Opinion ID: 503414
Heading Depth: 2
Heading Rank: 2

Heading: The Indictment Properly Charged an Association-in-Fact

Text: 35 Appellants claim that the indictment improperly charged an association-in-fact composed of individuals, corporations, and partnerships. As none of the appellants objected at trial to the wording of the indictment, we review the claim under the plain-error standard. Jackson v. United States, 359 F.2d 260, 265 (D.C.Cir.) (plain-error rule applies to defects in indictment), cert. denied, 385 U.S. 877, 87 S.Ct. 157, 17 L.Ed.2d 104 (1966). 36 Under RICO,  'enterprise' includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity. 18 U.S.C. Sec. 1961(4) (1982). Appellants claim that the government must choose between charging an individual, partnership, or corporation, on the one hand, and an association-in-fact on the other hand. Appellants argue that the indictment in this case was fatally flawed because it charged individuals, corporations, and partnerships associated in fact. The relevant portion of the indictment is reproduced supra at 351 n. 12. 37 We are unpersuaded. The statute defines enterprise as including the various entities specified; the list of entities is not meant to be exhaustive. There is no restriction upon the associations embraced by the definition.... United States v. Turkette, 452 U.S. 576, 580, 101 S.Ct. 2524, 2527, 69 L.Ed.2d 246 (1981). On the contrary, Congress has instructed us to construe RICO liberally ... to effectuate its remedial purposes. Pub.L. No. 91-452, Sec. 904(a), 84 Stat. 922, 947 (1970) (reprinted in note following 18 U.S.C. Sec. 1961), quoted in Turkette, 452 U.S. at 587, 101 S.Ct. at 2530; accord Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 497-98, 105 S.Ct. 3275, 3286, 87 L.Ed.2d 346 (1985). Appellants' restrictive interpretation of the definition of enterprise would contravene this principle of statutory construction. 38 Appellants' reading of section 1961(4) would lead to the bizarre result that only criminals who failed to form corporate shells to aid their illicit schemes could be reached by RICO. This interpretation hardly accords with Congress' remedial purposes: to design RICO as a weapon against the sophisticated racketeer as well as (and perhaps more than) the artless. See United States v. Huber, 603 F.2d 387, 394 (2d Cir.1979), cert. denied, 445 U.S. 927, 100 S.Ct. 1312, 63 L.Ed.2d 759 (1980); see also McCullough v. Suter, 757 F.2d 142, 143-44 (7th Cir.1985) (we do not suppose that 'Murder Inc.' was really a corporation; and we cannot believe that Congress would have wanted gangsters [associated in fact] to be able to escape the clutches of section 1962(c) just by avoiding the corporate form). 39 We therefore follow those courts that have held that individuals, corporations, and other entities may constitute an association-in-fact. See United States v. Thevis, 665 F.2d 616, 625-26 (5th Cir. Unit B), cert. denied, 456 U.S. 1008, 102 S.Ct. 2300, 73 L.Ed.2d 1303 (1982); see also United States v. Navarro-Ordas, 770 F.2d 959, 969 n. 19 (11th Cir.1985) (group of corporations may constitute association-in-fact), cert. denied, 475 U.S. 1016, 106 S.Ct. 1200, 89 L.Ed.2d 313 (1986); McCullough, 757 F.2d at 143-44 (sole proprietorship and employees may constitute association-in-fact); United States v. Aimone, 715 F.2d 822, 828 (3d Cir.1983) (individuals and corporations may constitute association-in-fact), cert. denied, 468 U.S. 1217, 104 S.Ct. 3585, 82 L.Ed.2d 883 (1984); Bunker Ramo Corp. v. United Business Forms, Inc., 713 F.2d 1272, 1285 (7th Cir.1983) (enterprise includes all enumerated entities and any combination of them); Huber, 603 F.2d at 394 (group of corporations may constitute association-in-fact). 40 Appellant Perholtz makes the further claim that the indictment named him both as a part of the enterprise and as a defendant, in contravention of the requirement that the person be separate from the enterprise with which he is associated under 18 U.S.C. Sec. 1962(c) (1982). See Yellow Bus Lines, Inc. v. Drivers, Chauffeurs & Helpers Local Union 639, 839 F.2d 782, 789-92 (D.C.Cir.1988). We have no occasion to consider the separateness requirement, however, because the indictment does not run afoul of this principle. The indictment charged that Perholtz, along with other individuals and corporations, formed an enterprise, i.e., an association-in-fact. The indictment further alleged that Perholtz participated in the conduct of the enterprise by his various actions in furtherance of its common objectives. This case thus is significantly different from the cases relied upon by Perholtz, e.g., Bennett v. United States Trust Co., 770 F.2d 308, 314-15 (2d Cir.1985), cert. denied, 474 U.S. 1058, 106 S.Ct. 800, 88 L.Ed.2d 776 (1986), holding that a corporation cannot be both the enterprise and the defendant under section 1962(c) because it cannot associate with itself. The indictment did not allege that Perholtz associated with himself, but that he associated with others. That is the very meaning of an association -in-fact. Cf. United States v. Benny, 786 F.2d 1410, 1415-16 (9th Cir.) (defendant may be charged as member of association-in-fact or as participant in conduct of own sole proprietorship provided it has employees), cert. denied, --- U.S. ----, 107 S.Ct. 668, 93 L.Ed.2d 720 (1986); McCullough, 757 F.2d at 143-44 (same). Nor were Perholtz and the other members of the enterprise merely subdivisions, agents, or members of the defendant organization. Yellow Bus, 839 F.2d at 791. The individual defendants joined with each other and formed the corporations to further their common objectives. This relationship of individuals and corporations is precisely what section 1962(c) was designed to attack. 41