COMMONWEALTH of Pennsylvania, Appellee, v. Steven A. BESCH, Appellant.
Supreme Court of Pennsylvania.
April 17, 1996
Reargument Denied June 5, 1996.
674 A.2d 655
Argued Dec. 6, 1994. Reargued Jan. 22, 1996.
Mary Benefield Seiverling, Harrisburg, Robert A. Graci, Harrisburg, Anthony Sarcione, Westchester, for Com.
Before NIX, C.J., and FLAHERTY, ZAPPALA, CAPPY, CASTILLE, NIGRO and NEWMAN, JJ.
OPINION OF THE COURT
CAPPY, Justice.
This case presents the Court with the question of whether the prosecution of a wholly illegitimate drug conspiracy which exhibits no legitimate purpose nor encompasses any elements
The instant action arose from an investigation by the Sixth Statewide Grand Jury into the drug trafficking operation of the Appellant in and around the Mifflin County area of Pennsylvania. The investigation commenced in 1987 and culminated on October 12, 1989 with the arrest of Appellant and the search of his home. During the search, police seized 16 one-half gram packets and four “eight ball” packets of cocaine with a street value of $2,360.00, cash totalling $1,332.00, scales, baggies, triangular packets commonly used for packaging drugs, 50 doses of LSD, marijuana residue, a roach clip and large sun lamps commonly used in drying marijuana leaves.
Based upon the information accumulated during the investigation and the items seized in the search, Appellant was charged with nine specific viоlations of the criminal code which included one count of violating Pa.C.O.A. and one count of conspiring to violate Pa.C.O.A., one count of conspiring to deliver a controlled substance, four counts of delivery of controlled substances, possession with intent to deliver a controlled substance and possession of a controlled substance.2
After a jury trial Appellant was convicted on all counts. The trial court sentenced Appellant to a cumulative term of imprisonment of 8 to 33 years and fines totalling $85,000. The Superior Court affirmed the convictions but reversed in part the judgment of sentence for a determination of Appellant‘s
During the course of the trial, the Commonwealth presented a significant number of witnesses, many of whom were members of the drug trafficking network which operated from Appellant‘s home. This testimony revealed a clearly defined operation wherein Appellant, and his primary conspirator, Douglas Woodward, had by specific agreement developed a business of distributing marijuana and cocaine. Woodward testified that he originally met Appellant in 1985 through a mutual acquaintance, Wayne Yohn, in order to purchase marijuana from Appellant. Yohn had previously supplied marijuana to Woodward, but as he had none available at the time, he referred Woodward to Appellant.
Shortly after their initial meeting Appellant and Woodward decided to go into business together. Each man put up an equal amount of cash and purchased one-half pound of marijuana which they divided into smaller packets for resale. Each man made $300 profit from this initial investment which they used to continue the operation. According to Woodward, they had a series of regular customers, which included Wayne Yohn, Jeff Herbster and Charlie Miller. As business continued Woodward and Appellant decided to add cocaine to their inventory in order to increase their profits. They also had a regular chain of suppliers which included Anthony Dalton, Ken Norton, and Jeff Holland. Woodward also testified that the cocaine they bоught was sold to their suppliers from one Garth Honsaker of Altoona.3
Woodward testified that Appellant handled all the money transactions and that it was Woodward‘s job to cut and package all the marijuana and cocaine for resale. All sales took place from Appellant‘s home, where Woodward used the extra bedroom for storage and packaging of controlled sub-
Miller was introduced to Appellant by Jeff Herbster in order to purchase cocaine. Miller had a criminal record and often was short of funds for drug purchases. Miller, knowing that Appellant collected guns, offered to exchange guns for drugs. Appellant agreed to the exchange and Miller subsequently burglarized a residence of one of Miller‘s own relatives and traded several of the stolen handguns with Appellant in exchange for cocaine. Miller was later arrested for the burglary and entered into an agreement with the prosecutor for a reduced penalty on the burglary and gun charges in exchange for his testimony against Appellant.
Following Miller‘s arrest several of Appellant‘s other “associates” were arrested and eventually testified against Appellant. In addition to the testimony of Woodward and Miller as described above, the following people offered testimony regarding their association with Appellant.
Ken Norton testified that Woodward introduced him to the Appellant. Norton was a regular supplier of cocaine to Appellant; all sales took place in Appellant‘s home. Norton made deliveries to Appellant at least once a week. Norton‘s profit from the enterprise was a portion of the cocaine for his personal use.
Dennis Moore testified that he was acquainted with Appellant as they were both gun collectors. Moore testified that he had occasionally sоld guns to Appellant and that he regularly purchased cocaine from Appellant in Appellant‘s home.
Daniel Wagner testified that he was a regular customer of Wayne Yohn and Jeff Herbster and that those two men introduced him to Appellant. Yohn and Herbster told Wagner that if they did not have cocaine when he needed it he could
Roy Marks testified that he was a regular customer of Miller and/or Yohn and on one occasion when neither of his regular suppliers had anything available they sent him to Appellant and he purchased marijuana. Marks also testified that he was in Appellant‘s residence оn one occasion when Yohn brought cocaine into the house. Marks observed Yohn put the cocaine in the basement unbeknownst to Appellant.
One of the most informative witnesses against Appellant was Dennis Knepp. Knepp was a regular cocaine user who had been arrested in 1986 for selling drugs for the notorious Honsaker. As a result of the 1986 arrest he entered into a plea agreement in federal court, agreeing to serve as an informant in exchange for probation.4 Knepp normally purchased his cocaine from Yohn. On one occasion when Yohn was unable to supply Knepp he introduced Knepp to Appellant. Knepp thereafter made all his drug purchases from Aрpellant. Knepp testified that he was in Appellant‘s home and observed Yohn, Herbster, Moore and Zannino all buying drugs from the Appellant. Knepp also testified that Appellant referred to the above named individuals as “his group” and bragged that they never “talked on” each other.
Michael Majestic testified that he was a regular user who contacted Louis Zannino for the purposes of purchasing cocaine. Zannino introduced Majestic to Appellant and Majestic, on at least one occasion, purchased cocaine from Appellant. Majestic also testified that at one time when he was in Appellant‘s home he observed Herbster give a large amount of cash to Appellant so that Appellant could purchase cocaine for Herbster.
Based on all the testimony as delineated above the Commonwealth argues that a drug enterprise existed which included Appellant, Knepp, Miller, Zannino, Herbster, Yohn,
As previously stated herein Appellant‘s participation in the above recited activities lead to his conviction on four counts of delivery of a controlled substance, one count of possession of a controlled substance, one count of conspiracy to delivery controlled substances and two violations of the Pa.C.O.A. statute.5 Specifically at issue in this case are the two Pa.C.O.A. violations of
(3) It shall be unlawful for any person employed by or associated with any enterprise to conduct or participate, directly or indirectly, in the conduct of such enterprise‘s affairs through a pattern of racketeering activity.
(4) It shall be unlawful for any person to conspire to violate any of the provisions of paragraph (1), (2) or (3) of this subsection.
Taking all of the evidence in the light most favorable to the Commonwealth, it is clear that an “enterprise” existed and flourished in Appellant‘s home centering around the business of buying and selling controlled substances for profit. It is сlear that Appellant was a member of the “enterprise” and agreed to participate in all of the activities of that enterprise along with his fellow associates. It was also clearly estab-
In arguing that this particular “enterprise” violates Pa.C.O.A., the Commonwealth focuses upon the definition within the statute of the word “enterprise.”
“Enterрrise” means any individual, partnership, corporation, association or other legal entity, and any union or group of individuals associated in fact although not a legal entity, engaged in commerce.
[
1 Pa.C.S.] § 1921. Legislative intent controls (a) The object of all interpretation and construction of statutes is to ascertain and effectuate the intention of the General Assembly. Every statute shall be construed, if possible, to give effect to all its provisions.
(b) When the words of a statute are clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit.
(c) When the words of the statute are not explicit, the intention of the General Assembly may be ascertained by considering, among other matters:
(1) The occasion and necessity for the statute.
(2) The circumstances under which it was enacted.
(3) The mischief to be remedied.
(4) The object to be attained.
(5) The former law, if any, including other statutes upon the same or similar subjects.
(6) The consequences of a particular interpretation.
(7) The contemporaneous legislative history.
(8) Legislative and administrative interpretations of such statute.
The intention of the General Assembly is clearly and sрecifically spelled out at great length in the Pa.C.O.A. statute.
§ 911. Corrupt organizations
(a) Findings of fact.—The General Assembly finds that:
(1) organized crime is a highly sophisticated, diversified, and widespread phenomenon which annually drains billions of dollars from the national economy by various patterns of unlawful conduct including the illegal use of force, fraud, and corruption;
(2) organized crime exists on a large scale within the Commonwealth of Pennsylvania, engaging in the same patterns of unlawful conduct which characterizes its activities nationally.
(3) the vast amounts of money and power accumulated by organized crime are increasingly used to infiltrate and corrupt legitimate businesses operating within the Commonwealth, together with all of the techniques of violence, intimidation, and other forms of unlawful conduct through which such money and power are derived;
(4) in furtherance of such infiltration and corruption, organized crime utilizes and applies to its unlawful purposes laws of the Commonwealth of Pennsylvania conferring and relating to the privilege of engaging in various types of business and designed to insure that such businesses are conducted in furtherance of the public interest and the general economic welfare of the Commonwealth;
(5) such infiltration and corruption provide an outlet for illegally obtained capital, harm innocent investors, entrepreneurs, merchants and consumers, interfere with free competition, and thereby constitute a substantial danger to the economic and generаl welfare of the Commonwealth of Pennsylvania.
There is no escaping the clear intent of this statute. The General Assembly went to great pains to set forth the parameters of this piece of legislation. Pa.C.O.A. is directed at preventing the infiltration of legitimate business by organized crime in order to promote and protect legitimate economic development within Pennsylvania. Although the Commonwealth acknowledges this to be the precise intent of the General Assembly in enacting Pa.C.O.A., they choose to ignore same. However, once the intent of the General Assembly has been ascertained that intent cannot be ignored, rather, it must be given effect. Hatfield v. Continental Imports, Inc., 530 Pa. 551, 610 A.2d 446 (1992); Frontini v. Commonwealth, Department of Transportation, 527 Pa. 448, 593 A.2d 410 (1991);
Without reference to the intent of this legislation the sрecific subsections that Appellant has been convicted under are difficult to comprehend.6 Following the Commonwealth‘s argument, what Pa.C.O.A. thus prohibits is any group of criminals from forming an association and engaging in any of the enumerated criminal acts at
In Commonwealth v. Bobitski, 534 Pa. 310, 632 A.2d 1294 (1993), this Court condemned a similar attempt by the Commonwealth to extend the reach of Pa.C.O.A. In that case, the defendant was an employee of a legitimate business, Thrift Drug, who used his position within the legitimate enterprise for personal gain through a pattern of illegal acts. There the Commonwealth urged this Court to endorse the position that “the organized systematic method by which the defendant committed his crimes brings him within the purview of the statute.” Id. at 313, 632 A.2d at 1296. In that case we rejected the Commonwealth‘s position, finding that their reading of Pa.C.O.A., which lifted chosen words out of context, violated the express intent of the General Assembly in enacting Pa.C.O.A.
In construing the intent of this statute we need not look beyond its actual words. The express intent was to prevent infiltration of legitimate businesses by organized crime. The corrupt organizations statute is a penal statute and must be strictly construed. Commonwealth v. Heinbaugh, 467 Pa. 1, 354 A.2d 244 (1976);
The arguments of the Commonwealth in the case at bar are just as disingenuous as the argument this Court rejected in Bobitski. Just as we declared in Bobitski that not all “organized” criminals fall within the scope of Pa.C.O.A., we similarly find that not all criminal “enterprises” are within the purview of Pa.C.O.A. The prohibited activity under this statute is the infiltration of legitimate business by a pattern of illegal acts. Pa.C.O.A. is not a tool by which the Commonwealth may attack any and every group of criminals who by chance happen to conduct their criminal activities in such a fashion that one or more of their offenses happens to fall within the list of crimes enumerated in Pa.C.O.A.
The Commonwealth in urging this Court to acсept their position asserts a strong public policy argument. The policy argument is that by targeting wholly illegitimate operations, such as the one at bar, the Commonwealth can cut off racketeering activity at its source. The Commonwealth reasons that the sale and distribution of illegal narcotics is a common method of producing revenue for organized crime, and that the illegally obtained revenue is then commonly used by organized crime to infiltrate legitimate business. Therefore, all illegal drug operations are organized racketeering operations awaiting the opportunity to infiltrate legitimate business and thus, a logical target of Pa.C.O.A.
In the case at bar the police begаn investigating Appellant and his “enterprise” in 1987. The investigation continued until Appellant‘s arrest in 1989. Nothing came to light during the entire investigation which would indicate an intention on the part of any individual within this particular “enterprise” to use their revenue from the drug sales to infiltrate any business within Pennsylvania. In fact all of Appellant‘s co-conspirators within the “enterprise” testified that they were drug users and each made their transactions within the ongoing distribution ring in order to get sufficient drugs to satisfy their own personal use. Thus, taking all of the evidence in the
To allow this conviction to stand in the absence of any proof connecting the criminal acts involved to the racketeering activity sought to be prohibited, regardless of the validity of the motive, would be a true distortion of Pa.C.O.A. Accordingly, Appellant‘s convictions under Pa.C.O.A. at
NIX, C.J., files a dissenting opinion which is joined by CASTILLE and NEWMAN, JJ.
NIX, Chief Justice, dissenting.
I believe that the Pennsylvania Corrupt Organizations Act (hereinafter “the Act“), encompasses illegitimate as well as
The Act defines a business enterprise as “any ... group of individuals associated in fact although not a legal entity....”
RICO is equally applicable to a criminal enterprise that has no legitimate dimension or has yet to acquire one. Accepting that the primary purpose of RICO is to cope with the infiltration of legitimate businesses, applying the statute in accordance with its terms, so as to reach criminal enterprises, would seek to deal with the problem at its very source.
Turkette, 452 U.S. at 591, 101 S.Ct. at 2532.
Turkette is but the capstone of a long line of federal cases which holds that the definition of “enterprise” in the federal statute includes illegitimate as well as legitimate enterprises.2
The majority‘s sole rationale for disregarding the plain language of the Act as well as the overwhelming weight of federal case law interpreting an identical provision in the federal statute is a single sentence in the preamble to the Act. Finding number (3) in the preamble to the Act states that “vast amounts of money and power accumulated by organized crime are increasingly used to infiltrate and corrupt legitimate businesses operating within the Commonwealth....”
In Turkette, the United States Supreme Court considered the preamble to the federal Racketeer Influenced and Corrupt Organizations statute, which is substantially similar to the preamble found in the Act, and rejected a claim that applying the federal statute to legitimate businesses was contrary to the legislative history. The Court concluded:
Considering this statement of the Act‘s broad purposes, the [narrow] construction of RICO suggested by respondent and the court below is unacceptable. Whole areas of organized criminal activity would be placed beyond the substantive reach of the enactment. For examрle, associations of persons engaged solely in “loan sharking, the theft and fencing of property, the importation and distribution of narcotics and other dangerous drugs” [84 Stat. 922-23] would be immune from prosecution under RICO so long as the association did not deviate from the criminal path. Yet these are among the very crimes that Congress specifically found to be typical of the crimes committed by persons
involved in organized crime ... and as a major source of revenue and power for such organizations.
Turkette, 452 U.S. at 589, 101 S.Ct. at 2531.
I agree with the reasoning of the United States Supreme Court. The majority, in footnote 8 of its opinion, suggests that the Act can be distinguished from the federal statute because our statute has a “lengthy and specific preamble which clearly delineates the intended scope of the legislation.” Majority Opinion at 13 n. 8. However, the preambles to both statutes are substantially the same. This similarity reflects the fact that the Act “is based upon Chapter 96 of Title 18 of the United States Code, 18 U.S.C. §§ 1961-1968, entitled Racketeer Influenced and Corrupt Organizations (RICO).” Commonwealth v. Yacoubian, 339 Pa.Super. 413, 419, 489 A.2d 228, 231 (1985). A closer examination of the two statutes reveals that four of the five findings of fact in the preamble to the Pennsylvania statute were taken almost verbatim from the federal statute, including finding (3) so heavily relied upon by the majority.3 Thus, our statute simply does not contain
In fact, just one year ago, a plurality of this Court stated in Commonwealth v. Wetton, 537 Pa. 100, 641 A.2d 574 (1994): “[W]e find that neither the preamble nor the express language of the statute prevents its proscription from reaching enterprises organized and existing for illegal purposes.” Id. at 112 n. 5, 641 A.2d at 579 n. 5. (Opinion in Support of Reversal of Zappala, J., joined by Flaherty and Cappy, JJ.) (citing Commonwealth v. Yacoubian, 339 Pa.Super. 413, 489 A.2d 228, 231
with
The General Assembly finds that:
(1) organized crime is a highly sophisticated, diversified, and widespread phenomenon which annually drains billions of dollars from the national economy by various patterns of unlawful conduct including the illegal use of force, fraud, and corruption;
(2) organized crime exists on a large scale within the Commonwealth of Pennsylvania, engaging in the same patterns of unlawful conduct which characterizes its activities nationally;
(3) the vast amounts of money and power accumulated by organized crime are increasingly used to infiltrate and corrupt legitimate businesses operating within the Commonwealth, together with all of the techniques of violence, intimidation, and other forms of unlawful conduct through which such money and power are derived;
(4) in furtherance of such infiltration and corruption, organized crime utilizes and applies to its unlawful purposes laws of the Commonwealth of Pennsylvania conferring and relating to the privilege of engaging in various types of businesses and designed to insure that such businesses are conducted in furtherance of the public interest and the general economic welfare of the Commonwealth;
(5) such infiltration and corruption provide an outlet for illegally obtained capital, harm innocent investors, entrepreneurs, merchants and consumers, interfere with free competition, and thereby constitute a substantial danger to the economic and general welfare of the Commonwealth of Pennsylvania;
I believe that the conduct of our General Assembly is more revealing of their intent than a preamble heavily borrowed from the federal statute. I find persuasive the inaction of the General Assembly in light of the overwhelming judicial interpretation of “enterprise” including illegitimate enterprises within the reach of Racketeer Influenced and Corrupt Organizations statutes. In addition to the United States Supreme Court and numerous lower federal courts, our Superior Court rendered such an interpretation in Commonwealth v. Yacoubian, 339 Pa.Super. 413, 489 A.2d 228 (1985). In Yacoubian, a panel of our Suрerior Court held: “This section enables law enforcement to reach the criminal enterprise which has no legitimate dimension or has yet to achieve one.” Id. at 420-21, 489 A.2d at 231. Presumably aware of the case law in the federal courts and throughout the country, the General Assembly amended the Act in 1974, 1978, 1980, and 1990. Each time, the General Assembly failed to alter section 911 to limit its reach to only legitimate businesses. To me, this inaction on the part of the General Assembly is more revealing of its intent than the single sentence of the preamble quoted by the majority. In fact, the course suggested by the majority is so contrary to the generally accepted interpretation of Racketeer Influenced and Corrupt Organizations statutes, that I beliеve the General Assembly would have clearly and strenuously indicated its departure from the norm. Its failure to do so strongly suggests agreement with the generally accepted interpretation offered by our Superior Court and the federal courts.
For the reasons set forth above, I must dissent from the majority‘s departure from the widely recognized principle that illegitimate enterprises are within the reach of Racketeer Influenced and Corrupt Organizations statutes and its decision to chart an ill-conceived new path in this area of the law.
CASTILLE and NEWMAN, JJ., join in this dissenting opinion.
Notes
The Congress finds that (1) organized crime in the United States is a highly sophisticated, diversified, and widespread activity that annually drains billions of dollars from America‘s economy by unlawful conduct and the illegal use of force, fraud and corruption; (2) organized crime derives a major portion of its power through money obtained from such illegal endeavors as syndicated gambling, loan sharking, the theft and fencing of property, the importation and distribution of narcotics and other dangerous drugs, and other forms of social exploitation; (3) this money and power are increasingly used to infiltrate and corrupt legitimate business and labor unions and to subvert and corrupt our democratic process; (4) organized crime activities in the United States weaken the stability of the Nation‘s economic system, harm innocent investors and competing organizations, interfere with free competition, seriously burden interstate and foreign commerce, threaten the domestic security, and undermine the general welfare of the Nation and its citizens; and (5) organized crime continues to grow because of defects in the evidence-gathering process of the law inhibiting the development of the legally admissible evidence necessary to bring criminal and other sanctions or remedies to bear on the unlawful activities of those engaged in organized crime and because the sanctions and remedies available to the Government are unnecessarily limited in scope and impact.
(3) It shall be unlawful for any person employed by or associated with any enterprise to conduct or participate, directly or indirectly, in the conduct of such enterprise‘s affairs through a pattern of racketeering activity.
(4) It shall be unlawful for any person to conspire to violate any of the provisions of paragraph (1), (2) or (3) of this subsection.