Opinion ID: 199398
Heading Depth: 2
Heading Rank: 1

Heading: RICO Enterprise: Instructions and Sufficiency

Text: 10 Both defendants claim that the district court erred in rejecting their proposed jury instruction which defined a criminal enterprise under 18 U.S.C.§ 1962(c) 3 as having an ascertainable structure, and that the jury's verdict cannot stand on the evidence. The district court did not err, and the evidence supports the verdict. 11 The district court charged the jury that under RICO the term enterprise: 12 includes any individual, partnership, corporation, association or other legal entity, and any group of individuals associated in fact although not a legal entity. An enterprise may be a formal or an informal organization of individuals so long as they have associated together for a common purpose. . . . In the present case, it is alleged that each defendant, and others, were associated in fact to form an enterprise, called among other names, Intervale, the Intervale Posse, and IVP. To find that an association in fact existed, you must find that the alleged enterprise had an ongoing organization, formal or informal, and that its various associates functioned as a continuing unit for a common purpose. This means that although individuals may come and go, the enterprise must continue in an essentially unchanged form during substantially the entire period alleged in the indictment. 13 Note that the enterprise element is different from the racketeering activity element. Although the proof to establish these elements may overlap, proof of one does not necessarily establish the other. Rather, the enterprise must be an entity separate and apart from the pattern of racketeering activity in which it engages. 14 The defendants requested that the district court further define the term enterprise by instructing the jury that [a]t a minimum, the enterprise must exhibit some sort of structure for the making of decisions, whether it be hierarchical or consensual. The court refused, and defendants now appeal its enterprise instruction. 15 Defendants based their request on a line of cases which they say support the requirement of an explicit ascertainable structure jury instruction under RICO. See Chang v. Chen, 80 F.3d 1293, 1297 (9th Cir. 1996); United States v. Riccobene, 709 F.2d 214, 222 (3d Cir. 1983), overruled on other grounds by Griffin v. United States, 502 U.S. 46 (1991); United States v. Bledsoe, 674 F.2d 647, 664 (8th Cir. 1982). Defendants refer to their proposed language as the Bledsoe test. In Bledsoe, which involved securities fraud, the Eighth Circuit required proof of some structure separate from the racketeering activity and distinct from the organization which is a necessary incident to the racketeering in order to avoid to collapse of the enterprise element with the separate pattern of racketeering activity element of a RICO offense. 674 F.2d at 664. Bledsoe thus required that a RICO enterprise have an ascertainable structure distinct from that inherent in the conduct of a pattern of racketeering activity. . . . [which] might be demonstrated by proof that a group engaged in a diverse pattern of crimes or that it has an organizational pattern or system of authority beyond what was necessary to perpetrate the predicate crimes. Id. at 665 (internal quotation marks and citation omitted); see also Chang, 80 F.3d at 1297 (adopting ascertainable structure requirement to avert the danger of the enterprise [being] no more than the sum of the predicate racketeering acts). The prosecution rejoins that Bledsoe and its successors like Chang use the concept of ascertainable structure simply as an analytic device in determining whether the evidence was sufficient to support the verdict, and also argues, in a bit of non-sequitur, that the phrase has no use as a jury instruction. Cf. Riccobene, 709 F.2d at 223 (evidence sufficient to satisfy enterprise prong where, inter alia, it showed an organization with a leader and a group of supervisors, each running his own operations with 'his own people,' but coordinated with the operations of other supervisors to provide greater profits and fewer conflicts). 16 Here, the district court took its instruction almost directly from the language of the Supreme Court's decision in United States v. Turkette, 452 U.S. 576 (1981), and no more was needed to define the term enterprise for the jury. This court was before asked to adopt the Bledsoe test; it did not need to resolve the question because the evidence was sufficient even assuming arguendo the Bledsoe test applied. See United States v. London, 66 F.3d 1227, 1244 (1st Cir. 1995); see also United States v. Owen, 167 F.3d 739, 752 n.6 (1st Cir. 1999) (noting that First Circuit has not adopted Bledsoe test; concluding that evidence sufficiently established enterprise separate from pattern of racketeering activity). We today explicitly reject the Bledsoe test as an additional requirement beyond the Turkette instruction. Indeed, we think the defendants' proposed Bledsoe instruction could be misleading. The important concept underlying Bledsoe was that the government must prove both an enterprise and a pattern of racketeering activity. See Bledsoe, 674 F.2d at 663-65. That concept was specifically captured in the instruction given by the district court in this case. Bledsoe should not be torn from its conceptual moorings. So too were instructions given here on the important concepts that an enterprise is proved, as Turkette had said, by evidence of an ongoing organization that was formal or informal and by evidence that the various associates function as a continuing unit. Turkette, 452 U.S. at 583; see also Riccobene, 709 F.2d at 221 (saying Turkette defined illegal enterprise for RICO purposes to avoid the danger that the statute would be construed too broadly). While enterprise and pattern of racketeering activity are separate elements of a RICO offense, proof of the these two elements need not be separate or distinct but may in fact coalesce. Turkette, 452 U.S. at 583. The defendants' proposed jury instruction here addressed not the ongoing nature of the enterprise -- a problem addressed in Turkette but rather its structure. Here, on the issue of structure and its ascertainability, the slope is slippery, and the district court appropriately avoided the slope's edge. Since Congress intended the term enterprise to include both legal and criminal enterprises, see id. at 580-81, and because the latter may not observe the niceties of legitimate organizational structures, we refuse to import an ascertainable structure requirement into jury instructions. 17 Defendants also argue that there was insufficient evidence of any enterprise. Not so. The gang was ongoing and identifiable: it changed its name from Adidas to the IVP, it had colors and signs, it had older members who instructed younger ones, its members referred to the gang as family, and it had sessions where important decisions were made, including decisions about taking action against rival drug dealers. 18 Defendants protest that the IVP is just a motley crew of young criminals and that it hardly constitutes the type of highly sophisticated organized crime that spurred Congress to enact RICO. Even if the IVP were a fledgling criminal organization, we doubt that Congress meant to give a pass to such fledgling organizations. In any event, the IVP was no innocent group of teenagers, but rather was sophisticated and experienced in its own way in the rough, often violent business of drug dealing. That there was yet no evidence the IVP had infiltrated legitimate businesses as organized crime frequently has done does not insulate the IVP from RICO's reach. The IVP was well within Congress' intended scope. See Turkette, 452 U.S. at 591 (RICO is equally applicable to a criminal enterprise that has no legitimate dimension or has yet to acquire one. Accepting that the primary purpose of RICO is to cope with the infiltration of legitimate businesses, applying the statute . . . so as to reach criminal enterprises, would seek to deal with the problem at its very source.). 19