U.S. v. Parise, 97-1740

• Decision Date: 28 October 1998
• Docket Number: No. 97-1740,97-1740
• Citation: 159 F.3d 790
• Parties: 159 L.R.R.M. (BNA) 2670 UNITED STATES of America, Appellee, v. Louis PARISE, Jr., Appellant.
• Court: U.S. Court of Appeals — Third Circuit

Page 790

159 F.3d 790

159 L.R.R.M. (BNA) 2670

UNITED STATES of America, Appellee, v. Louis PARISE, Jr., Appellant.

No. 97-1740.

United States Court of Appeals Third Circuit.

Argued April 27, 1998.

Decided Oct. 28, 1998.

Bruce A. Franzel, Oxenburg & Franzel, Philadelphia, PA, for Appellant, Louis Parise, Jr.

Timothy R. Rice, Office of United States Attorney, Philadelphia, PA, for United States.

BEFORE: ALITO, GARTH, and RENDELL, Circuit Judges.

OPINION OF THE COURT

RENDELL, Circuit Judge.

On January 29, 1997, Louis Parise Jr. and his father, Louis Parise Sr., were convicted of various crimes arising out of their involvement with the National Maritime Union ("NMU"). Parise Jr.'s RICO conviction under 18 U.S.C. § 1962(c) was predicated on his violation of the Pennsylvania commercial bribery statute, 18 Pa.C.S.A. § 4108(c). Specifically, Parise Jr. was found to have delivered cash bribes to two "port agents" in exchange for their referral of union members with personal injury cases to Parise Jr.'s employer, the Sacks law firm.

On appeal Parise Jr. argues that there was insufficient evidence to support his RICO conviction. He also contends that his actions did not constitute commercial bribery under Pennsylvania law. We disagree with his view as to how the law should be applied to the facts of this case, and find that the evidence was sufficient to support his conviction. Parise Jr. also challenges the district court's exclusion of certain testimony relating to the commercial bribery charge. We find this argument to be similarly unavailing. We will thus affirm the order of the district court.

I.

The convictions at issue in this case arose out of an extensive government investigation of corruption within the NMU and several related organizations. The NMU represents merchant marine seafarers who work on commercial shipping vessels. One of the improprieties revealed through the government's investigation was a bribery scheme devised and implemented by Louis Parise Sr., the President of the NMU, his son, Louis Parise Jr., and attorneys Avrem Adler and Bernard Sacks. ¹ Through this plan, developed in 1988, port agents and other union employees provided Sacks with personal injury case referrals in exchange for cash payments. ² As part of the scheme, Parise Jr. was hired as an "investigator" for the Sacks law firm and was responsible for delivering the bribes to the port agents. Parise Sr. promised these legal referrals to Sacks in exchange for a kickback of 5% of the legal fees generated through NMU cases. In 1992, a Legal Services Plan ("LSP") was created through which attorneys were to provide low or no cost legal services to union members. It was hoped that these members would then be more likely to retain designated attorneys, including Sacks, for their more lucrative cases. Parise Jr. was named as "co-administrator" of the LSP.

Sacks cooperated with the government investigation and during the trial testified at length about the bribery scheme. Sacks explained that Parise Jr.'s role was to pay port agents in particular cities a set fee for referral of personal injury cases to the Sacks firm. Several port agents, including Floyd Jones, John Pegan, and Debra Rywelski, ³ testified about the money paid to them by Parise Jr. for these case referrals. Other witnesses provided additional evidence relating to Parise Jr.'s role in the NMU and in carrying out the bribery scheme. After a three week trial, the jury found Parise Jr. guilty of the RICO violation, of Travel Act violations and of RICO forfeiture. The RICO conviction was based on the jury's finding that Parise Jr. had bribed Pegan and Rywelski in violation of Pennsylvania's commercial bribery statute. The district court denied Parise Jr.'s post-trial motion for acquittal or a new trial, and Parise Jr. appeals the judgment of conviction entered on September 11, 1997. This court has jurisdiction to review the final judgment of the district court pursuant to 28 U.S.C. § 1291.

The jury verdict in this case "must be sustained if there is substantial evidence, taking the view most favorable to the Government, to support it." Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 86 L.Ed. 680 (1942). See United States v. Aguilar, 843 F.2d 155, 157 (3d Cir.1988). To the extent that Parise Jr.'s arguments raise issues of statutory interpretation, our review is plenary. See United States v. Hayden, 64 F.3d 126, 128 (3d Cir.1995).

II.

A. RICO violation

Parise Jr. offers two related challenges to the sufficiency of the evidence which sustained his conviction under RICO. First, Parise Jr. argues that the government failed to adequately connect him with the indicted "enterprise" because several of the racketeering acts charged in the indictment were committed prior to the existence of the Legal Services Plan, and even those acts which occurred after the formation of the LSP were not directly linked with his role in the LSP. Secondly, Parise Jr. contends that the government failed to demonstrate that he participated in directing the affairs of the enterprise as required to sustain a RICO conviction. In addition, Parise Jr. challenges the district court's jury instruction relating to the requisite showing that must be made to establish "association" under RICO.

1. Connection with an "enterprise"

The RICO statute provides that "it shall be unlawful for any person employed by or associated with any enterprise engaged in ... 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." 18 U.S.C. § 1962(c). A conviction under this statute requires that the government prove the following four elements:

(1) the existence of an enterprise affecting interstate commerce; (2) that the defendant was employed by or associated with the enterprise; (3) that the defendant participated, either directly or indirectly, in the conduct or the affairs of the enterprise; and (4) that he or she participated through a pattern of racketeering activity.

United States v. Console, 13 F.3d 641, 652-53 (3d Cir.1993) (citation omitted).

The statute defines an enterprise as "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). The indictment in this case charged that four legal entities made up the RICO enterprise: (1) the National Maritime Union ("NMU"); the NMU Pension and Welfare Plan; (3) the Committee for the Administration of the NMU; and (4) the Legal Services Plan ("LSP").

Parise Jr. contends that because the government alleged in the indictment that the enterprise--which we will call the "NMU Enterprise"--was comprised of four organizations, no "enterprise" could have existed prior to September 1992, when the fourth organization, the LSP, was created. Therefore, Parise Jr. asserts, alleged illegal activity which took place before September 1992 cannot properly serve as the basis for his RICO liability. ⁴

Parise Jr.'s argument fails to appreciate the nature of an "enterprise" as defined by the RICO statute. The four organizations were included in the indictment because all were channels through which illegal activity was taking place and through which the NMU Enterprise operated. This does not mean, however, that no illegal activity of the enterprise could occur prior to the existence or entry of one of the indicted entities. In order to establish the existence of an "enterprise" for the purposes of RICO, the government must demonstrate that there is "an ongoing organization" whose "various associates function as a continuing unit." See United States v. Riccobene, 709 F.2d 214, 221 (3d Cir.1983) (citing United States v. Turkette, 452 U.S. 576, 583, 101 S.Ct. 2524, 69 L.Ed.2d 246 (1981)). However, "continuity does not require that each member of the enterprise participate in it from beginning to end." United States v. Feldman, 853 F.2d 648, 659 (9th Cir.1988); see United States v. Hewes, 729 F.2d 1302, 1310-11 (11th Cir.1984) (rejecting the argument that government must prove participation of all members throughout the life of the enterprise). Rather, the government must demonstrate that all alleged members who participated at one time or another were part of an ongoing enterprise with a shared "organizational pattern" and "system of authority." United States v. Lemm, 680 F.2d 1193, 1199 (8th Cir.1982).

The evidence adduced at trial demonstrated that the NMU Enterprise existed prior to September 1992 and that upon its formation, the LSP became part of the ongoing enterprise which satisfied the organizational and structural requirements of Riccobene, 709 F.2d at 221. The LSP was developed as another method of generating personal injury cases; the pursuit of these cases was already an activity of the NMU Enterprise. The major participants in the enterprise remained essentially the same from 1988 on, demonstrating the continuity of the enterprise. The testimony showed that during this period Louis Parise Sr. was the "system of authority" which united all of the organizations which formed the NMU Enterprise: the elder Parise had relatively unfettered discretion to direct both the legal and illegal activities of the union and its related organizations. Because the NMU Enterprise existed before the formation of the LSP, Parise Jr.'s actions prior to 1992 could properly form the basis for his RICO conviction.

Parise Jr. next asserts that all of the racketeering charges--even those relating to post-1992 activity--are deficient because the government failed to connect any of his alleged acts of bribery with his position as co-administrator of the LSP. Parise Jr. contends that his actions taken while he was an investigator for the Sacks law firm cannot form the basis for his RICO conviction because the law firm was...