the penalty imposed by our state legislature for a RICO conviction is up to 20 years in prison and a fine up to $1 million. Minn.Stat. § 609.904, subd. 1 (1992). The statute also provides for injunctive relief, restitution, and an alternate fine amounting to three times the loss caused or illegitimate profits gained, id., as well as criminal forfeiture, Minn.Stat. § 609.905.
To repeat, the State claims that the facts for proving the predicate offenses are the same facts that prove the existence of an illicit enterprise. This is not entirely true. To prove the offense of racketeering, not only must the State prove certain predicate criminal acts, but it must also prove a "pattern of criminal activity," and this pattern involves more than just the predicate criminal acts. The "pattern of criminal activity" (or "pattern of racketeering" under the federal Act) has its own separate statutory definition. And, significantly, the definition of "pattern" under the state Act spells out requirements that are not spelled out in the federal Act.
Under the federal RICO law, a "pattern of racketeering" is defined simply as requiring at least two acts of racketeering activity within a certain time frame. See 18 U.S.C. § 1961(5) (1988). Under the Minnesota statute, a "pattern of criminal activity" not only requires the requisite number of criminal acts (three or more) within a specified time frame, but specifies (1) that the criminal acts must neither be isolated incidents nor the equivalent of a single offense, and (2) that the criminal acts be related "through a common scheme or plan or a shared criminal purpose," or be committed, solicited or aided by persons mentally culpable for the crimes and associated with or in an enterprise involved in those activities.
If the purpose of the Bledsoe, "distinct structure" requirement is to avoid casting too wide a net and catching the unorganized criminal, then, it seems to us, the definition of "pattern of criminal activity" spelled out in our state's RICO Act in large part accomplishes this purpose. Isolated, sporadic criminal acts do not count. The criminal acts must be related through a common plan or shared purpose, or alternatively, must be committed or promoted by persons associated with the enterprise.
It is when the enterprise is an "association-in-fact" that the Bledsoe concerns become most prominent. In this situation, there is no legal entity identifiable as an organizational structure. The group or association is likely loosely structured and quite informal, and hard evidence of a business-like organization is difficult to come by. It is here that the danger of RICO being expanded into an enhancement statute for recidivists is greatest. This danger can be obviated, we think, if it is shown that there is an organizational set-up, whether formal or informal, that not only exists to commit the predicate acts but also does more, such as coordinating those acts into an overall pattern of criminal activity.
It is enough here, we believe, after reviewing the cases and comments on the federal Act, that we conclude an "enterprise" under Minnesota's RICO Act is characterized by—
1) a common purpose among the individuals associated with the enterprise; where
2) the organization is ongoing and continuing, with its members functioning under some sort of decisionmaking arrangement or structure; and where
3) the activities of the organization extend beyond the commission of the underlying criminal acts either to coordinate the underlying criminal acts into a pattern of criminal activity or to engage in other activities.
In the trial of this case, the trial court instructed the jury on the pertinent sections of our RICO Act, but generally, henceforth, the jury should also be instructed on the characterizations of an enterprise listed above.
II.
We now review the evidence in light of the foregoing analysis.
In this case, the State claims the enterprise involved was an "association-in-faet." It is undisputed that the five convictions for coercion are proper predicate criminal acts that occurred during the proper time frame. Defendant claims, however, that as a matter of law there was no "enterprise."
Defendant concedes that he and his associates had "a common purpose," namely to extort money from the restaurant owner. This satisfies the first requirement.
The second requirement is an organization that is ongoing and continuing. In other words, there must be some continuity of structure and personnel. This requirement is also met. The extortion extended over a period of 6 months until exposed. Defendant would come to the restaurant accompanied usually by three other persons who stayed in the ear. The victim was told over the telephone that if he did not make the payments demanded by the defendant, the gang would kill him and his family. There was a regular, business-like monthly payment and collection schedule, with the payment usually preceded by a telephone call from the defendant. The victim was instructed on how payment was to be made. All of the instruments were made out to the same individual in Texas, and all passed through various Texas businesses and financial institutions. A reduction in the amount of the monthly payment was allowed by the defendant, but only after he went outside the restaurant for several minutes, from which the jury could have inferred that fixing the amount of the extortion payments required conferring with associates. For the last payment, defendant arranged for a substitute to make the pickup. The substitute's "failed" memory at trial suggests the organization had means of enforcing discipline. Defendant received $700 a month, which, since he was unemployed, the jury could have inferred was for services rendered "the gang."
It is the third requirement that presents the closest question. Did the organization's activities extend beyond that required for the commission of the underlying criminal acts? We conclude the third requirement has been met. Here the "association-in-fact" was organized to do more than commit acts of extortion. The group's organized activities extended to routing the extorted monies through different banking institutions and different endorsees in another state.
Defendant and the dissent argue that this systematic money laundering was done in furtherance of the underlying coercion offenses. This may be so, but it was not necessary to the commission of the underlying criminal acts. The defendant could have demanded payments in cash or could have cashed the money orders in-state, rather than routing them through Texas. Cf. Diamonds Plus, Inc. v. Kolber, 960 F.2d 765 (8th Cir.1992) (part of the scam involved use of the defendant's law office to handle inquiries from fraud victims; held to show an ascertainable structure).
What we have here is an organized group extorting protection money from a restaurateur, a rather common form of racketeering, but where it is difficult to get evidence of the organizational framework of the criminal enterprise. Nevertheless, we find that the evidence presented by the State, together with the inferences the jury could draw therefrom, is sufficient beyond a reasonable doubt to sustain the RICO conviction.
III.
The court of appeals held that the trial court could impose sentences for both racketeering and the separate crimes eonsti- tuting the predicate acts. Defendant does not appeal this ruling. The court of appeals also held that the trial court may not use the Hernandez method of calculating a defendant's criminal history score unless sentencing for multiple crimes is permitted under Minn.Stat. § 609.035 (1992); thus, the appellate panel stated the trial court should have sentenced defendant first for the racketeering offense, and the panel therefore remanded for resentencing. The State does not appeal this ruling. Finally, the court of appeals held that ranking racketeering at severity level VIII is appropriate. Huynh, 504 N.W.2d at 484-85. Defendant appeals this ruling.
In sentencing defendant, the trial judge observed that defendant's crime involved serious gang activity that went on for a long period of time. It involved guns, money laundering, and the threat of murder, not only of the victim but of the victim's family. This organized preying upon vulnerable people, the judge concluded, justified a severity level VIII ranking.
We hold that this sentence was within the trial court's discretion. Because racketeering is an offense separately defined by the legislature and not ranked in the Minnesota Sentencing Guidelines, ranking is left to the discretion of the trial court. Minnesota Sentencing Guidelines II.A.03 comment, II.A.05 comment. As the court of appeals noted, the penalties for racketeering are similar to the penalties for offenses ranked by the Guidelines as severity level VIII offenses, such as first degree assault. Compare Minn.Stat. § 609.904, subd. 1 (penalty for racketeering may not be more than 20 years imprisonment, fine of $1,000,000, or both) with Minn. Stat. § 609.221 (penalty for assault in the first degree may not be more than 20 years imprisonment, fine of $30,000, or both). See also Minnesota Sentencing Guidelines IV. The legislature clearly intended to punish severely those persons who engage in racketeering.
We affirm the court of appeals, including the remand to the district court on the resen-tencing matter.
Affirmed.
. Minn.Stat, § 609.27, subd. 1(1) (1992) provides that one is guilty of coercion when one "causes another against the other's will to do any act or forbear doing a lawful act" by making a "threat to unlawfully inflict bodily harm upon, or hold in confinement, the person threatened or another, when robbery or attempt to rob is not committed thereby."
. State v. Hernandez, 311 N.W.2d 478 (Minn.1981).
. "Enterprise" is defined by 18 U.S.C. § 1961(4) (1988) as including "any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity."
. For example, in a subcommittee meeting Senator Merriam asked witness Stephen Kilgriff, an assistant attorney general speaking on behalf of the proposed legislation, whether the definition of enterprise would include any common undertaking of two or more people. The witness, after noting that RICO covered any "structural organization" or association-in-fact, went on to say:
Case law on this would indicate that you must have a structure, that it cannot be just a group of people acting — what that is, is just a conspiracy; but you must have a hierarchy. You must have people telling people what to do. You must have, in a legitimate enterprise, of course they have titles. In an illegitimate enterprise, such as a gang, they oftentimes have titles but not necessarily. So you're correct that the definition is broad, but it also, it's clear that it does need a structure, and it is the type of sophistication that the law is trying to get at.
Hearing on S.F. 483, Sen.Judic.Comm., Crim. Law Div., 76th Minn.Leg., March 31, 1989 (audio tape).
. In 1985, an ABA Committee issued a report on the federal RICO Act. American Bar Ass'n, Criminal Justice Section, A Comprehensive Perspective on Civil and Criminal RICO Legislation and Litigation (April 1985). This report recommends that state legislatures substitute the phrase criminal activity for the "pejorative" federal phrase racketeering activity, because RICO may apply to kinds of "criminal conduct unrelated to traditional notions of organized crime." Id. app. A at 4. It appears the drafters of Minnesota's RICO Act adopted this recommendation. The ABA Report, it might also be noted, expresses concern that RICO not be applied to situations where its severe strictures are not warranted. Id. at 24-26 (commentary to Model RICO Act).
. Minn.Stat. § 609.902, subd. 6, reads in its entirety:
"Pattern of criminal activity" means conduct constituting three or more criminal acts that:
(1) were committed within ten years of the commencement of the criminal proceeding;
(2) are neither isolated incidents, nor so closely related and connected in point of time or circumstance of commission as to constitute a single criminal offense; and
(3) were either: (i) related to one another through a common scheme or plan or a shared criminal purpose or (ii) committed, solicited, requested, importuned, or intentionally aided by persons acting with the mental culpability required for the commission of the criminal acts and associated with or in an enterprise involved in those activities.
. These three characteristics of an "enterprise" are derived from Eighth Circuit case law. The first two characteristics are a "common or shared purpose" and "continuity of structure." See United States v. Kragness, 830 F.2d 842, 855 (8th Cir.1987); United States v. Bledsoe, 674 F.2d 647, 665 (8th Cir.1982). Under our formulation of the enterprise's profile, "continuity" is explained and described as evidenced by an ongoing decisionmaking organization or structure. The third requirement explains that this organization or structure must do more than just commit the predicate crimes; it must either coordinate the criminal acts into a pattern (as "pattern" is defined under our state RICO Act), or the organization must engage in other activities. This assures an entity distinct from the predicate crimes. Sporadic criminal acts are not enough.
The dissent points out that the third "prong" of our enterprise formulation does not mention an "ascertainable structure," i.e., a structure "distinct from that inherent in the conduct of a pattern of racketeering." Kragness, 830 F.2d at 855; Bledsoe, 674 F.2d at 665. We have, however, couched our third characteristic in terms of the Eighth Circuit's own explanation of what it means by an "ascertainable structure." In Diamonds Plus, Inc. v. Kolber, 960 F.2d 765, 770 (8th Cir.1992), the Eighth Circuit explained that the focus of the "distinct structure" inquiry is on "whether the enterprise encompasses more than what is necessary to commit the predicate RICO offense." See also Bledsoe, 674 F.2d at 665 (distinct structure can be shown by "an organizational pattern or system of authority beyond what was necessary to perpetuate the predicate crimes").
The term "enterprise" under RICO is one of those subjects that the more it is explained — at least in the abstract — the more elusive it becomes, and there is the danger of paraphrasing the term to death. Thus we have tried to keep our basic formulation simple and functional. It should be remembered that our state act already defines the term "enterprise," and this supplemental formulation is intended to assure that that "enterprise" is not simplistically equated with the sum of its predicate crimes, even though, as Turkette observes, evidence of the two concepts may at times "coalesce." See 452 U.S. at 583, 101 S.Ct. at 2528.