Opinion ID: 2967649
Heading Depth: 4
Heading Rank: 5

Heading: Count 23: RICO

Text: The government charged Tri-City and Najjar with a violation of RICO in the indictment as follows: At all times material to this Indictment, defendant BASEM NAJJAR, CLINTON AUTO SALES (a sole proprietorship which employed numerous individuals other than defendant BASEM NAJJAR), defendant TRI-CITY and other persons known and unknown and to the Grand Jury, were an association in fact and constituted an enterprise as that term is defined in Title 18, United States Code, Section 1961(4), that is, a group of individuals and entities associated in fact, which was engaged in and the activities of which affected interstate and foreign commerce. Tri-City, however, attacks the RICO5 conviction by arguing that the government failed to prove the existence of an enterprise and a pattern of racketeering activity. On the latter element, Tri-City argues that there was no common purpose between Najjar and TriCity, and further that there was no structure to the enterprise, only Najjar’s separate interests. Specifically, Tri-City complains that it is improper to put two hats on Najjar, one as an employee of Tri-City, and the other as an individual, in order to show an enterprise and common purpose. We find Tri-City’s arguments here to be without merit and affirm the conviction. First, principles of corporate liability apply in the RICO context. 5 18 U.S.C. § 1962 provides: It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt. 18 U.S.C. § 1962(c). UNITED STATES v. NAJJAR 25 An enterprise in the context of RICO 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. § 1961(4); cf. Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158 (2001). The Supreme Court has stated in this context, [w]hether the Act seeks to prevent a person from victimizing, say, a small business . . . or to prevent a person from using a corporation for criminal purposes . . . the person and the victim, or the person and the tool, are different entities, not the same. Cedric Kushner Promotions, 533 U.S. at 162. A certain degree of distinctness is required for RICO liability; however, where a corporate employee acting within the scope of his authority . . . conducts the corporation’s affairs in a RICO-forbidden way, the only separateness required is that the corporate owner/employee be a natural person and so legally distinct from the corporation itself. Cedric Kushner, 533 U.S. at 163. Thus, there were two distinct entities in this case sufficient for liability under 18 U.S.C. § 1962(c): (1) a person, Basem Najjar, and (2) a corporation, Tri-City Auto Outlet, Inc. For the same reason, Tri-City’s argument, that the common purpose prong was not proven, fails. Najjar, as we have discussed above, was not acting solely on his own behalf, but on behalf of, and with and intent to benefit, Tri-City Auto Outlet. Both Najjar and Tri-City, through Najjar’s agency, sought to further the illegal scheme and so had the requisite common purpose. Furthermore, there was evidence that tended to show at least one other member of Najjar’s family, the President of Tri-City, Firyal Najjar, Basem’s mother, had knowledge of Najjar’s illicit activities and did not seek to halt it. Accordingly, we are of opinion that the jury could reasonably have concluded that TriCity was guilty of a RICO violation beyond a reasonable doubt.