McCullough v. Suter
| Decision Date | 13 March 1985 |
| Docket Number | No. 84-1516,84-1516 |
| Citation | 757 F.2d 142 |
| Parties | R.D. McCULLOUGH, II, and Utica National Bank, as trustee of the R.D. McCullough, II, Self Employed Retirement Plan, Plaintiffs-Appellees, v. Richard W. SUTER, d/b/a National Investment Publishing Company, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Gordon J. Arnett, Chicago, Ill., for defendant-appellant.
Charles L. Glick, Burke, Bosselman, Freivogel, Weaver, Glaves & Ryan, Chicago, Ill., for plaintiffs-appellees.
Before CUDAHY, POSNER, and FLAUM, Circuit Judges.
The question for decision--one of first impression so far as we are able to determine--is whether a sole proprietorship can be an "enterprise" with which its proprietor can be "associated" within the meaning of a provision of the Racketeer Influenced and Corrupt Organizations Act (), 18 U.S.C. Sec. 1962(c), which 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." There are no cases on the question and no pertinent legislative history.
Richard Suter, who under the name of the National Investment Publishing Company advises people about investments and buys coins for investment on their behalf, received $23,000 from the Utica National Bank to buy coins for R.D. McCullough's self-employed retirement account, which the bank manages. Suter represented that he used the money to buy coins, but he sent only three coins, together worth less than $10,000, to the bank, and the bank and McCullough brought this suit. Later Suter pleaded guilty to two counts of having used the mails to defraud coin investors such as the bank and McCullough, in violation of the federal mail-fraud statute. After a bench trial, the district court in this case found that Suter had defrauded the plaintiffs of $14,000, and awarded them treble their damages, plus attorney's fees, under the civil damages provision of the RICO statute, 18 U.S.C. Sec. 1964(c).
There is no question that Suter's fraudulent activity constituted a pattern of racketeering activity as that term is defined in the statute, or that Suter conducted the affairs of the National Investment Publishing Company through this pattern, or that this conduct caused the injury to the plaintiffs of which they complain. Hence they are entitled to recover damages under the RICO statute provided that a sole proprietorship can be an "enterprise" with which the proprietor can be "associated." We think it can be. The statute provides that " '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. Sec. 1961(4). A sole proprietorship is a recognized legal entity, and, provided it has any employees, is in any event a "group of individuals associated in fact." Since it is obvious from the name of the statute ("... and Corrupt Organizations") that the enterprises to which the statute refers include criminal enterprises, and not just legitimate enterprises penetrated or looted by criminals, it would be passing strange to exclude proprietorships. After all, we do not suppose that "Murder Inc." was really a corporation; and we cannot believe that Congress would have wanted gangsters to be able to escape the clutches of section 1962(c) just by avoiding the corporate form, the partnership, or other forms of association named explicitly in section 1961(4)--especially in light of the last part of subsection (4) (...
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Lockheed Martin Corp. v. Boeing Co.
... ... McCullough, II v. Suter, 757 F.2d 142, 144 (7th Cir.1985). Fictitious legal "distinctness," such as between an individual and his corporate self, is important ... ...
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Emcore Corporation v. Price Water House Coopers LLP
... ... Tellingly, the Jaguar Court quoted Seventh Circuit Judge Posner's observation in McCullough v. Suter , 757 F.2d 142, 144 (7 th Cir. 1985): "The only important thing is that it [the enterprise] be either formally (as when there is ... ...
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Fleischhauer v. Feltner
... ... Benny, 786 F.2d 1410 (9th Cir.), cert. denied, 479 U.S. 1017, 107 S.Ct. 668, 93 L.Ed.2d 720 (1986); McCullough v. Suter, 757 F.2d 142, 143-44 (7th Cir.1985). Clearly, the jury had ample basis to find that all defendants were collectively, the "enterprise." ... ...
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... ... denied, ___ U.S. ___, 109 S.Ct. 309, 102 L.Ed.2d 328 (1988); McCullough v. Suter, 757 F.2d 142, 144 (7th Cir.1985); Haroco, Inc. v. American National Bank and Trust Co., 747 F.2d 384, 399-402 (7th Cir.1984), aff'd on ... ...
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Racketeer influenced and corrupt organizations.
...F.2d 278, 283 (5th Cir. 1992) (finding sole proprietorship qualifies as individual and thus, as RICO "enterprise"); McCullough v. Suter, 757 F.2d 142, 143--44 (7th Cir. 1985) (finding sole proprietorship employing several people an (90.) See Securitron Magnalock Corp. v. Schnabolk, 65 F.3d ......
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Racketeer influenced and corrupt organizations.
...F.2d 278, 283 (5th Cir. 1992) (finding sole proprietorship qualifies as individual and thus, as RICO "enterprise"); McCullough v. Suter, 757 F.2d 142, 143-44 (7th Cir. 1985) (finding sole proprietorship employing several people an (92.) See Securitron Magnalock Corp. v. Schnabolk, 65 F.3d 2......
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Racketeer influenced and corrupt organizations.
...F.2d 278, 283 (5th Cir. 1992) (finding sole proprietorship qualifies as individual, and thus as RICO "enterprise"); McCullough v. Suter, 757 F.2d 142, 143-44 (7th Cir. 1985) (finding sole proprietorship employing several people an (80.) See Securitron Magnalock Corp. v. Schnabolk, 65 F.3d 2......
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Racketeer influenced and corrupt organizations.
...F.2d 278, 283 (5th Cir. 1992) (finding sole proprietorship qualifies as individual, and thus as RICO "enterprise"); McCullough v. Suter, 757 F.2d 142, 143-44 (7th Cir. 1985) (finding sole proprietorship employing several people an (82.) See Securitron Magnalock Corp. v. Schnabolk, 65 F.3d 2......