Court Opinion

ID: 6945093
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:22:06.024569+00
Date Added: 2024-06-11T16:07:52.244669
License: Public Domain

RYMER, Circuit Judge,
concurring in part and dissenting in part:
I join the majority’s opinion except for its application of the Reves/Antar standard in Part III, since I can’t conclude on the facts before us that there was any evidence that Trans World conspired to participate in FIA’s management or operation.
As Judge Wallace observes, this is a difficult case under the Reves/Antar standard, which requires proof that Trans World conspired “to operate or manage an enterprise.” Reves v. Ernst & Young, 507 U.S. 170, 185, 113 S.Ct. 1163, 1173, 122 L.Ed.2d 525 (1993) (stating that the standard for violating § 1962(c) is “participation] in the operation or management of the enterprise itself’); United States v. Antar, 53 F.3d 568, 581 (3d Cir.1995) (setting the standard for conspiring to violate § 1962(c)). The majority concludes that there was circumstantial evidence that Trans World agreed to participate in operating the Fletcher enterprise in that Royals knew what FIA was doing, attended Fletcher’s tax seminars, approved altering the W-4 forms, told Fletcher that they would all “make money,” paid commissions to Fletcher’s insurance agents, and appeared to encourage Fletcher’s activities. I part company because to me, these facts amount at most to an agreement to do something wrong — not to an agreement to violate § 1962(c) by operating or managing FIA.
Neibel alleged, and the district court found, that FIA was the RICO enterprise. Neibel therefore had to prove that Trans World, which was in the business of selling insurance through agents, agreed or conspired to step outside that business and to take some part in directing FIA’s affairs. The district court ruled that the evidence could not, as a matter of law, show that Trans World in fact played any part in operating or managing the enterprise in violation of § 1962(c), and Neibel hasn’t cross-appealed that ruling.
Although the district court’s ruling that Trans World did not violate § 1962(c) does not defeat Neibel’s conspiracy claim as a matter of law, as a practical matter it makes it virtually impossible to prove in this case for there is no evidence of an inchoate conspiracy. Viewed most charitably to the verdict, the evidence shows that Trans World knew and approved of what FIA was doing, and benefitted financially from it because it was able to sell insurance. Without question, this supports an inference that Trans World agreed with Fletcher that FIA should operate as it did, so that both companies could profit from the fraud. And from this, the jury could reasonably conclude that Trans World “conspir[ed] with someone [Fletcher] who [was] operating or managing the enterprise.” See Antar, 53 F.3d at 581. But that is not enough under the. Third Circuit’s test that we adopt. Rather, Neibel had to show that Trans World “conspir[ed] to operate or manage an enterprise” itself. Id. In other words, he had to show that Trans World agreed “to do something for which, if the act [were] completed successfully, [it] would be *1134liable under section 1962(c),” id, that is, that while Trans World did not participate in operating or managing FIA,, it conspired or agreed to do so.
As I read the record, Neibel failed because there is no evidence that Trans World had any interest in running FIA. It sold insurance and was happy to do so to FIA’s victims. Yet nothing suggests that ' Trans World agreed with Fletcher or anyone else to take over, wholly or in part, the “operation or management” of the enterprise, FIA.
Absent a showing that Trans World agreed with someone to operate or manage FIA itself, it was “not conspiring to do something for which [it] could be held liáble under the substantive clause of the statute. Therefore, liability should not attach,” id, and I would reverse the verdict for Neibel.