§ 609.904

State v. Trong Kim Huynh · 1994 4 citations

*194 I. Defendant argues that "as a matter of law" the evidence fails to prove beyond a reasonable doubt the commission of a racketeering offense. Discussion of this issue raises, first, a question of law as to the elements that must be proved to constitute a racketeering "enterprise." A person is guilty of racketeering if the person is "employed by or associated with an enterprise and intentionally conducts or participates in the affairs of the enterprise by participating in a pattern of criminal activity." Minn. Stat. § 609.903, subd. 1(1). Our attention in this case is on what constitutes an "enterprise." The statute defines an enterprise as "a sole proprietorship, partnership, corporation, trust, or other legal entity, or a union, governmental entity, association, or group of persons, associated in fact although not a legal entity, and includes illicit as well as legitimate enterprises." Minn. Stat. § 609.902, subd. 3 (1992). Minnesota's RICO statute is much like the federal RICO law; consequently, in construing our statute it is helpful to consider the federal courts' interpretation of the federal Act. While both the federal and state RICO statutes define "enterprise" simply as a particular type of entity (such as a corporation or association in fact),[3] federal case law supplements this definition by identifying certain characteristics the entity must have. The leading decision is United States v. Turkette, 452 U.S. 576, 101 S.Ct. 2524, 69 L.Ed.2d 246 (1981). There the United States Supreme Court ruled that the existence of an "enterprise" and the "pattern of criminal activity" are two separate elements to be proven. Id. at 583, 101 S.Ct. at 2528. An enterprise, according to Turkette, requires proof that a group of persons is associated together as an "ongoing organization"; the "pattern of racketeering activity," on the other hand, requires a series of criminal predicate acts. Id. Proof of these two elements, said the Court in Turkette, may at times "coalesce," i.e., in some cases the same proof may be used to prove both elements. Id. The federal courts of appeal, however, have disagreed on whether, in addition to an ongoing organization and a pattern of racketeering activity, a further element is required to prove an enterprise. Some federal courts say only the two elements need be proven because that is all the statute requires. Indeed, because proof of the two elements tends to coalesce, it has been said that an enterprise is, "in effect, no more than the sum of the predicate racketeering acts." United States v. Bagaric, 706 F.2d 42 (2d Cir.), cert. denied, 464 U.S. 840, 104 S.Ct. 133, 78 L.Ed.2d 128 (1983). Other federal courts, including the Eighth Circuit, have concluded otherwise. See generally David Vitter, Comment, The RICO Enterprise as Distinct from the Pattern of Racketeering Activity: Clarifying the Minority View, 62 Tul.L.Rev. 1419, 1424-29 (1988) (setting out the split in federal case law). In United States v. Bledsoe, 674 F.2d 647, 664 (8th Cir.), cert. denied, 459 U.S. 1040, 103 S.Ct. 456, 74 L.Ed.2d 608 (1982), the Eighth Circuit reasoned that a RICO enterprise "cannot simply be the undertaking of the acts of racketeering, neither can it be the minimal association which surrounds these acts." Something more is needed. Otherwise, every time two individuals commit several criminal acts there would be an offense of racketeering. Id. Therefore, said Bledsoe, "the inclusion of the enterprise element requires proof of some structure separate from the racketeering activity and distinct from the organization which is necessarily incident to the racketeering * * *." Id. More recently, in United States v. Kragness, 830 F.2d 842, 855 (8th Cir.1987), the Eighth Circuit set out a three-part test for a RICO enterprise, requiring a common purpose, continuity, and "an ascertainable structure distinct from that inherent in the conduct of a pattern of racketeering activity." The State takes the position that there is no need for a Bledsoe-type "distinct structure" requirement. As we understand it, the *195 State's argument is that if the enterprise involves a legal entity, such as a partnership or corporation, the legal entity serves as a "distinct structure" differentiating the criminal enterprise from the criminal acts it commits. See Kragness, 830 F.2d at 855 n. 10. On the other hand, when the enterprise "is wholly criminal," then, argues the State, "the facts used to support the predicate offenses may be the same as the facts used to prove the existence of the enterprise"; and so, in such a case, a "distinct structure" is unnecessary, even if the enterprise is only an association-in-fact. This reasoning is not without merit, except for the fact that the commission of criminal acts will always involve some organizational enterprise on the part of the participants. If this minimal cooperative effort is all that is required for the existence of an enterprise, then the RICO offense collapses into nothing more than the enhanced punishment of recidivists. To avoid this collapse, we think there must be some requirement focusing the statute on "organized crime" and excluding ordinary, run-of-the-mill criminal activity. The legislative history of Minnesota's RICO law sheds, at best, a flickering light on the meaning of "enterprise."[4] Clearly, our statute is not limited to drug "kingpins" or major crime syndicates, but neither do we think our Act is intended to make a racketeer out of every criminal offender. It is highly relevant that the penalty imposed by our state legislature for a RICO conviction is up to 20 years in prison and a fine up to $1 million. Minn. Stat. § 609.904, subd. 1 (1992). The statute also provides for injunctive relief, restitution, and an alternate fine amounting to three times the loss caused or illegitimate profits gained, id., as well as criminal forfeiture, Minn. Stat. § 609.905. To repeat, the State claims that the facts for proving the predicate offenses are the same facts that prove the existence of an illicit enterprise. This is not entirely true. To prove the offense of racketeering, not only must the State prove certain predicate criminal acts, but it must also prove a "pattern of criminal activity," and this pattern involves more than just the predicate criminal acts. The "pattern of criminal activity" (or "pattern of racketeering" under the federal Act) has its own separate statutory definition. And, significantly, the definition of "pattern" under the state Act spells out requirements that are not spelled out in the federal Act.[5] Under the federal RICO law, a "pattern of racketeering" is defined simply as requiring at least two acts of racketeering activity within a certain time frame. See 18 U.S.C. § 1961(5) (1988). Under the Minnesota statute, a "pattern of criminal activity" not only requires the requisite number of criminal acts (three or more) within a specified time frame, but specifies (1) that the criminal acts must neither be isolated incidents nor the equivalent of a single offense, and (2) that *196 the criminal acts be related "through a common scheme or plan or a shared criminal purpose," or be committed, solicited or aided by persons mentally culpable for the crimes and associated with or in an enterprise involved in those activities.[6] If the purpose of the Bledsoe, "distinct structure" requirement is to avoid casting too wide a net and catching the unorganized criminal, then, it seems to us, the definition of "pattern of criminal activity" spelled out in our state's RICO Act in large part accomplishes this purpose. Isolated, sporadic criminal acts do not count. The criminal acts must be related through a common plan or shared purpose, or alternatively, must be committed or promoted by persons associated with the enterprise. It is when the enterprise is an "association-in-fact" that the Bledsoe concerns become most prominent. In this situation, there is no legal entity identifiable as an organizational structure. The group or association is likely loosely structured and quite informal, and hard evidence of a business-like organization is difficult to come by. It is here that the danger of RICO being expanded into an enhancement statute for recidivists is greatest. This danger can be obviated, we think, if it is shown that there is an organizational set-up, whether formal or informal, that not only exists to commit the predicate acts but also does more, such as coordinating those acts into an overall pattern of criminal activity. It is enough here, we believe, after reviewing the cases and comments on the federal Act, that we conclude an "enterprise" under Minnesota's RICO Act is characterized by — 1) a common purpose among the individuals associated with the enterprise; where 2) the organization is ongoing and continuing, with its members functioning under some sort of decisionmaking arrangement or structure; and where 3) the activities of the organization extend beyond the commission of the underlying criminal acts either to coordinate the underlying criminal acts into a pattern of criminal activity or to engage in other activities.[7] *197 In the trial of this case, the trial court instructed the jury on the pertinent sections of our RICO Act, but generally, henceforth, the jury should also be instructed on the characterizations of an enterprise listed above.

*194 I. Defendant argues that "as a matter of law" the evidence fails to prove beyond a reasonable doubt the commission of a racketeering offense. Discussion of this issue raises, first, a question of law as to the elements that must be proved to constitute a racketeering "enterprise." A person is guilty of racketeering if the person is "employed by or associated with an enterprise and intentionally conducts or participates in the affairs of the enterprise by participating in a pattern of criminal activity." Minn. Stat. § 609.903, subd. 1(1). Our attention in this case is on what constitutes an "enterprise." The statute defines an enterprise as "a sole proprietorship, partnership, corporation, trust, or other legal entity, or a union, governmental entity, association, or group of persons, associated in fact although not a legal entity, and includes illicit as well as legitimate enterprises." Minn. Stat. § 609.902, subd. 3 (1992). Minnesota's RICO statute is much like the federal RICO law; consequently, in construing our statute it is helpful to consider the federal courts' interpretation of the federal Act. While both the federal and state RICO statutes define "enterprise" simply as a particular type of entity (such as a corporation or association in fact),[3] federal case law supplements this definition by identifying certain characteristics the entity must have. The leading decision is United States v. Turkette, 452 U.S. 576, 101 S.Ct. 2524, 69 L.Ed.2d 246 (1981). There the United States Supreme Court ruled that the existence of an "enterprise" and the "pattern of criminal activity" are two separate elements to be proven. Id. at 583, 101 S.Ct. at 2528. An enterprise, according to Turkette, requires proof that a group of persons is associated together as an "ongoing organization"; the "pattern of racketeering activity," on the other hand, requires a series of criminal predicate acts. Id. Proof of these two elements, said the Court in Turkette, may at times "coalesce," i.e., in some cases the same proof may be used to prove both elements. Id. The federal courts of appeal, however, have disagreed on whether, in addition to an ongoing organization and a pattern of racketeering activity, a further element is required to prove an enterprise. Some federal courts say only the two elements need be proven because that is all the statute requires. Indeed, because proof of the two elements tends to coalesce, it has been said that an enterprise is, "in effect, no more than the sum of the predicate racketeering acts." United States v. Bagaric, 706 F.2d 42 (2d Cir.), cert. denied, 464 U.S. 840, 104 S.Ct. 133, 78 L.Ed.2d 128 (1983). Other federal courts, including the Eighth Circuit, have concluded otherwise. See generally David Vitter, Comment, The RICO Enterprise as Distinct from the Pattern of Racketeering Activity: Clarifying the Minority View, 62 Tul.L.Rev. 1419, 1424-29 (1988) (setting out the split in federal case law). In United States v. Bledsoe, 674 F.2d 647, 664 (8th Cir.), cert. denied, 459 U.S. 1040, 103 S.Ct. 456, 74 L.Ed.2d 608 (1982), the Eighth Circuit reasoned that a RICO enterprise "cannot simply be the undertaking of the acts of racketeering, neither can it be the minimal association which surrounds these acts." Something more is needed. Otherwise, every time two individuals commit several criminal acts there would be an offense of racketeering. Id. Therefore, said Bledsoe, "the inclusion of the enterprise element requires proof of some structure separate from the racketeering activity and distinct from the organization which is necessarily incident to the racketeering * * *." Id. More recently, in United States v. Kragness, 830 F.2d 842, 855 (8th Cir.1987), the Eighth Circuit set out a three-part test for a RICO enterprise, requiring a common purpose, continuity, and "an ascertainable structure distinct from that inherent in the conduct of a pattern of racketeering activity." The State takes the position that there is no need for a Bledsoe-type "distinct structure" requirement. As we understand it, the *195 State's argument is that if the enterprise involves a legal entity, such as a partnership or corporation, the legal entity serves as a "distinct structure" differentiating the criminal enterprise from the criminal acts it commits. See Kragness, 830 F.2d at 855 n. 10. On the other hand, when the enterprise "is wholly criminal," then, argues the State, "the facts used to support the predicate offenses may be the same as the facts used to prove the existence of the enterprise"; and so, in such a case, a "distinct structure" is unnecessary, even if the enterprise is only an association-in-fact. This reasoning is not without merit, except for the fact that the commission of criminal acts will always involve some organizational enterprise on the part of the participants. If this minimal cooperative effort is all that is required for the existence of an enterprise, then the RICO offense collapses into nothing more than the enhanced punishment of recidivists. To avoid this collapse, we think there must be some requirement focusing the statute on "organized crime" and excluding ordinary, run-of-the-mill criminal activity. The legislative history of Minnesota's RICO law sheds, at best, a flickering light on the meaning of "enterprise."[4] Clearly, our statute is not limited to drug "kingpins" or major crime syndicates, but neither do we think our Act is intended to make a racketeer out of every criminal offender. It is highly relevant that the penalty imposed by our state legislature for a RICO conviction is up to 20 years in prison and a fine up to $1 million. Minn. Stat. § 609.904, subd. 1 (1992). The statute also provides for injunctive relief, restitution, and an alternate fine amounting to three times the loss caused or illegitimate profits gained, id., as well as criminal forfeiture, Minn. Stat. § 609.905. To repeat, the State claims that the facts for proving the predicate offenses are the same facts that prove the existence of an illicit enterprise. This is not entirely true. To prove the offense of racketeering, not only must the State prove certain predicate criminal acts, but it must also prove a "pattern of criminal activity," and this pattern involves more than just the predicate criminal acts. The "pattern of criminal activity" (or "pattern of racketeering" under the federal Act) has its own separate statutory definition. And, significantly, the definition of "pattern" under the state Act spells out requirements that are not spelled out in the federal Act.[5] Under the federal RICO law, a "pattern of racketeering" is defined simply as requiring at least two acts of racketeering activity within a certain time frame. See 18 U.S.C. § 1961(5) (1988). Under the Minnesota statute, a "pattern of criminal activity" not only requires the requisite number of criminal acts (three or more) within a specified time frame, but specifies (1) that the criminal acts must neither be isolated incidents nor the equivalent of a single offense, and (2) that *196 the criminal acts be related "through a common scheme or plan or a shared criminal purpose," or be committed, solicited or aided by persons mentally culpable for the crimes and associated with or in an enterprise involved in those activities.[6] If the purpose of the Bledsoe, "distinct structure" requirement is to avoid casting too wide a net and catching the unorganized criminal, then, it seems to us, the definition of "pattern of criminal activity" spelled out in our state's RICO Act in large part accomplishes this purpose. Isolated, sporadic criminal acts do not count. The criminal acts must be related through a common plan or shared purpose, or alternatively, must be committed or promoted by persons associated with the enterprise. It is when the enterprise is an "association-in-fact" that the Bledsoe concerns become most prominent. In this situation, there is no legal entity identifiable as an organizational structure. The group or association is likely loosely structured and quite informal, and hard evidence of a business-like organization is difficult to come by. It is here that the danger of RICO being expanded into an enhancement statute for recidivists is greatest. This danger can be obviated, we think, if it is shown that there is an organizational set-up, whether formal or informal, that not only exists to commit the predicate acts but also does more, such as coordinating those acts into an overall pattern of criminal activity. It is enough here, we believe, after reviewing the cases and comments on the federal Act, that we conclude an "enterprise" under Minnesota's RICO Act is characterized by — 1) a common purpose among the individuals associated with the enterprise; where 2) the organization is ongoing and continuing, with its members functioning under some sort of decisionmaking arrangement or structure; and where 3) the activities of the organization extend beyond the commission of the underlying criminal acts either to coordinate the underlying criminal acts into a pattern of criminal activity or to engage in other activities.[7] *197 In the trial of this case, the trial court instructed the jury on the pertinent sections of our RICO Act, but generally, henceforth, the jury should also be instructed on the characterizations of an enterprise listed above.

+ 2 more citations in this opinion.

State v. Kujak · 2002 1 citation

+ 1 more citation in this opinion.

State v. Kelly · 1993 1 citation

+ 1 more citation in this opinion.

State v. Trong Kim Huynh · 1993 2 citations

+ 2 more citations in this opinion.