Opinion ID: 660188
Heading Depth: 2
Heading Rank: 1

Heading: failure to establish a rico enterprise

Text: 12 The appellants argue that the evidence was insufficient to support their convictions for violations of 18 U.S.C. Sec. 1962(c) and (d), because the government failed to establish the existence of a RICO enterprise. 4 Section 1962(c) prohibits any person employed by or associated with any enterprise affecting interstate or foreign commerce from conducting or participating in the conduct of such enterprise's affairs through a pattern of racketeering activity. Section 1962(d) makes it unlawful to conspire to violate Section 1962(c) or the other substantive provisions of RICO. 13 RICO defines an enterprise as 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). In United States v. Turkette, 452 U.S. 576, 583, 101 S.Ct. 2524, 2528-29, 69 L.Ed.2d 246 (1981), the Supreme Court stated that an enterprise is an entity separate and apart from the pattern of activity in which it engages, and that it is proved by evidence of an ongoing organization, formal or informal, and by evidence that the various associates function as a continuing unit. In United States v. Riccobene, 709 F.2d 214, 222 (3d Cir.), cert. denied, 464 U.S. 849, 104 S.Ct. 157, 78 L.Ed.2d 145 (1983), we construed Turkette to require proof of each of the three sub-elements referred to by the Court in this passage: (1) proof of an ongoing organization, (2) proof that the associates function as a continuing unit, and (3) proof that the enterprise is an entity separate and apart from the pattern of activity in which it engages. United States v. Pelullo, 964 F.2d 193, 211 (3d Cir.1992) (citing Riccobene, 709 F.2d at 221-24). Thus, although the proof used to establish the existence of an enterprise and a pattern of racketeering may in particular cases coalesce, proof of a pattern of racketeering activity does not necessarily establish the existence of an enterprise. Id. 5 14 In this case, the government alleged that the RICO enterprise was an association in fact composed of the law firm and Markoff's medical practice and designed to enrich its members through the pursuit of personal injury business. Govt. Br. at 13. The appellants argue, however, that the evidence did not demonstrate (1) that there was any kind of organizational structure for decisionmaking, (2) that the appellants associated together on more than an ad hoc basis, or (3) that the enterprise existed separate and apart from the racketeering activity alleged. Markoff Br. at 9, 12. Thus, according to the appellants, [a]ll that was shown was that the medical practice and the lawyer's office combined to commit mail fraud on an ad hoc basis. Id. at 12. 15 The existence vel non of a RICO enterprise is a question of fact for the jury. Riccobene, 709 F.2d at 222. In this case, both the jury that convicted Markoff of RICO violations (Trial I), and the jury that convicted Console and Curcio of RICO violations (Trial II) determined that the government established the existence of the RICO enterprise beyond a reasonable doubt. We must sustain these determinations if there is substantial evidence, taking the view most favorable to the Government, to support [them]. Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680 (1942); see United States v. Pungitore, 910 F.2d 1084, 1129 (3d Cir.1990) (citing Burks v. United States, 437 U.S. 1, 16, 98 S.Ct. 2141, 2150, 57 L.Ed.2d 1 (1978); United States v. Leon, 739 F.2d 885, 890 (3d Cir.1984)), cert. denied, --- U.S. ----, 111 S.Ct. 2009, 114 L.Ed.2d 98 (1991). Thus, we must review the evidence introduced at trial, drawing all reasonable inferences in favor of the prosecution, to determine whether there is substantial evidence to support the existence of a RICO enterprise. 16 As we stated in Riccobene, 709 F.2d at 222, [e]ach of the [three] elements enumerated by the Supreme Court describes a separate aspect of the life of the enterprise. The first element requires proof of an ongoing organization. Turkette, 452 U.S. at 583, 101 S.Ct. at 2528. 17 To satisfy this element, the government must show that some sort of structure exists within the group for the making of decisions, whether it be hierarchical or consensual. There must be some mechanism for controlling and directing the affairs of the group on an ongoing, rather than an ad hoc, basis. 18 Riccobene, 709 F.2d at 222. The government introduced ample evidence at both trials of the existence of an organizational structure within the Law Firm-Markoff Enterprise. The evidence indicates that Markoff and Console met in the early 1980's. Govt.App. at 309 (Trial II); 798 (Trial I). At that meeting, Markoff agreed to inflate the bills of the law firm's clients in exchange for continued patient referrals from the firm. Id. at 310-13 (Trial II); 791-98 (Trial I). Following this meeting, Console and Markoff supervised the execution of this agreement. Id. at 50-66, 313-15, 410-413, 432-92 (Trial II); 790-876 (Trial I). Under Markoff's supervision, his employees falsified patient bills and charts to meet the specifications communicated by Console, LiVolsi and various employees of the firm. Govt.App. at 31-66, 432-92 (Trial II); 730-67, 826-35, 849-60, 869-75, 877-87 (Trial I). Under Console's direction, attorneys referred clients to Markoff, specified the dates and charges that should be reflected on their bills, and coached clients to make false statements regarding the extent of their medical treatment to support fraudulent insurance claims. Govt.App. at 204-39, 432-92 (Trial II); 791-99, 817, 826-34, 849-60, 869-75, 888-98 (Trial I). Thus, at each trial the government established the existence of an ongoing organization, the first element required to prove the existence of a RICO enterprise. 19 The second element of the Supreme Court's definition of a RICO enterprise requires proof that the various associates function as a continuing unit. Turkette, 452 U.S. at 583, 101 S.Ct. at 2528. To satisfy this element, the government must demonstrate that each person perform[ed] a role in the group consistent with the organizational structure established by the first element and which furthers the activities of the organization. Riccobene, 709 F.2d at 223. The government also introduced sufficient evidence to satisfy this requirement at each of the trials. 20 The evidence indicates that between 1981 and 1985, Console, Markoff, Curcio, LiVolsi, and various employees of the firm and the Markoff practice each performed roles within the enterprise structure and through their roles advanced the scheme to defraud insurance companies through the submission of falsified records, inflated bills, and false statements by patients. Console and Markoff devised the scheme and directed its execution. Govt.App. at 38-39, 47-55, 58-65, 310-315, 432-92 (Trial II); 791-99, 817-34, 846-60, 869-75, 877-98 (Trial I). Curcio referred clients to Markoff and coached them to make false statements regarding their medical treatment. Id. at 204-39 (Trial II); 888-98 (Trial I). LiVolsi met with Markoff and his employee in charge of billing to communicate the dates and charges that should be reflected on patient bills. Id. at 39-50, 462-70 (Trial II); 826-34, 847-51 (Trial I). Other firm employees also delivered lists of patient records requiring falsification to Markoff's office, and discussed the required changes with Markoff's employees over the phone. Id. at 39-50, 55-57 (Trial II); 745-57, 795-97, 864-75 (Trial I). Employees of the Markoff practice then falsified the records, which subsequently would be submitted to the insurance companies. Id. at 35-66 (Trial II); 730-57, 877-98 (Trial I). Thus, there is substantial evidence to support the juries' determinations that the various associates [in the Law Firm-Markoff Enterprise] function[ed] as a continuing unit. Turkette, 452 U.S. at 583, 101 S.Ct. at 2528. 21 Finally, the third element of the enterprise requirement demands proof that the enterprise is an entity separate and apart from the pattern of activity in which it engages. Turkette, 452 U.S. at 583, 101 S.Ct. at 2529. 22 As we understand this last requirement, it is not necessary to show that the enterprise has some function wholly unrelated to the racketeering activity, but rather that it has an existence beyond that which is necessary merely to commit each of the acts charged as predicate racketeering offenses. The function of overseeing and coordinating the commission of several different predicate offenses and other activities on an on-going basis is adequate to satisfy the separate existence requirement. 23 Riccobene, 709 F.2d at 223-24. This requirement is satisfied by the evidence that both the firm and the Markoff practice coordinated the commission of multiple predicate offenses, see Govt.App. at 31-66, 204-39, 432-92 (Trial II), 730-67, 791-99, 817, 826-35, 849-60, 869-75, 877-898 (Trial I), and continued to provide legitimate services during the period in which they were engaged in racketeering activities, id. at 67, 373-74 (Trial II), 730-67 (Trial I). Thus, the evidence introduced at each trial supports the juries' determinations that the three elements of the enterprise requirement were established. 24 The appellants, however, also argue that the government failed to allege and establish a RICO enterprise consistent with the definition contained in Section 1961(4). Specifically, they argue that under Section 1961(4), an association in fact between two legal entities, like a law firm and a medical practice, is not a RICO enterprise. Markoff Br. at 13. As noted above, Section 1961(4) defines an enterprise as 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). According to the appellants' construction of this section, [a]n enterprise can be either a legal entity or an association-in-fact between non-legal entities, but not an association in fact between legal entities. Markoff Br. at 13. 25 As the government points out, Govt.Br. at 16, we rejected this restrictive definition of a RICO enterprise in United States v. Aimone, 715 F.2d 822, 828 (3d Cir.1983), cert. denied, 468 U.S. 1217, 104 S.Ct. 3585, 82 L.Ed.2d 883 (1984). Aimone involved a challenge to an indictment alleging the existence of an enterprise composed of a group of individuals and a corporation associated in fact. Id. Like the appellants in this case, the appellants in Aimone argued that an enterprise could consist of either a legal entity or an association in fact, but not both. Id. We held that the indictment charged a proper statutory enterprise because an association in fact could be composed of legal as well as non-legal entities. Id. 6 Moreover, [t]he Supreme Court has stated that '[t]here is no restriction upon the associations embraced by the definition' in section 1961(4). Id. (quoting Turkette, 452 U.S. at 580, 101 S.Ct. at 2527). Accordingly, the association in fact between the law firm and Markoff's medical practice constitutes a RICO enterprise under Section 1961(4).