U.S. v. Goldin Industries, Inc., PLAINTIFF-APPELLEE

• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)
• Citation: 219 F.3d 1271
• Docket Number: PLAINTIFF-APPELLEE,No. 97-6163,DEFENDANTS-APPELLANTS,97-6163
• Parties: (11th Cir. 2000) UNITED STATES OF AMERICA,, v. GOLDIN INDUSTRIES, INC., GOLDIN OF ALABAMA INC., ET AL.,
• Decision Date: 27 July 2000

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219 F.3d 1271 (11th Cir. 2000) UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
GOLDIN INDUSTRIES, INC., GOLDIN OF ALABAMA INC., ET AL., DEFENDANTS-APPELLANTS. No. 97-6163. United States Court of Appeals, Eleventh Circuit. July 27, 2000.

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Appeals from the United States District Court for the Southern District of Alabama.(No. 95-00158-CR-5), Richard W. Vollmer, Jr., Judge.

Before Carnes, Barkett and Marcus, Circuit Judges.

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Barkett, Circuit Judge

Goldin Industries, Inc. ("Goldin Mississippi")¹, Goldin of Alabama, Inc. ("Goldin Alabama"), and Goldin Industries Louisiana, Inc. ("Goldin Louisiana") (collectively the "Goldin Corporations"), appeal their convictions for racketeering activities in violation of the Racketeer Influenced and Corrupt Organizations Statute ("RICO"), 18 U.S.C. § 1962(c), and conspiracy to engage in such activities in violation of RICO § 1962(d). The Goldin Corporations also appeal from the final judgment of forfeiture and order mandating restitution under 18 U.S.C. § 1963(a)(1) and (a)(3) of all proceeds obtained from the racketeering activity.

All three Goldin corporations are in the scrap metal business. They buy and then resell large quantities of ferrous metals such as steel as well as more valuable non-ferrous metals such as stainless steel, brass, copper, and aluminum. Goldin Mississippi was initially started by Rubin Goldin as a cow hide and scrap business in Biloxi, Mississippi in 1942. Rubin Goldin's son, Jack, took over that business in 1950, and three of Jack Goldin's four sons eventually joined the business. Alan ran the steel division and manufacturing, Steven was in charge of the non-ferrous division, and Martin administered the entire business. In 1987, the three Goldin sons purchased a failing scrap business in Mobile, Alabama, which was incorporated as Goldin Alabama. In 1990, Jack Goldin and the three sons opened a business in New Orleans, which was incorporated as Goldin Louisiana.

The Goldin Corporations and Jack, Martin, Alan, and Steve Goldin were all charged with violations of § 1962(c) in connection with their schemes to: (1) defraud their large-volume ("industrial") customers by systematically shortweighing these customers' loads of scrap; (2) cheat customers by hiding valuable non-ferrous scrap in loads of less-valuable ferrous scrap; and (3) inflate deductions for no-value scrap in loads of off-grade scrap and trash. In the case of each RICO allegation, the government charged the Goldin corporations with predicate acts, consisting of mail fraud, in violation of 18 U.S.C. §§ 1341 and 2. In short, each Goldin corporation was alleged to have violated RICO by sending invoices and checks to the customers who had been cheated in the Goldin Corporations' various schemes. The invoices and checks fraudulently misrepresented the amounts actually due to the victims of these schemes.

Ultimately, the jury acquitted the individual Goldin defendants but convicted all three Goldin corporations of racketeering in violation of 18 U.S.C. § 1962(c) (Count 1) ² and racketeering conspiracy under 18 U.S.C. § 1962(d) (Count 2). ³ Pursuant to

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18 U.S.C. § 1963(a)(1) & (3), which provide that any person convicted of violating any provision of § 1962 must forfeit to the United States any interest acquired or maintained in violation of § 1962, the government sought to obtain forfeiture judgments and restitution awards reflecting the amounts that each corporation had derived from its schemes. ⁴ After the subsequent one-day forfeiture trial, the district court sentenced all three corporations to five years probation. In addition, Goldin Alabama was fined $560,000.00, ordered to forfeit $219,849.22 and to pay restitution of $219,849.22 under RICO, 18 U.S.C. § 1963, ordered to forfeit $25,387.94 under the money laundering statute, 18 U.S.C. § 982(a)(1), and assessed $3800.00. Goldin Mississippi was fined $1,000,000.00, ordered to forfeit $419,835.18 and to pay restitution of $419,835.18 under RICO, and assessed $400.00. Goldin Louisiana was fined $1,000,000.00, ordered to forfeit $47,712.74 and to pay restitution of $47,712.74 under RICO, and assessed $400.00. The Goldin Corporations now appeal both their convictions under 18 U.S.C. § 1962(c) and (d) and the forfeiture and restitution judgments under 18 U.S.C. § 1963.

DISCUSSION

1. RICO Convictions under 18 U.S.C. § 1962(c) and (d)

The three Goldin Corporations raise only one challenge to their convictions. They argue that they constitute both the "person" and the "enterprise" referenced in 18 U.S.C. § 1962(c) and, therefore their convictions should be vacated. 18 U.S.C. § 1962(c) provides:

It shall be 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.

Thus, as the trial court correctly instructed the jury, to convict under § 1962(c), the government must prove: (1) the existence of an enterprise which affects interstate or foreign commerce, (2) that the defendant associated with the enterprise; (3) that the defendant participated in or conducted the enterprise's affairs; and (4) that the participation in or conduct of the enterprise's affairs was through a pattern of racketeering activities. See United States v. Weinstein, 762 F.2d 1522, 1536 (11th Cir.1985), quoting United States v. Phillips, 664 F.2d 971, 1011 (5th Cir. Unit B 1981).

A "pattern" of racketeering activity requires that a defendant commit two acts of racketeering activity within a ten-year period. 18 U.S.C. § 1961(5). Racketeering activity is defined as the commission of certain federal crimes, including for our purposes here, the crime of mail fraud pursuant to 18 U.S.C. § 1341. The terms "person" and "enterprise" in the statute have been specifically defined by Congress. A person liable under § 1962(c) is "any individual or entity capable of holding a legal or beneficial interest in property." 18 U.S.C. § 1961(3). An "enterprise" under the statute is "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. § 1961(4). Moreover, under our case law, a RICO enterprise need not possess an "ascertainable

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structure" distinct from the associations necessary to conduct the pattern of racketeering activity. Weinstein, 762 F.2d at 1537, n. 13 (rejecting the holding in United States v. Bledsoe, 674 F.2d 647, 665 (8th Cir.1982), requiring that the enterprise possess such a structure, distinct from the pattern of racketeering activities).

The Supreme Court has held that the existence of an enterprise "is proved by evidence of an ongoing organization, formal or informal, and by evidence that the various associates function as a continuing unit." United States v. Turkette, 452 U.S. 576, 583, 101 S.Ct. 2524, 69 L.Ed.2d 246 ( 1981). We have held that Turkette left intact this Circuit's holding in United States v. Elliott, 571 F.2d 880 (5th Cir.1978), ⁵ that the definitive factor in determining the existence of a RICO enterprise is the existence of an association of individual entities, however loose or informal, that furnishes a vehicle for the commission of two or more predicate crimes, that is, the pattern of racketeering activity requisite to the RICO violation. Id. at 898. See also United States v. Hewes, 729 F.2d 1302, 1311 (11th Cir.1984) ( "a RICO enterprise exists where a group of persons associates, formally or informally, with the purpose of conducting illegal activity"); United States v. Cagnina, 697 F.2d 915, 920-21 (11th Cir.1983) (upholding Cagnina's RICO conviction for his participation in an "informal criminal network engaged in racketeering activity").

In this case the Goldin Corporations argue that because each corporation is named as a defendant and is also included in the named enterprise, their convictions under 1962(c) must be vacated. We bifurcated the issues in this appeal so that the en banc court could consider the continued viability of United States v. Hartley, 678 F.2d 961, 988 (11th Cir.1982), which held that the same person or entity could be named as both the RICO person and the RICO enterprise under § 1962(c). Hartley has now been overruled by the en banc court. United States v. Goldin Industries, Inc., 219 F.3d 1268 (11th Cir.2000) (en banc ). Thus, to the extent that a defendant is both the "person" and the "enterprise," a conviction of that defendant under § 1962(c) now cannot stand.

The government argues, however, that in this case each corporate defendant is a person within the meaning of the statute and that the enterprise as it relates to each corporate defendant is not the same corporation, but rather the association of all the corporations along with the individual defendants. ⁶ The government contends that this group constitutes an entity distinct from each individual corporate defendant and is the enterprise within the meaning of § 1962(c).

Initially, we recognize that a defendant can clearly be a person under the statute and also be part of the enterprise. The prohibition against the unity of person and enterprise applies only when the singular person or entity is defined as both the person and the only entity comprising the enterprise. See Goldin Industries, Inc., 219 F.3d 1268; Yellow Bus Lines, Inc. v. Drivers, Chauffeurs & Helpers Local Union, 639, 883 F.2d 132 (D.C.Cir.1989), rev'd in part on other grounds, 913 F.2d 948 (D.C.Cir.1990) (en banc ); Puckett v. Tenn. Eastman Co., 889 F.2d 1481 (6th Cir.1989); Garbade v. Great Divide Mining and Milling Corp., 831 F.2d 212 (10th Cir.1987); Bishop v. Corbitt Marine Ways, Inc., 802 F.2d 122 (5th Cir.1986); Schofield v. First Commodity Corp., ...