U.S. v. Martino

• Citation: 681 F.2d 952
• Decision Date: 02 August 1982
• Docket Number: No. 78-3611,78-3611
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Sam C. MARTINO, Joseph C. Russello and Rolando Gonzalez Rodriguez, Defendants-Appellants. . *
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 952

681 F.2d 952

UNITED STATES of America, Plaintiff-Appellee, v. Sam C. MARTINO, Joseph C. Russello and Rolando Gonzalez Rodriguez, Defendants-Appellants.

No. 78-3611.

United States Court of Appeals Fifth Circuit. ^*

Aug. 2, 1982.

D. Frank Winkles, Tampa, Fla., for Martino.

Raymond E. LaPorte, Tampa, Fla., for Russello.

Peter N. Macaluso, Tampa, Fla., for Rodriguez.

Eleanor J. Hill, Sp. Atty., Dept. of Justice, Tampa, Fla., Sara Criscitelli, Dept. of Justice, Washington, D. C., for the U. S.

William W. Taylor, III, Washington, D. C., for amicus curiae.

Appeals from the United States District Court for the Middle District of Florida.

Before GODBOLD, Chief Judge, BROWN, CHARLES CLARK, RONEY, GEE, TJOFLAT, HILL, FAY, RUBIN, VANCE, KRAVITCH, FRANK M. JOHNSON, Jr., HENDERSON, REAVLEY, POLITZ, HATCHETT, ANDERSON, RANDALL, TATE, SAM D. JOHNSON, THOMAS A. CLARK, WILLIAMS and GARWOOD, Circuit Judges. ^**

JAMES C. HILL, Circuit Judge:

We granted rehearing en banc in this case to decide whether the term "interest" as used in 18 U.S.C. § 1963(a)(1), the criminal forfeiture provision of the Racketeer Influenced and Corrupt Organizations statute (RICO), 18 U.S.C. §§ 1961-1968, ¹ includes income or profits derived from a pattern of racketeering activity. Specifically at issue in this case is the forfeitability of insurance proceeds obtained through the conduct of an arson ring. The district court resolved this question of statutory construction in the government's favor. On appeal a panel of this court reversed the monetary forfeiture orders. ² We now affirm the decision reached by the trial court.

I

The facts surrounding the indictment, prosecution, and conviction of the various defendants are set out in detail in the panel opinion, 648 F.2d at 378-80, 409-11 app. Briefly, the evidence showed that a group of individuals associated for the purpose of committing arson with the intent to defraud insurance companies. This association in fact enterprise, ³ composed of an insurance adjuster, homeowners, promoters, investors, and arsonists, operated to destroy at least eighteen residential and commercial properties in Tampa and Miami, Florida between July 1973 and April 1976. The panel summarized the ring's operations as follows:

At first the arsonists only burned buildings already owned by those associated with the ring. Following a burning, the building owner filed an inflated proof of loss statement and collected the insurance proceeds from which his co-conspirators were paid. Later, ring members bought buildings suitable for burning, secured insurance in excess of value and, after a burning, made claims for the loss and divided the proceeds.

Id. at 380. These activities formed the basis for an indictment charging twenty-three defendants with mail fraud, ⁴ conspiring to violate RICO, ⁵ and substantive RICO violations. ⁶ Following a jury trial sixteen defendants were found guilty and sentenced to varying terms of imprisonment. ⁷ Pursuant to Federal Rule of Criminal Procedure 31(e), ⁸ the forfeiture question was then submitted to the jury for its special verdict on the extent of the interest or property subject to forfeiture. The jury ordered four defendants to forfeit monies received as insurance payments upon the successful burning of their properties: Paul Guarino-$4,000.00; Sam C. Martino-$2,500.00; ⁹ Rolando G. Rodriguez-$4,266.83; and Joseph C. Russello-$340,043.69. Concluding that § 1963(a)(1) was intended to reach only interests in an enterprise and not the profits or income from racketeering activity, the panel reversed these monetary forfeitures. 648 F.2d at 409. ¹⁰

II

A

Resolution of this issue of statutory construction must begin with an analysis of the language of the statute itself. Bread Political Action Committee v. Federal Election Commission, --- U.S. ----, ----, 102 S.Ct. 1235, 1237, 71 L.Ed.2d 432 (1982) (quoting Dawson Chemical Co. v. Rohm & Haas Co., 448 U.S. 176, 187, 100 S.Ct. 2601, 2608, 65 L.Ed.2d 696 (1980)). In the absence of "a clearly expressed legislative intention to the contrary," the plain language of the statute controls its construction. --- U.S. ----, 102 S.Ct. at 1238 (quoting Consumer Product Safety Comm'n v. GTE Sylvania, 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980)). Under 18 U.S.C. § 1963(a), a defendant who

violates any provision of section 1962 ... shall forfeit to the United States (1) any interest he has acquired or maintained in violation of section 1962, and (2) any interests in, security of, claim against, or property or contractual right of any kind affording a source of influence over, any enterprise which he has established, operated, controlled, conducted, or participated in the conduct of, in violation of section 1962.

On its face, § 1963(a)(1) does not limit forfeitable interests to those in an enterprise. Rather, the statute speaks broadly of "any interest" which is the product of violating RICO's prohibitory provision, section 1962. Significantly, § 1963(a)(2) expressly limits forfeitable interests to those in an enterprise. Guiding our efforts at statutory construction in the past has been the presumption that "where Congress includes particular language in one section of a statute but omits it in another section of the same Act, ... Congress acts intentionally and purposely in the disparate inclusion or exclusion." United States v. Wong Kim Bo, 472 F.2d 720, 722 (5th Cir. 1972). ¹¹ Hence the limitation in § 1963(a)(2), and the absence of limitation in § 1963(a)(1), confirm what the straightforward language of the latter already tells us: that § 1963(a)(1) reaches any interest derived from a violation of § 1962.

No definition of the term "interest" appears in RICO. We must assume "that the legislative purpose is expressed by the ordinary meaning of the words used." Richards v. United States, 369 U.S. 1, 9, 82 S.Ct. 585, 7 L.Ed.2d 492 (1962). The common or dictionary definition of the term includes "right, title, or legal share in something; participation in advantage, profit, and responsibility." Webster's Third New International Dictionary 1178 (1971). It has also been defined as "(t)he most general term that can be employed to denote a right, claim, title, or legal share in something." Black's Law Dictionary 729 (5th ed. 1979). The concept is therefore broad enough to include profits or income. Indeed, this understanding comports with the House Report's definition of "interest" as inclusive of "all property and interests, as broadly described, which are related to the violations." H.R.Rep.No.1549, 91st Cong., 2d Sess. 57, reprinted in (1970) U.S.Code Cong. & Ad.News 4007.

Not only is the concept of profits or proceeds within the plain meaning of "interest," but the proceeds in question in this case were "acquired ... in violation of section 1962," as § 1963(a)(1) requires. The insurance proceeds were the product of the defendants' violation of § 1962(c). That section makes it unlawful for "any person ... associated with any enterprise ... to conduct or participate ... in the conduct of such enterprise's affairs through a pattern of racketeering activity ...." In this case, members of the arson ring conducted the affairs of that enterprise through the racketeering offenses of arson and mail fraud. Thus the unambiguous language of § 1963(a)(1) supports the view that profits derived from a pattern of racketeering activities are subject to forfeiture.

Defendants and amicus ¹² maintain that their position-that forfeitable interests under § 1963(a)(1) are limited to interests in an enterprise-also is supported by the language of the statute. Their analysis of the statute cannot withstand scrutiny. The only express limitation on forfeitable interests imposed by the language of the statute itself is that the interest must be "acquired or maintained in violation of section 1962." Defendants and amicus, however, read a further limitation into this language. Specifically they argue that "one acquires or maintains an interest in violation of Section 1962 only when he acquires or maintains an interest in contravention of Sections 1962(a) or (b)." Brief for Amicus Curiae at 7 (emphasis added). Briefly, § 1962(a) proscribes the use or investment of illegally derived income to acquire, establish, or operate an enterprise, while § 1962(b) prohibits the use of racketeering methods to acquire or maintain an interest in an enterprise. ¹³ Accordingly, the defendants and amicus argue, the link between the prohibitory provisions in §§ 1962(a) and (b), which refer to acquiring or maintaining violations, and the penal provision in § 1963(a)(1), which refers to interests "acquired or maintained" in violation of RICO, is clear. This reasoning, however, is flawed in several respects. First, it completely ignores § 1962(c). The language of § 1963(a)(1) ties forfeiture to violation of any of the prohibitory provisions in § 1962, not just §§ 1962(a) and (b). ¹⁴

Second, the argument of defendants and amicus misconstrues the function of the reference in § 1963(a)(1) to § 1962. To be sure, the reference serves a kind of limiting function, but that function is not to define the type of forfeitable interests, as defendants and amicus assume. Rather, the reference merely identifies the illegal activities which trigger the forfeiture penalty, supplying the nexus between the RICO violation and the forfeitable property which the government must establish at trial. ¹⁵

Third, reading an enterprise limitation into § 1963(a)(1) renders that section surplusage. Section 1963(a)(2) on its face requires forfeiture of "any interest in ... any enterprise which (the defendant) has established, operated, controlled, conducted, or participated in the conduct of, in violation of section 1962." The establishment, operation, and control language clearly refers to violations of §§ 1962(a) and (b). Section 1963(a)(1) would merely be duplicative of this provision if, as defendan...