U.S. v. Turkette

• Decision Date: 23 September 1980
• Docket Number: Nos. 79-1545,79-1546,s. 79-1545
• Citation: 632 F.2d 896
• Parties: UNITED STATES of America, Appellee, v. Novia TURKETTE, Jr., Defendant-Appellant. UNITED STATES of America, Appellee, v. John VARGAS, Defendant-Appellant.
• Court: U.S. Court of Appeals — First Circuit

Page 896

632 F.2d 896

UNITED STATES of America, Appellee, v. Novia TURKETTE, Jr., Defendant-Appellant.

UNITED STATES of America, Appellee, v. John VARGAS, Defendant-Appellant.

Nos. 79-1545, 79-1546.

United States Court of Appeals First Circuit.

Argued June 6, 1980.

Decided Sept. 23, 1980.

Alfred Paul Farese, Everett, Mass., for appellant, Novia Turkette, Jr.

John Wall and Harry C. Mezer, Boston, Mass., with whom Cullen & Wall, Boston, Mass., was on brief, for appellant, John Vargas.

William C. Bryson, Atty., Dept. of Justice, Boston, Mass., with whom Edward F. Harrington, U. S. Atty., Martin D. Boudreau, Sp. Atty., Boston, Mass., and Joel M. Gershowitz, Atty., Dept. of Justice, were on brief, for appellee.

Before COFFIN, Chief Judge, BOWNES, Circuit Judge and BOYLE, ^* District Judge.

BOWNES, Circuit Judge.

This appeal raises, for the first time in this circuit, the issue of whether Title IX of the Organized Crime Control Act of 1970, Pub.L. 91-452, 84 Stat. 941, 18 U.S.C. §§ 1961-68 (1970), authorizes the prosecution of individuals for engaging together in a series of criminal acts unrelated in any way to any legitimate business organization. RICO, an acronym for "Racketeer Influenced and Corrupt Organizations," was designed to break the stranglehold of racketeers on legitimate businesses and unions. We must determine whether the government's use of RICO in this case exceeded its statutory scope and purpose.

In Count Nine of a nine-count indictment, defendants-appellants Novia Turkette, Jr., ¹ John Vargas, and eleven others ² were charged with conspiring to "conduct, and participate directly and indirectly, in the conduct of the affairs of (an) enterprise, which would engage in, and the activities of which would affect interstate commerce, through a pattern of racketeering activity." The indictment alleged that the defendants were associated with each other and with an enterprise whose purpose was illegal trafficking in drugs, committing arson and insurance fraud, influencing the outcome of state trials, and bribing police officers. These crimes, as well as participation in the conduct of the enterprise through acts of racketeering, were alleged as acts in furtherance of the conspiracy. ³ Count One charged Turkette and nine co-defendants with distribution and possession with intent to distribute controlled substances. Counts Two through Five charged arson-for-profit schemes devised by Turkette and Vargas. Counts Six and Seven charged Turkette and codefendant Fraher with arson of an automobile and insurance fraud. Count Eight charged a similar scheme involving Turkette and codefendant Brown. ⁴

Convicted by a jury on all nine counts, Turkette was sentenced to serve consecutive terms of twenty years on the substantive counts. A twenty-year concurrent term and a $20,000 fine were imposed on Count Nine, the RICO conspiracy count. On appeal, he alleges that his motion for acquittal on the RICO count was improperly denied; that the trial court erred in denying his motions for relief from prejudicial joinder and severance; and that it erred in allowing Vargas to admit into evidence, over Turkette's objection, certain photographs seized from his home by the government.

Vargas repeatedly moved for acquittal on the RICO count and for severance, claiming lack of evidence linking him to the RICO conspiracy as the basis of misjoinder. At the close of the government's case, the RICO conspiracy charge against him was dropped. His motions for severance, however, were denied. The jury found him guilty of one count of mail fraud. He was acquitted of participation in the second mail fraud scheme. Vargas' main contention to this court is that the legal theory upon which the government predicated its RICO indictment was incorrect.

The validity of Count Nine of the indictment depends upon the interpretation of two provisions of RICO. Count Nine, section 1-O, alleges that "(d) efendants were associated with an 'enterprise' as defined in Title 18, United States Code, Section 1961(4) ...." Count Nine, section 2, charges defendants with conspiring to violate Title 18, United States Code, Section 1962(c). 18 U.S.C. § 1961(4) defines "enterprise":

"enterprise" includes 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. § 1962(c) makes it unlawful

for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.

The government's position is that the broad definition of enterprise in 1961(4) brings within the proscription of 1962(c) any individual or group of individuals who engage in a pattern of racketeering activity. Since the evidence here showed such a pattern ⁵ by the defendants, the statute, it is argued, therefore, applies to them.

Defendants' argument goes beyond the words of these two sections of RICO. Their position is that the Act was intended to protect legitimate business enterprises from being preyed upon and taken over by racketeers. RICO does not apply, they argue, to individuals whose only enterprise activity is completely criminal. Although it would be easy to dismiss out-of-hand an argument that asks us to exempt criminal activity from prosecution, we must examine the statute and its legislative history.

We first look at the other substantive sections of 18 U.S.C. § 1962. Section 1962(a) ⁶ provides that no person may use racketeering income to acquire any interest in any enterprise engaged in or which affects interstate commerce, and imposes a strict limitation on the use of such income to purchase securities on the open market. Acquisition of any enterprise through a pattern of racketeering activity is prohibited by 1962(b). ⁷ These two subsections make sense only if the protected "enterprise" is legitimate. If section 1962(c) is interpreted as the government urges, then it is at odds with (a) and (b). ⁸

A careful reading of sections 1961(4) and 1962(c) convinces us that they cannot be used as tandem springboards to reach any individual or groups of individuals who engage in a pattern of exclusively criminal racketeering activity. Each specific enterprise enumerated in section 1961(4) is a legitimate one. Under the principle of ejusdem generis, the final catch-all phrase "any ... group of individuals associated in fact ..." should also be limited to legitimate enterprises. If the Congress had intended to include "criminal enterprises" in the definition section, it would have done so. Contrary to the plain meaning of section 1961(4), the government uses the word "any" to engraft into the section a phrase that is not there: "enterprise includes" wholly criminal activity.

If we give section 1962(c) the construction urged by the government, it becomes internally redundant and important phrases are rendered superfluous. If "a pattern of racketeering" can itself be an "enterprise" for purposes of section 1962(c), then the two phrases "employed by or associated with any enterprise" and "the conduct of such enterprise's affairs through (a pattern of racketeering activity)" add nothing to the meaning of the section. The words of the statute are coherent and logical only if they are read as applying to legitimate enterprises.

This is confirmed by the fact that RICO, in addition to establishing substantive crimes for underworld attacks on legitimate businesses, provides civil remedies designed to rehabilitate victimized enterprises and protect them from further depredations. The remedies available include divestiture, dissolution, reorganization and restrictions on future activities and investments by the racketeer. 18 U.S.C. § 1964(a). Treble damages are also available to "(a)ny person injured in his business or property by reason of a violation of section 1962 ...." 18 U.S.C. § 1964(c).

Viewed in its entirety, RICO is a combination of criminal sanctions and civil remedies designed to protect legitimate commercial enterprises from the onslaught of racketeers and provide a means of repairing the effects of such incursions.

Our interpretation of "enterprise" to mean only a legitimate enterprise is reinforced by the legislative history of RICO. More than a decade ago, Congress decided that organized crime posed such a grave threat to society that only new, more stringent legislation could ameliorate the situation. The problem was multifaceted. Large-scale gambling, narcotics traffic, and loansharking were found to be the primary sources of organized crime's illicit revenues; ⁹ extortion, murder, and arson, inter alia, were its modus operandi. Congress pinpointed problems of proof-particularly weaknesses in evidence-gathering methods and the reluctance, predicated on fear, of witnesses to testify against organized criminals-as the major reason why most organized crime participants went unpunished. ¹⁰ Financial and physical incursions by racketeers into legitimate businesses and unions had become "one of the Nation's most serious criminal justice and economic problems." ¹¹ After almost two years of debate, drafting, and revision, it enacted the eleven titles of the Organized Crime Control Act of 1970 ¹² which contained a wide range of procedures designed to enhance the gathering and admissibility of evidence. These include provisions for special grand juries authorized to report on organized crime and law enforcement corruption; ¹³ a witness immunity program; ¹⁴ recalcitrant witness provisions; ¹⁵ and increased penalties for certain habitual offenders. ¹⁶ The Act created a new federal offense designed to "strike at organized crime's principal source of revenue: illegal gambling." ¹⁷ Participation by five or more persons in a gambling business...