Opinion ID: 530002
Heading Depth: 3
Heading Rank: 6

Heading: Enterprise Distinct from Racketeering Activity

Text: 38 In order to secure a conviction under RICO, the Government must prove both the existence of an 'enterprise' and the connected 'pattern of racketeering activity.'  Turkette, 452 U.S. at 583, 101 S.Ct. at 2528. The existence of an enterprise at all times remains a separate element [from the pattern of racketeering activity] which must be proved   . Id. (footnote omitted). The existence of an enterprise is proved by evidence of an ongoing organization, formal or informal, and by evidence that the various associates function as a continuing unit. Id. In light of Turkette and the legislative history of RICO, this court has determined that a RICO enterprise must exhibit three basic characteristics: (1) a common or shared purpose; (2) some continuity of structure and personnel; and (3) an ascertainable structure distinct from that inherent in a pattern of racketeering. United States v. Kragness, 830 F.2d 842, 855 (8th Cir.1987) (citing United States v. Bledsoe, 674 F.2d 647, 664-65 (8th Cir.), cert. denied, 459 U.S. 1040, 103 S.Ct. 456, 74 L.Ed.2d 608 (1982); United States v. Lemm, 680 F.2d 1193, 1198 (8th Cir.1982),cert. denied, 459 U.S. 1110, 103 S.Ct. 739, 74 L.Ed.2d 960 (1983)). These characteristics are mandated in order to avoid the danger of guilt by association that arises because RICO does not require a proof of a single agreement as in a conspiracy case, and in order to ensure that criminal enterprises, which are RICO's target, are distinguished from individuals who associate for the commission of sporadic crime. Id. (citations omitted). The appellants argue that the third element is absent here. They contend that if the fraudulent housing projects at Countryside and St. Alban's are eliminated, an enterprise structure does not remain. We disagree. 39 Significantly, the enterprise here involved legitimate businesses. Separating the enterprise from the pattern of racketeering is generally not problematic where a legal entity is involved, since 'this entity is likely to be clearly distinct from the acts of racketeering.'  Kragness, 830 F.2d at 855 n. 10 (quoting Bennett, 685 F.2d at 1060 n. 9). Putting the predicate acts of mail fraud aside, the evidence still shows that the enterprise had an on-going structure and that its members were not engaged in sporadic criminal activity. Here, the enterprise, its participants and their employees sold real estate, loaned money to develop properties, performed subcontracting work, and built single-family residences. See Kragness, 830 F.2d at 857-58 (stating that if the predicate acts of drug smuggling were put aside, the evidence still disclosed that the enterprise demonstrated an on-going structure, by purchasing property, acquiring planes, and renting airplane hangars); Lemm, 680 F.2d at 1201 (finding that if the predicate offenses of mail fraud were eliminated, the evidence still showed that an on-going structure engaged in legitimate purchases and repairs of property and illegal acts of arson). Thus, it has been demonstrated that the enterprise had an organizational pattern or system of authority beyond what was necessary to perpetrate the predicate crimes. Bledsoe, 674 F.2d at 665. 40 We find that the enterprise involving LMH, DiCon, AES, Stroth, and CACC had a common or shared purpose, some continuity of structure and personnel, and an ascertainable structure distinct from that inherent in the conduct of the pattern of the racketeering activity. Thus, the enterprise was distinct from the pattern of racketeering activity. 41 Having determined that Atlas and Olson have demonstrated each element of section 1962(c), we accordingly conclude that the district court correctly denied the motion for judgment n.o.v.