*1 America, UNITED STATES
Plaintiff-Appellee, MARTINO, Joseph Russello C.
Sam C. Rodriguez,
and Rolando Gonzalez
Defendants-Appellants.
No. 78-3611. Appeals, Court
United States
Fifth Circuit.* 2, 1982.
Aug. Fla., Winkles, for Mar- Tampa,
D. Frank tino. LaPorte, Fla., for Tampa,
Raymond E. Russello. Fla., Macaluso, for Ro- Tampa,
Peter N. driguez. Hill, Jus- Atty., Dept, of Sp.
Elеanor J. Criscitelli, tice, Fla., Dept, Tampa, Sara C., Justice, D. U. S. Washington, III, D. Washington, Taylor, William W. C., for amicus curiae. GODBOLD, Judge, Chief
Before CLARK, RONEY, BROWN, CHARLES RUBIN, TJOFLAT, HILL, FAY, GEE, KRAVITCH, VANCE, FRANK M. JOHN HENDERSON, REAVLEY, SON, Jr., POL ANDERSON, HATCHETT, RAN ITZ, JOHNSON, TATE, DALL, D. THOM SAM CLARK, and GAR- A. WILLIAMS AS WOOD, Judges.** Circuit HILL, Judge: C. Circuit JAMES rehearing en banc in this We granted “interest” whether the term case to decide 1963(a)(1), the crimi- as used in 18 U.S.C. § * Judgeship case, 9(1) Subsequently, of Public banc. Omnibus Fifth section Former Circuit 96-452, Bill, (95th Congress) was Law 95-486 Law October Public this, approved In view of October ** Reynaldo Judge participate Judge was a member of the deci- G. Garza in this does not Garza 46(c) and court under 28 U.S.C.A. en banc sion. argument participated en in the oral of the case
953 the Following burning, a ring. provision of Racketeer forfeiture nal proof stat- filed an inflated Corrupt Organizations building owner Influenced and 1961-1968,1 in- 18 (RICO), collected insurance §§ ute statement and loss a or derived from income cludes his co-conspirators proceeds from activity. Specifi- racketeering Later, ring bought members paid. were forfeitability is the at issue in this case cally secured in- buildings burning, for suitable obtained of insurance and, a excess after surance in of value district court ring. of an arson The conduct burning, made claims for loss and statutory construc- question resolved this proceeds. divided the appeal favor. On government’s tion the ba- Id. 380. These activities formed panel monetary a of this court reversed charging twenty-three sis for an indictment now the de- We affirm forfeiture orders.2 fraud,4 conspiring mail to defendants with by the trial court. cision reached RICO,5 viola- violate and substantive RICO sixteen de- Following jury trial tions.6 I guilty were found and sentenced fendants indictment, surrounding the The facts of imprisonment.7 to terms Pursu- varying various prosecution, and conviction of the ant Federal Rule of Criminal Procedure panel set in detail in the defendants are out was then sub- 31(e),8 question the forfeiture 378-80, app. 409-11 opinion, 648 F.2d at special verdict on jury mitted to the group the evidence showed Briefly, or sub- property the extent of purpose associated for the individuals оrdered four ject jury to forfeiture. The de- the intent committing arson with as forfeit monies received defendants to This companies. insurance associa- fraud upon the successful payments insurance composed of an enterprise,3 tion in fact properties: their Paul Guarino— burning of homeowners, promoters, adjuster, $2,500.00;9 $4,000.00; C. Sam investors, arsonists, operated destroy Martino— Rodriguez $4,266.83; and Jo- G. Rolando and commercial eighteen at least residential — $340,043.69. Concluding Miami, seph C. Tampa Florida properties Russello— reach The was intended to April 1976. July between 1973 operations as panel ring’s summarized the in an not interests follows: activi- profits or income monetary these for- reversed ty, panel only burned build- At first the arsonists F.2d at 409.10 by those associated feitures. 648 ings already owned Organized provides: or IX the rule “If indictment 1. RICO constitutes Title 8. That 1970, Pub.L.No.91-452, alleges that an interest Act of Crime Control information forfeiture, special subject ver- 84 Stat. 941 to criminal as to the extent be returned dict shall Martino, 2. F.2d 407- v. 648 forfeiture, subject if interest any.” 1981), part (5th on other 09 Cir. vacated Holt, grounds 650 sub nom. United States (5th 1981)(conviction defend- 651 Cir. F.2d ant Holt mooted discussion of 9. also ordered to forfeit Martino was Defendant death). panel’s by his companies, ownership two Ybor interests in his print- was not forfeiture issue Corpo- Company S Investment and M & Loan grant reporter due to our ed in federal these, provided companies Both of ration. funds for the arson and panel rehearing appears in full en banc. That section fraud schemes. sheets, slip op. at 8274-76 in the advance Cir. June interests, these the forfeiture of affirmed 19, 1981). aspect propriety F.2d at 409. questioned on not been order has forfeiture 1961(4)(1976). 3. 18 U.S.C. rehearing. 4. 18 U.S.C. § 10. This did not affect reversal 1962(d)(1976). 5. Guarino, against as he did defendant order appeal from that order. file a notice 1962(c)(1976). 6. 18 U.S.C. § F.2d at n.19. F.2d at 379 n.1. of the latter straightforward II 1963(a)(1) reaches us: already tells A from violation interest derived statutory issue of of this Resolution analysis begin with must construction “inter of the term No definition itself. Bread of the statute *3 language must assume in RICO. We appears est” v. Federal Election Political Action Committee by purpose expressed is legislative “that the Commission, - U.S. -, -, 102 the words used.” ordinary meaning of 1237, (1982) 432 1235, 71 L.Ed.2d S.Ct. 1, States, 9, 82 369 U.S. Richards v. United v. Rohm & Co. (quoting Dawson Chemical 585, 492 The com 7 L.Ed.2d S.Ct. 187, 2601, 176, 100 Co., 448 S.Ct. Haas U.S. term definition of the dictionary mon or the ab 2608, (1980)). 65 L.Ed.2d title, or share in some “right, legal includes in legislative clearly expressed sence of “a profit, advantage, in thing; participation language contrary,” plain tention to the Third New Webster’s responsibility.” and its construction. of the statute controls It Dictionary 1178 - International U.S. -, (quoting at 1238 102 S.Ct. general as most has also been defined “[t]he v. Safety Comm’n GTE Consumer Product to denote a employed term that can be 108, 2051, 102, S.Ct. Sylvania, U.S. claim, title, legal or share some right, 2056, (1980)). Under 18 64 L.Ed.2d Dictionary (5th ed. thing.” Black’s Law 1963(a), a who defendant concept is therefore broad 1979). The 1962 . .. any provision violates of section In or income. enough profits to include (1) any forfeit to the United shall States deed, with the understanding comports or maintained in acquired interest he has “interest” as (2) any in- definition of Report’s violation of section House in, of, interests, security against, terests claim or as “all inclusive of right any or contractual kind described, which are related to broadly posely lar prise. omits it in another section tion that “where sion.” United F.2d forfeitable interests to those in struction in the Rather, interest” feitable interests to those RICO’s Significantly, On ... pated in enterprise section 1962. affording ated, controlled, conducted, language face, Guiding prohibitory the statute a § which he has in one section of disparate source of § 1963(a)(1) acts our efforts at past conduct is Congress Cir. provision, speaks broadly intentionally has been the product 1972).11 influence inclusion or exclu- Wong of, does not limit for- established, oper- of the same in an enterprise. includes expressly in violation of statutory section 1962. Kim statute or Hence the an enter- presump- over, any violating particu- Bo, 472 partici- limits “any pur- Act, con- but Thus eteering members of such conduct affairs of defendants’ section makes it unlawful for tion case were est,” 2d ceeds within the Cong. & Ad.News violations.” .. . associated 1963(a)(1) supports the Not racketeering activity Sess. 1962,” enterprise’s but the or offenses of arson “acquired participate is the as § violation of the arson unambiguous H.R.Rep.No.1549, reprinted proceeds enterprise through affairs plain 1963(a)(1) requires. concept were the ... ... ring meaning of “inter- .... in violation of sec- view that § and mail fraud. question [1970] ” 1962(e). That product conducted the conduct of profits language “any person In this the rack- U.S.Code pattern or ... Cong., case, pro- racketeering ac- derived from 1963(a)(2), limitation in absence subject to forfeiture. 1963(a)(1), of limitation in confirm what tivities are infra, 1963(a) presumption the form before it assumed 11. As shall is made to § we note fully by revisions in which it was enacted. borne out in this case First, it ever, respects. in several flawed maintain amicus12 Defendants and 1962(c). lan- completely ignores un- interests forfeitable their position—that 1963(a)(1)ties forfeiture vio- guage to interests 1963(a)(1)are limited der § prohibitory provisions lation lan- supported —also just (b).14 not in § §§ analysis of the Their the statute. guage of scrutiny. cannot withstand statute Second, argument of defendants and inter- on forfeitable only express limitation of the ref- amicus misconstrues the function of the statute ests imposed To be erence “acquired be that the interest must itself is sure, limiting serves a kind of reference 1962.” of section in violation function, maintained that function define but however, amicus, read interests, Defendants forfeitable as defend- type Spe- language. Rather, limitation into this assume. the refer- further ants and amicus acquires that “one identifies the activities cifically they argue merely ence *4 penalty, sup- in of the forfeiture trigger an violаtion Section which maintains interest an the RICO viola- the nexus between acquires plying or maintains when he which the 1962(a) and forfeitable tion of Sections interest in contravention at trial.15 must establish (em- government at 7 (b).” or Brief for Amicus Curiae 1962(a) added). proscribes phasis Briefly, § Third, reading enterprise limitation an illegally derived or investment of the use 1963(a)(1)renders that section sur- into § establish, operate an acquire, or income to 1963(a)(2)on its face re- plusage. Section use 1962(b) enterprise, prohibits while § in “any interest ... quires forfeiture main- racketeering acquire methods to or which any enterprise defendant] [the enterprise.13 in an Accord- tain an interest conducted, established, controlled, operated, and amicus ingly, argue, the defendants of, conduct in viola- or participated prohibitory provisions link establishment, between 1962.” The tion of section 1962(a) acquiring refer to (b), and which clearly re- §§ and control operation, violations, penal maintaining or and the and 1962(a) (b). fers to violations of §§ to 1963(a)(1), duplica- which refers be provision 1963(a)(1) merely would § if, viola- as defendants con- “acquired provision or maintained” in tive of this interests an RICO, tend, only interests in enter- is how- it reaches reasoning, tion clear. This proceeds from a violation of of Criminal De- not reach derived 12. The National Association Lawyers, permitted partici- 1962(c). Inc. was fense pate § rehearing. as amicus curiae Again, also infected the this second error provide: pertinent part these sections reasoning in Thevis. That court district court’s any person (a) who It shall unlawful for be opined: derived, directly any or income has received indirectly, “enterprise” Since it is the addition racketeering pattern ac- from a prosecu- concept distinguishes a RICO which tivity through of an or collection unlawful ordinary an 1962 from tion 18 U.S.C. § under invest, directly or indirect- debt ... use or prosecution individual at each of the directed income, ly, any part or the of such predicated acts which constitute [sic] income, any acquisition of such activity, racketeering pattern Court is of, any in, operation or the establishment or subject to for- the “interest” convinced that enterprise engaged in or activi- which is 1963(a) is limited to affect, foreign § feiture under U.S.C. or of which interstate ties enterprise does not and the interest commerce.... any person generated (b) from the for or It shall be unlawful extend to fruits activity through racketeering enterprise. or Thevis, enterprise F.Supp. of an unlawful debt collection That the at 142. maintain, indirectly, directly acquire RICO, or overriding concept or concept dis- is the any enterprise any interest control of in or prosecution tinguishing from an ordi- in, engaged or the activities predicate nary prosecution of rack- acts affect, foreign commerce. interstate necessarily eteering, mean does 1962(a), (b) (1976). §§ enterprise concept оn the a limitation also subject type interests Thevis, in United States v. 14. The district court 1963(a)(1). under § F.Supp. (N.D.Ga.1979), fell into this concluding 1963(a)(1) does § same error major portion organized crime derives prise acquired or maintained violation of 1962(a) (b). power through money of its obtained §§ syndicated endeavors as from such reasoning The cure for these defects in the theft gambling, sharking, loan of the effect lies in an examination fencing importation property, 1963(a)(1) 1962(c) on a violation. Sec- § § of narcotics and other dan- distribution 1962(c) conducting tion makes other forms of social gerous drugs, and through pattern unlawful. exploitation; (3) power money therefrom, The forfeiture resulting under are used to infiltrate and increasingly 1963(a)(1), (or interests) is the interest § corrupt legitimate business and labor un- through or as a result of that acquired corrupt ions and to subvert and our dem- unlawful conduct. Forfeiture of defend- processes; (4) organized ocratic crime ac- governed ant’s interest in the weaken the tivities in the United States (2) impact upon stability system, of the Nation’s economic 1962(a) (b). 1962(c) If results in competing harm innocent investors and 1963(a) pro- forfeiture at all—and organizations, compe- interfere with free if vides for forfeiture one violates tition, burden interstate and seriously provide 1962 section—it must for forfei- commerce, foreign threaten domestic ture of more than something security, general and undermine the wel- (b) surplusage. interpreta- or be mere This fare of the and its citizens .... Nation tion restores to a role in the *5 penalty played scheme different from that 1970, Organized Crime Control Act of Pub. 1963(a)(2)and accords with the unam- L.No.91-452, (1970)(empha 84 Stat. 922-23 biguous language of the former section. added). sis Having problem, identified
Congress also determined the cause for the
justice system’s
failure to make
B
organized
inroads on
crime and its economic
Turning
language
now
of the
from
power
proposed
base and
the cure it envi
statute itself to exрressions
legislative
of
sioned the new Act to embody.
intent, we find confirmation for our view
[Sjanctions and remedies available to the
reaches
derived
unnecessarily
Government are
limited in
racketeering activity.16
In
State-
scope
impact.
Findings
Purpose prefatory
ment
of
1970,
the Organized
Act of
Crime Control
It
Act
purpose
is the
of this
to seek the
Congress spoke
problem sought
of the
it
organized
eradication of
crime in the
resolve
following
words:
by strengthening
legal
United States
(1) organized crime in the
evidence-gathering process,
United States
tools in the
diversified,
is a highly sophisticated,
by establishing
penal prohibitions,
new
widespread activity
annually
drains
by providing
enhanced sanctions and
billions of dollars from
econo-
America’s
new
remedies to deal with
unlawful
my by unlawful conduct and the illegal
activities
engaged
organized
of those
force, fraud,
use
(2)
corruption;
crime.
government
suggested
ambigui
directs our attention to
conflict because we find no
clause, arguing
ty
RICO’s liberal construction
in the statute which would occasion the
provides
guide
proper
it
interpretation
interpretive
a definitive
to the
invocation of either of these
aids.
1963(a)(1).
lenity “only
In that clause
The rule of
aid
serves as an
Congress
provisions
resolving
ambiguity.”
has mandated that
an
v. United
“[t]he
Callanan
liberally
States,
587, 596,
321, 326,
shall be
construed to effec-
[RICO]
364 U.S.
81 S.Ct.
purposes.” Organized
(1961);
McElroy
tuate its remedial
Crime
L.Ed.2d 312
see
v. United
-
1970, Pub.L.No.91-A52,
States,
-,
-,
Control Act
U.S.
102 S.Ct.
904(a),
(1970).
response
84 Stat. 947
In
Id.
on the sources of economic
attack
pronged
on
bill reiterated
Report
Committee
feed
coffers and activities
power which
philosophy.
both dives-
organized crime.
It demands
here,
be-
is needed
the committee
What
itself18
over the
power
titure of
lieves,
that will deal
approaches
new
are
derived from
and seizure of
income
individuals,
also with
but
racketeering activities.
those
through
base
the economic
a serious
constitute
such
individuals
Organized
From the debates on the
Crime
being
threat
to the economic well
Act,
target
Control
clear
short, an
must be
Nation.
attack
op-
Congress’
attack included
power
of economic
made on their source
type
the chief
erations in which
itself,
place
take
and the attack must
crime would
organized
interest obtained
fronts.
all available
ownership
be
other than an
something
(1969)
Cong., 1st
S.Rep.No.617, 91st
Sess.
example,
interest.19 For
proprietary
Congress’
added). Simply put,
(emphasis
history
to instances
legislative
refers
objective in
is to take the
express
members
organized
crime
infiltrate
crime.17
profit
organized
out of
businesses,
compa-
legitimate
“bleed” these
theft, and
force
nies
fraud or
thus
provisions
The criminal
bankruptcy.20 Organized
them
crime
objec-
central
this remedial
into
are
nied,
history
legislative
replete
101 S.Ct.
was also It (1970) (remarks enterprise. in an frauds, Cong.Rec. 970 to interests property Bible), theft from welfare and to of Sen. in full: read funds, Cong.Rec. pension of section any provision violates Whoever McClellan). The (1969) (remarks of Sen. fined not shall be chapter 1962 of this arson examples of Report cited Senate more $10,000 not imprisoned than or more schemes, liqui- in the context particularly both, shall twenty years, than or by burn- loan shark debts dating defaulted interest in to the United States all forfeit collecting the ing the debtor’s in, the activi- engaged or enterprise 91st S.Rep.No.617, proceeds. insurance affect, foreign ties of which interstate also 115 1st See Cong., Sess. commerce. (1969) (remarks of Sen. Cong.Rec. In Cong., 1st Sess. S. 91st loan trafficking, McClellan). Narcotics mid-October, however, Judiciary the Senate extortion, fraud, gam- sharking, a revision of RICO. Out began Committee in which crimes bling, prostitution —all developed of the revision a section money— consist of proceeds primarily 1963(a)(2) containing subparts. two congressional concern.21 objects were all limiting concept retained the addition, en- as here the RICO In when enterprise. in an to a defendant’s fact, rather terprise is an association hand, section On the other alleged and the legal entity, than a altogeth- limitation dropped the affairs of this conducting violation is persuasive Congress er. We find methods, racketeering enterprise through limiting all forfeitures under considered may there often be no forfeitable but, interests after ex- RICO to ill-gotten proceeds. other than the Such work, opted to legislative ultimately tensive the cаse not with arson-for- be this across-the-board restriction. delete profit rings also with narcotics traffick- but examining legislative his- Finally, in It ing pornography operations. would we address one of the chief rea- tory must Congress’ certainly contrary be stated for its conclusion panel sons cited organized attack crime’s source intention to the insur- does not reach fronts,” of economic “on all available power August ance issue here. 1st S.Rep.No.617, Cong., Sess. a letter then received (1969), from forfeiture the sole to insulate Attorney General Richard P. Klein- Deputy activities. product many Excluding proceeds commenting upon from the reach of dienst RICO’s forfeiture incentive, 1963(a)(1)would provide provision. expressed It the views of deterrent, bankruptcy schemes and to Department Justice as follows: *7 racketeering yield pri- other forms of concept It is felt that this revival of the marily cash revenues. penalty, of forfeiture as a criminal limit- 1963(a) to one’s ed. as it is in Section interpre- further for a broad support Still enterprise in the which is the legisla- tation of is found in the RICO, subject the offense involved specific of history.22 early tive An draft of S. here, 1861, 18, extending other April which was introduced on 1969, offender, contained one basic forfeiture of the convicted is a See, 5873, 5874, e.g., prose- Cong.Rec. activity form of 21. 115 5884-85 basis (1969) (remarks McClellan); cution). Cong. of Sen. 116 585, (1970) (remarks Rec. 586 of Sen. McClel- lan); (remarks (re- Hruska); 601 Sen. 606 of the of the 22. We are mindful that Byrd); (remarks statute, marks of Sen. 953 of Sen. legislative history, and not the is the Thurmond); (remarks Murphy); 962 Indeed, of Sen. language of the law of the land. “the (remarks Bible); (remarks 970 of Sen. 35199 of of its statute the most reliable evidence [is] ” Rep. Germain); (remarks Turkette, Rep. St. 35300 of United States v. 452 intent .... Mayne). 1961(1) (Supp. also 18 U.S.C. § 2533, See 576, 593, 2524, L.Ed.2d U.S. 101 S.Ct. 69 1980) (list predicate racketeering IV of acts of proceed. 246 With that caveat we
959
the
interpretation of
limited
Our more
rather
wisdom
Congressional
matter of
sup-
finds
meaning of the Kleindienst letter
power ....
of
than
constitutional
comments
Department’s
the
port in
Justice
Crime,
Relating
Organized
Measures
on S. 30 as it
subsequent
hearings
House
on Criminal
the
Hearings Before
Subcomm.
passed the Senate.
Comm,
Procedures
Senate
Laws and
provision
contains a
[Title IX]
1st
Judiciary,
Cong.,
91st
Sess.
on the
has been
of
interest which
forfeiture
added).
panel
The
viewed
(1969) (emphasis
pro-
of
criminal
attained in violation
in-
congressional
of
indicative
the letter as
Department
The
of the statute.
visions
inter-
This
strictly to limit forfeitures.
tent
length
upon
of Justice commented
how-
significance,
of the letter’s
pretation
a re-
constitutionality of
sanction in
ever, ignores its context.
1861,
which Title IX
port on S.
from
First,
that
it was
Congress was aware
derived, in
Kleindienst
been
letter]
[the
enactment
territory
new
with the
entering
RICO;
particularly
was concern
there
No.
Hearings on
Before Subcomm.
S.
constitutionality of the sanction
over the
Comm,
Judiciary,
House
on
forfeiture.23
personam
added).
(1970) (еmphasis
2d
Cong.,
Sess.
concern,
that
letter addresses
Kleindienst
Department’s
com-
the Justice
Notably,
are
explaining
problems
constitutional
1963(a)
on
30 do not describe §
ments
S.
a nexus be-
requirement
avoided
en-
to interests in an
forfeitures as limited
the interest to
1962 violation and
tween
terprise.
Furthermore,
the letter was
be forfeited.
1861,
Ill
commentary on S.
submitted as a
RICO, which, as
original
we have
draft
with
today squarely
Our
conflicts
holding
above,
unitary
contained a
noted
Circuit in United
Ninth
States
provision
limita-
express
with
(9th
personam character
enacting
was
to deal
reaching measures it
feiture,
government
sup-
contends
the
organ-
problem of
unprecedented
with the
that it
no
letter to this court
plemental
plain language of the stat-
ized crime. The
point31
at
to trace
obligation whatever
this
ute,
purposes,
deterrent
remedial and
proceeds
thеir
the insurance
into
current
history
compel
all
the
legislative
and the
to the
the
According
government,
form.
1963(a)(1) encompasses
conclusion that §
like
other
monetary
forfeiture order is
proceeds
the income
forfeiture of
money
permitting
satisfy
it to
judgment,
activity.
judgment
of the defendants’
Commentators,
assets.32
current
court on the
judgment
The
the district
hand,
suggested that normal
other
have
forfeiture issue
profits
29. In relevant
part
“Upon
That
form the
practice,
indictment.
the statute directs:
section,
advises,
compelled
person
government
of a
conviction
under
Attorney
identify
practical inability
to
court shall authorize
General
to
otherwise
large drug
seize
or other interest
all
declared
sum involved in
forfeitable
upon
submits,
under
such
government
forfeitable
this section
terms
how-
transactions.
proper.”
deem
ever,
statutorily
and conditions as the court shall
tracing
is neither
nor
such
1963(c)(1976).
constitutionally required.
points
It further
out
that,
pro-
of the insurance
because the amount
finding
30. “When verdict contains a
prop-
identifiable,
readily
here
ceeds at issue
inability
forfeiture,
erty
judg-
subject to
a criminal
at the forfeitable
to otherwise arrive
ment of criminal forfeiture shall authorize
compel
tracing in
does not
resort
sum
Attorney
prop-
General to seize the interest or
case.
forfeiture,
erty subject
fixing
such terms and
proper.”
as
court
deem
conditions
shall
364; Weiner,
supra
33.
Trojanowski,
note
at
32(b)(2).
Fed.R.Crim.P.
Pay:
Forfei
Not
RICO Criminal
Crime Must
Perspective,
1 N.Ill.U.L.Rev.
ture
31.
Questions regarding
specificity required
comply
in
eral Rule Criminal Procedure
extent
satisfying
indictment in order to
with Fed-
7(c)(2)
and the
tracing principles
among
apply
prospect
priority
of a
conflict
requirement
competing
are not before us.
was also
claimants to
argument.
We note
raised
oral
government points
practice
that its
out
make “due
Executive to
RICO itself directs the
provision
prosecutions
Drug
Comprehensive
undеr the
rights
persons”
of innocent
Abuse Prevention
Act of
and Control
1970is
disposing
property.
18 U.S.C.
of forfeited
profits
trace the flow of
and the
later
1963(c) (1976).
acquired by
identify
and to
the final
*10
FUR-
FOR
AFFIRMED;
Title
Organized
RICO is
IX of the
REMANDED
Crime
Control Act
solar
Congress’s
plexus
PROCEEDINGS.35
THER
organized
blow to
The
crime.
Act
and
legislative history
Congress’s
reflect
deter-
joined by
POLITZ,
Judge,
Circuit
ALVIN
to counter
mination
the takeover of legiti-
TATE,
VANCE,
RUBIN,
A.
B.
THOMAS
businesses,
mate
as
as well
to combat or-
CLARK,
and
JERRE S. WILLIAMS
GAR-
ganized,
In enacting
activities.
WOOD,
Judges, dissenting:
Circuit
RICO, Congress
a
ordained
criminal statute
consequences,
vast
and stern
scope
aimed
dissent,
I
I
Respectfully,
regretting that
punishing
and deterring those who would
in one of
join my colleagues
cannot
the last
in
wreak havoc
the social and economic
en banc
the Former Fifth
by
cases decided
fabric of
society.
our
Circuit.
I am unable to
in the hold-
concur
ing
a fire
payment
that a
made under
insur-
penalties
subject-
which
necessarily
ance
constitutes a forfei-
policy
RICO, as set
in
ed a violator of
forth
table
“interest”
under
up
$25,000,
a
include
fine of
1963(a)(1), being
opinion
of the
imprisonment
years,
up to
and the
purpose
structure
language,
of the
forfeiture to the United
of:
Corrupt Organi-
Racketeer Influenced and
(1)
direct a
interest he
any
acquired
zation Act
different
conclusion.
or main-
tained in violation
(2)
of section
any
in,
of,
interest
security
against,
claim
posited
issue
the court
today
or property or
right
contractual
“interest,”
whether
the term
as used in
over,
affording
kind
a
source
influence
1963(a)(1),
“includes income or
de-
any enterprise
established,
which he has
pattern
rived
from
activi-
operated, controlled, conducted, or partic-
ty.”
issue,
That is the larger
but perhaps
of,
ipated in the conduct
violation
whether,
precise
more
issue at bar is
section 1962.
under
provisions,
the RICO forfeiture
money judgment may
against
be rendered
&
defendant,
in a sum
equal
the amount
today
court
concludes
the word
paid
a fire
policy,
under
for a loss
“interest,”
used,
as
here
includes income
setting
occasioned
arson in a
violative of
profits derived from a
racketeer-
RICO.
conclusion,
ing
I do not share that
activity.
adhering to the view
expressed
panel
vacuum,
Just as nature abhors a
histori-
“interest,”
opinion
term
as used
cally
society
our
has abhorred forfeitures.
1963(a)(1),
to an
applies only
interest
As Judge
Hill notes
footnote
the enterprises
1962(a),
(b)
envisioned
§§
framers of the Constitution demonstrated
(c)
not to
income derived from
their
repudiation
English
the harsh
tradi-
illegal activity. Whether this
distinction
is,
forfeiture,
tion of
very
and our
wise,
prudent or appropriate
per-
as I
first Congress forbade the forfeiture of an
estate because of a criminal conviction.
it,
ceive
to the legislative
a matter best left
branch,
significant
it represents
policy
Further, a forfeiture
an
personam
with
decision.
application,
us,
as we have before
is to be
most
charily
per-
assessed.
It is
spective
I
inquiry
address the
before
The interests
to be forfeited
under
the en banc court.
1963(a)(1) are
acquired
those
or main-
part
panel’s
prise.
opinion
We
companies
reinstate the
of the
Both of Martino’s
were ac-
judgment
enterprise.
They provided
ordered forfeiture of Mar-
tive in the
funds for
Company
tino’s
interest
Ybor Loan
M &
arson and fraud ventures.
The M S&
supra.
Company.
Corporation
S
purchased
Investment
note
See
Investment
part
opinion,
it,
That
appear
which does not
the intent to
burn
sold
but
reporter (see
supra),
in the bound
note
someone else
reads
who then burned it. Martino
participant;
played
as
was
follows:
an active
impor-
he
tant
enterprise,
role within the
a role
We
made
affirm the order of forfeiture of Martino’s
even more
companies
effective
because
companies
interest
in his two
because it falls
managed.
he
requires
The Act
squarely
forfeiture of his
within the
of §
companies.
interest
in these
provides
fоr the
affording a source of
over
influence
the enter-
*11
appear
interest” and the word “interest”
violation of
Section
tamed in
§
places throughout
several
tion
interest
the statute.
establishing or
Sec-
1962(a) prohibits acquiring,
1961(3)
“legal
refers to a
or beneficial
with income de-
enterprise”
“an
operating
rived “from
racketeering
property.”
activ-
Section
re-
pattern
fers to “any
any enterprise.”
interest in .. .
of an unlawful
or
collection
ity
1962(b)repeats the
“any
this sec- Section
words
in-
contained in
exception
debt.” The
Further,
any enterprise.”
terest
in ...
of the entire
sharply
pith
focuses the
tion
1964(a),
section,
the civil
pre-
remedies
pattern
§
from a
money oozing
section—
may
person
scribes that the court
“to divest
order a
resulting
or
from col-
racketeering activity,
lection of an unlawful
interest,
debt,
himself of
direct or
not be
indirect, in
In each in-
any enterprise.”
un-
businesses
legitimate
used to infiltrate
meaning
stance the
is cleаr—an “interest”
certain
investment is made under
less the
is an
in an enterprise.
and constitutes less
limiting circumstances
secu-
outstanding
of the business’s
than 1%
rities. This section
prohibits the invest-
panel
persuasive
analysis
found
enter-
legitimate
tainted funds in a
colleagues
ment of
of our
of the Ninth Circuit in
place
to
prise. Congress determined
v.
Corp.,
States Marubeni America
protective
mantle of the federal
611 F.2d
that
1980),
Cir.
who concluded
businesses,
legitimate
guarding
law around
the forfeiture in
RICO extends
corruption
inherent in soiled
enterprise
them from
funds.
interests in an
and does not in
1962(b)
the ac-
proscribes
clude income or proceeds
from a
in or
maintaining
of an interest
quiring
racketeering activity.
that view and also
I continue to be of
through racketeer-
enterprise
control of an
persuasive
find
the dis
an unlawful
ing activity
by
Thevis,
collection of
cussion in United States v.
the conduct
(c) proscribes
F.Supp. 134 (N.D.Ga.1979)
debt. Subsection
of the affairs of
and United
enterprise through
an
rack-
v. Meyers,
(S.D.Pa.
States
1977).
That is, again, legislative consideration.
hurdle proposition that in-
Finally, accepting forfeitable, question I are
surance is applica- the forfeiture sanction
whether Rodriguez. Russello and These two
ble to buildings insured be- defendants owned and al., Bobby HALL, Plaintiffs-Appellees, et arson ring. of the RICO fore the advent feloniously They participated later properties. pro- their The insurance burned BOARD SCHOOL COMMISSIONERS OF taken different manifes- ceeds be as a ALABAMA, COUNTY, et OF MOBILE so, pre-RICO violation asset. If tation of a al., Defendants-Appellants. income, truly insurance payments are the No. 80-7720. fruits, revenue or activities? Court Appeals, Fifth Circuit.* these
Regardless, proceeds, based on ar- B payments son and the were in- Unit fraud, likely are to be defea- very duced 2, 1982. Aug. expect sible. One would under the contract, controlling state law, to recap- the insurer would be entitled event, payments. In that what
ture to the forfeiture decrees which are
happens money judgments,
non-asset oriented col- es-
lectible from defendants their insurer, Assuming recapture by
tates? all to an portion or a inno- diversion holder, mortgage party
cent third such as a * case, 9(1) of Law Fifth Public 96-452-October Former Circuit