Petition — Roza v. United States
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80-1208 “ecto
IN THE JAN 16 198]
SUPREME COURT OF THE UNITED STATES
OCTOBER TERM 1980 MICHAEL RODAK, JR., CLERK
NO.
exe XH KK KX
FRANK VERNON ROZA. JR.,
Petitioner,
Vv.
UNITED STATES OF AMERICA,
Respondent.
*x*e eK HE KK *
ON THE PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS |
FOR THE NINTH CIRCUIT
*e £eK KK K *
FRANK VERNON ROZA, JR.
ALVIN S. MICHAELSON
A Professional Corporation
9665 Wilshire Boulevard
Suite 550
Beverly Hills, California 90212
(213) 278-4984
-%
7.
QUESTIONS PRESENTED FOR REVIEW
The issues presented to this Court are whether Title IX
of the Organized Crime Patrol Act of 1970, known as the
Racketeer Influenced and Corrupt Organizations Act (RICO),
Title 18, U.S.C., §1961-1968, is unconstitutionally vague,
overly broad and arbitrary and thus contrary to the United
States Constitution Amendment 5, due process clause, and an
unconstitutional expansion of federal jurisdiction.
TOPICAL INDEX
Page
Pe PA OES ob kc eik’s Sole » alos bbe v's s ii
PETITION FOR WRIT OF CERTIORARI ............... l
1. OPINION OF THE COURT BELOW ................ l
2. STATUTORY PROVISIONS SUSTAINING
SP Oe Oe ss hihi cen ace ee Bho cere le l
3. UBS TIONG PRSOIFE EO oie eck ene NaeAt 1
eer ek es Bey. get a 2
Ds DEPRMEEUE UE URE ICED ns eee ee tee ene 3
6. ARGUMENT See GRID a A ey oh hn OE ia aie # ba 8 a
7. REASONS FOR GRANTING WRIT ............... 11
RN a en ee ee 11
APPENDIX “A”: OPINION OF THE UNITED STATES
COURT OF APPEALS FOR THE
NINTH CIRCUIT, October 23, 1980.
APPENDIX “B”: DENIAL OF PETITION FOR
REHEARING.
APPENDIX “C”: DENIAL OF APPLICATION FOR STAY
OF EXECUTION OF ISSUANCE OF
MANDATE.
APPENDIX “D”: TITLE 18, U.S.C., § 1961-1968
TABLE OF AUTHORITIES
CASES Page
Bambu Sales, Inc. v. Gibson, 474 F.Supp. 1297 (1979) ..... 9
Central Hudson Gas and Electic Corp. v. Public Service
“~~~ Commission of New York, 100 S.Ct. 2343..-...... 9
Dunn v. United States, 99 S.Ct. 2190 (1979) ........ eee es 6
NAACP vy. Button, 371 U.S. 415 (1963) ................ 9
Palmer v. Euclid, 402 U.S. 544, 546 (1971) .............. 5
Rewis v. United States, 349 U.S. 81, 75 S.Ct. 620,
99 L.Ed. 905 RSS Nin 0 Sig CE We ton 4: boda os Ee aN 10
Sawyer v. Sandstom, 615 F.2d 311 (Sth Cir. 1980) ........ 9
United States v. Five Gambling Devices, 346 U.S. 441 ;
Loto Mi B Eh” Bos 261) 7) Ae 10
United States v. Frumento, 563 F.2d 1083 (3rd Cir. 1977) .. 8
United States v. Grzywaez. 603 F.2d 682, 686 n.6 3
th Cir. 1 RUBS IE ES DRA RSS 0 SS ee a ee ay Bee 6
United States v. Harris, 347 U.S. 612, 617 (1954) ......... 5
United States v. Huber, 603 F.2d 387, 394 (2nd Cir. 1979) .. 6
United States v. Mandel, 415 F.Supp 977; 1022 (1976) .. 6, 10
United States v. Moeller, 402 F.Supp 49, 59(1975) .... 6,10
‘ United States v. Provenzano, 620 F.2d 985, 992
tesa RRR ICE SS Seen Ee 7
United States v. Sutton, 605 F.2d 260 (6th Cir. 1979) ..... 7
United States v. Swiderski, 593 F.2d 1246, 1249
PRA eit spiithw RPRaE Ca ASS tie OMe eal a 10
United States v. Turkett,.-F. 2d___( Ist Cir. 1980) ..... 7
ile
TABLE OF AUTHORITIES (continued)
CASES Page
United States v. Weisman, 624 F.2d 1118 (2nd Cir. 1980)... 7
United States v. Whitehead, 618 F.2d 523,525 n.1
th Cir. LS ESAS A orate oa C8 1 Fae OR Srcgals BAP ky De 7
United States v. United Gypsum Co., 98 S.Ct. 2864,
NU RE ge 9
STATUTES
Title LIX, §904(a) of Pub. L.91-452.................. <3
Title 18, United States Code, §641 .................. a2
Title 18, United States Code, $1952 ©. .........%...... 10
Title 18, United States Code, §1961(5) ................. 7
Title 18, United States Code, § 1961-1968 .......... a 3,30
Title 18, United States Code, §1962(a) ....:.. 2,3,5,6,7,8
Title 18, United States Code, §1962(c) ......... 2,3, 54 6, 7
Title 18, United States Code, §2115 ................. 2,3
Title 18, United States Code, §2314 . : Do U ak he ku ow his a2
Title 18, United States Code, §2315 ..............0.. 2,3
U.S. Constitution Amendment 5 ................... 2, 11
OTHER REFERENCES
84 Stat 923; welsthy of RICO Prosecutions by Barry
Tarlow and Terrence Scott, printed in Criminal
Law Seminar Syllabus, Nov. 15, 1980, Calif.
Attorney for Criminal Justice ................. 7,8
Racketeering Influenced and Corrupt Organizations (RICO)
Application of RICO in the Third Circuit, 24 Vill L.
ts MTP AL COON GAy Ou cs Kea Rese ol ee 5,6
TABLE OF AUTHORITIES (continued)
OTHER REFERENCES Page
Investing Dirty Money: Section 1962(a) of the Organized
rime Control Act of 1970, 83 Yale L.J. 1491 ... 7,8
The Challenge of a Model Penal Code, Wechsler, 75 Harp..
L. Rev. RS I RS eae Sate or? 9
—iv—
ra
IN THE
SUPREME COURT OF THE UNITED STATES
OCTOBER TERM 1980
NO.
FRANK VERNON ROZA., JR.
Petitioner,
Vv.
_ .UNITED STATES OF AMERICA
Respondent.
\
EB BRE HEH
PETITION FOR WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
The Petitioner, FRANK VERNON ROZA, JR., respect-
fully prays that a Writ of Certiorari issue to reverse the Judg-
ment and Opinion of the United States Court of Appeals for
the Ninth Circuit entered October 23, 1980.
1. OPINION BELOW
A copy of the Opinion of the United States Court of
Appeals for the Ninth Circuit is set forth as Appendix “A” to
this Petition.
2. JURISDICTION
The Judgment of the Court of Appeals was entered on
October 23, 1980. The mandate was stayed pending petitioner’s
Petition for Rehearing which was denied on December |, 1980.
Petitioner’s Application for Stay of Mandate filed on December
5, 1980 was denied on December 15, 1980. A copy of the
denial of the Petition for Rehearing is attached hereto as
Appendix “B” and a copy of the denial of the Application for
Stay is attached hereto as Appendix “C”. The jurisdiction of
this Court was invoked under Title 28, United States Code,
Section 1254(1).
3. QUESTIONS PRESENTED FOR REVIEW
The issues presented to this Court are whether Title IX
a ie
of the Organized Crime Patrol Act of 1970, known as the
Racketeer Influenced and Corrupt Organizations Act (RICO),
Title 18, U.S.C., §$1961-1968, is unconstitutionally vague,
overly broad and arbitrary and thus contrary to the United
States Constitution Amendment 5, due process clause, and an
unconstitutional expansion of federal jurisdiction.
4. STATEMENT OF THE CASE
This matter came before the United States Court of
Appeals for the Ninth Circuit on appeal from a judgment of
conviction entered on May 24, 1980 in the United States Dis-
trict Court for the Northern District of California, upon a jury
verdict before the Honorable Stanley Weigel, judge presiding.
On March 13, 1979 the Federal Grand Jury for the
Northern District of California handed down an Indictment
charging appellant, Frank Vernon Roza, Jr., in Count | with
a violation of Title 18, U.S.C., §1962(c) (racketering—RICO)
along with his co-defendants Samuel Bailey and Robert Moore;
in Count 2 with a violation of Title 18, U.S.C., §1962(a)
(RICO); in Count 5 with a violation of Title 18, U.S.C., §2314
(Interstate Transportation of Stolen Property) along with his
co-defendants Bailey, Moore and Lance Smith; in Counts 6
through 9 with a violation of Title 18, U.S.C., §2315 (receiving
stolen property). In Counts 3 and 4 petitioner’s co-defendants
Bailey, Moore and Smith were charged with postal burglary
(Title 18, U.S.C., §2115) and theft of government- property
(Title 18, U.S.C., $641).
Prior to trial, petitioner moved to dismiss the RICO
counts and made a motion for severance which were denied by
the District Court on May 3, 1979.
Jury trial began on May 15, 1980; on May 24, 1980
the jury returned verdicts finding petitioner and his co-defend-
ants guilty of all charged counts and returned a special verdict
forefeiting petitioner’s 1978 Ferrari automobile.
On June 28, 1980, petitioner was sentenced to a total
of fifteen years and fined $25,000.00. Petitioner was released
on $300,000.00 bail. .
Petitioner and his co-defendants filed timely appeals to
the Court of Appeals for the Ninth Circuit which were consoli-
dated. On October 23, 1980 the convictions of petitioner and
his co-defendants were affirmed.
On November 6, 1980, petitioner filed a Petition for
Rehearing to the United States Court of Appeals which was
denied on December |, 1980. Petitioner’s Application for Stay
aa filed on December 5, 1980 was denied on December
, 1980. ;
i)
Petitioner was represented at trial and on appeal to the
eat States Court of Appeals for the Ninth Circuit by Ernest
. Winters.
5. STATEMENT OF FACTS
Petitioner was charged in Count | of the Indictment
along with co-defendants Bailey and Moore with a violation of
Title 18, U.S.C., § 1962(c) which states, inter alia:
“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 com-
merce, to conduct or participate, directly or in-
directly, in the conduct of such enterprise's affairs
through a pattern of racketeering activity ...”
Petitioner alone was charged in Count 2 with a violation
of Title 18, U.S.C., § 1962(a) which states, inter alia:
“It shall be unlawful for any person who has re-
ceived any income derived, directly or indirectly,
from a pattern of racketeering activity . . . , to use
or invest, directly or indirectly, any part of such in-
come, or the proceeds of such income, in acquisition
of any interest in, or the establishment or operation
of, any enterprise which is engaged in, or the activi-
ties of which affect, interstate or foreign com-
merce...”
Petitioner was charged in Counts 5 through 10 with the
interstate transportation of stolen property (Title 18, U.S.C.,
§ 2314) and receiving stolen property (Title 18, U.S.C., $2315).
The co-defendants Moore, Bailey and Smith were sep-
arately charged with various postal burglaries and theft of
government property (Title 18, U.S.C., §2115 and 641).
The evidence produced at trial indicated that Bailey,
Smith and Moore had burglarized several post offices for stamps.
There was no evidence produced which involved the petitioner
in any way with these burglaries.
William Eggars, an admitted burglar, participated in
the post office burglaries with Bailey, Smith and Moore and was
given immunity in exchange for his testimony at trial.
He testified that Bailey had met with Mr. Roza on sev-
eral occasions and was told that Roza was the “fence” for the
stolen stamp, however Eggars apparently was never a party to
any conversations between Bailey and Roza, and therefore did
not personally know the circumstances of the sale of the stamps.
pa,
*
The testimony of Joseph Escrove, an immunized govern-
ment witness, constituted the bulk of the evidence incrimin-
ating Mr. Roza. Escrove was 4 San Francisco coin dealer who
bought and sold stamps and coins. He testified that Mr. Roza
was the scle owner of Consolidated Coin Company in Carson
City and Reno, Nevada.
Escrove testified that he and Roza had an arrangement
whereby Escrove provided Roza with blank signed checks that
Roza could use when he needed money to buy coins and as
loans between the two parties as friends. He stated that Roza
would pay him back in silver coins and stamps.
He testified that Mr. Roza had told him that some of
the stamps Roza gave him in repayment of these loans were
received from burglars. Roza’s defense was that Escrove had
every reason to lie to save his own skin and that Roza had no
knowledge of illegal source of the stamps and that at most he
unknowingly received and processed stolen merchandise.
Stamps found in Mr. Roza’s car after his arrest were
not proven to be stolen nor linked to the alleged burglaries.
There was no evidence that Mr. Roza was involved in
“organized crime,” “the syndicate,” “Mafia” or any organized
crime families.
On May 24, 1980 the jury found petitioner guilty on
all counts. On June 28, 1980 he was sentenced to a total of
fifteen years with a $25,000.00 fine (Count | — 12 years and
$25,000.00 fine, Count 2 — 12 years concurrent, Count 5 —
three years consecutive to Count | and Counts 6 through 13 —
three years concurrent with counts 1, 2 and 5).
6. ARGUMENT
THE DECISION OF THE COURT OF APPEALS
AFFIRMING THE CONVICTION OF PETITIONER FOR
VIOLATIONS OF THE RICO STATUTE IS UNCONSTITU-
TIONAL AS THE STATUTE UPON WHICH HE WAS CON-
VICTED IS SO VAGUE AS TO VIOLATE PETITIONER’S
RIGHT TO DUE PROCESS OF LAW AND SO OVERLY
BROAD AS TO BE SUSCEPTIBLE TO SWEEPING AND IM-
PROPER ARBITRARY AND UNREASONABLE APPLICA-
TION: THERE IS CONFLICT OF THE DECISIONS OF THE
COURT OF APPEALS INTERPRETING THIS STATUTE
AND THIS COURT’S RULING IS NECESSARY TO SECURE
CONFORMITY OF DECISIONS AND IMPORTANT QUES-
TIONS OF LAW ARE AT ISSUE HEREIN REQUIRING
SETTLEMENT BY THIS COURT.
Attached hereto as —— “D” is a copy of the
full text of Title IX of the Organized Crime Control Act of
len
1970 known as the Racketeer Influenced and Corrupt Organ-
izations Act, hereinafter referred to as RICO, Title 18 U.S.C.,
§ 1961-1968. Petitioner has found no case in which this Court
has rendered an opinion regarding the constitutionality of this
statute.
A. Void For Vagueness:
RICO is the ninth of eleven titles of the Organized
Crime Control Act of 1970. The purpose of the act was to “deal
with the unlawful activities of those involved in organized
crime” by “establishing new penal prohibitions and by en-
hanced sanctions and new remedies.” (84 STAT 923; Defense
of RICO Prosecutions by Barry Tariow and Terrence Scott
printed in the Criminal Law Seminar Syllabus, November 15,
1980, California Attorneys for Criminal Justice at p. 80).
The central provision of the Act is 18 U.S.C. § 1962
which defines the RICO offense. The language used in § 1962
is so broad, ambiguous and vague that it fails to give “a person
of ordinary intelligence fair notice that the contemplated con-
duct is forbidden. ‘iia Gites |. 347 U.S. 612, 617
(1954) quoted in Palmer v. Euclid, . 544, 546 (1971).
Section , inter alia:
“(a). It shall be unlawful for any person who has
received any income derived, directly or in-
directly, from a pattern of racketeering activity...
to use or invest, directly or indirectly. any part
of such income, or the proceeds of such income,
in acquisition of any Po in, or the establish-
ment or operation of, any enterprise which is
engaged in or the activities =e affect, inter-
state or foreign commerce...
“(c). It shall be unlawful for any person employ-
ed 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 rack-
et activity ...”
(Emphasis )
(1) Liberal Construction Clause:
Title [X includes a clause which authorizes and,
in effect, directs broad judicial interpretations of the act by re-
quiring liberal construction of RICO “to effectuate its remedial
purposes” which, in and of itself, denies defendants a fair warn-
ing of the proscribed activities [See comment, Racketeering
Heo ete a0 saat 34-Vit L. Re yng eo of
ae
Procecutions, Barry are comet at p. 146].
a complete text of the “Liberal Construction
Clause” reads: “The provisions of this title [enacting this chap-
ter and amending sections 1505, 2516 and 2517 of this title]
shall be liberally construed to effectuate its remedial purposes.”
Title IX, §904(a) of Pub. L. 91-452.
hile this liberal construction clause has been
frequently cited by several courts in support of holdings which
have page en Broun. RICO criminal liability [See United
States % 603 F.2d 682, 686 n.6 (7th Cir. 1979,
United Si a vy. “Th Huber, 603 F.2d 387, 394 (2nd Cir. 1979)]
several courts have aptl aptly pointed out that this clause is in direct
contradiction to the mandate of this Court to resolve ambiguit-
ies in penal statutes in favor of leniency. See United States v.
Mandel, 415 F.Supp. 997; 1022 (1976): United States v.
, 402 F.Supp 49, 59 (1975); United States v. Altese,
542 F.2d 104, (2nd Cir. rig dissenting opinion at p. 107.
In Dunn v. United States, 99 S.Ct. 2190 (1979)
this Court observed that t fl traditional rule of statutory con-
struction requiring that criminal statutes be construed in favor
of lenity was “rooted in fundamental principles of due process,
which mandates that no individual be forced to speculate, at
peril of indictment, whether his conduct is prohibited.”
Petitioner respectfully submits that § 1962,
despite its deceiving simplicity, is an extremely ambiguous and
vague statute which, in light of the liberal construction clause,
poses severe hazards to the unwary defendant. Indeed, there is
significant conflict in the circuits in interpreting some of the
essential language of the statute in deciding even the most
fundamental question as to whom the statute applies.
(2) Vague And Ambiguous Language In The Statute:
One of the basic tenents of due process of law is
that a penal statute gives clear warning of the activity which is
to be proscribed.
The first area of unresolved confusion created
by §1962 has been interpretation by the courts of the ambig-
uous words “any enterprise” in determining who is a proper
aefendant under the statute.
While the statute, as reflected in its popular
name, appears to be aimed at investments of “dirty money” by
organized crime figures infiltrating legitimate businesses it has
been extended by several circuits far beyond that purpose.
The government has frequently alleged vio-
lations of $1962 based solely on illegal activities unrelated to
the acquisition or operation of legitimate businesses. It argues
alin
rs
that § 1962 applies to iilegal operation of an illegal
that is, one or more persons committing two or
acts as constituting an illegal criminal “enterprise.”
the illegal operation of a legitimate one. Defendants
that RICO was intended to prohibit only the
operation of legitimate en*erprises by organized
patterns of racketeering activity. They have
§ 1962(c) does not impose criminal liability on
in “an enterprise” composed of an individual
connected only by their commission of two or
acts. (See Defense of RICO Prosecutions, Barry Tarlow. supra,
pp. 94-95.)
The majority of courts have rejected this argu-
ment and have refused to restrict § 1962(c) to the illegal opera-
tion of a legitimate business. See Uni 5
620 =a a a (3rd ane i v. Whi
618 F.2d $23, 525 n.1 (4th Cir. 1980); Uni «
ist and Sixth Cir.
609 F.2d 298, 304-0 (7th Cir. 1979). The
— have limited the term es a 3 to — =
nited sare v. Turkett, =F. 2d_sCf st Cir. 1980);
ited States v. Sutton, 605 F.2d 260 (6th Cir. 1979) (en banc
Sending). The Eighth circuit has adopted a compromise position
which permits an illegal “enterprise” but requires that the enter-
prise have a “formal” structure. See Uni Atte, v Anderson,
F.2d , 27 Crim.L.Rep. (BNA) (9th Cir. 1980).
Thus depending on whether you are arrested in
the First or Seventh Circuits you may or may not be a proper
defendant under the Act.
. When § 1962 is applied to an “illegal enterprise,”
the enterprise is nothing more than an individual performing a
“pattern of racketeering activity.” The phrase “pattern of rack
eteering activity” is likewise vague. Section 1(5) defines
“pattern of racketeering” as requiring at least two acts of rack-
eteering but is ambiguous as it does not define “pattern.” It is
simple to conceive of a defendant who has committed two acts
of racketeering which can be characterized as “sporatic activity.~
The two acts could be widely separated in time from one
another and from the date of the Indictment. (See defense of
RICO Prosecutions, Tariow, p. 110.) In United States v. Wei
man, 624 F.2d 1118 (2nd Cir. 1980). the Court
that the term “pattern” did not require any relationship be-
tween the two acts. Thus, in come circuits, an individual who is
charged with committing two sporatic, unrelated criminal acts
may be held liable under the RICO statute.
A further ambiguity in §1962 involves the
meaning of the word “acts.” “It is unclear whether two prior
racketeering convictions would be necessary. Conceivably. a
in
il
~_
- 1962(a) conviction could be based on two prior racketeering
“acts” “5 which the defendant was never convicted. See Invest-
ing Dirty 4 oney: Section 1962(a) of the Organized Crime Con-
trol 83 Yale LJ. 1491, 1500.
Indeed in United States v. Frumento, 563 F.2d
1083 (3rd Cir. 1977) the Court held that a defendant may be
prosecuted in the federal court under RICO even where the
defendants had been acquitted of the charged “criminal acts”
in the state courts. In that case the Court rejected the defen-
dani's claim of double jeopardy stating that the prosecution
under RICO was s separate federal offense which is merely.
defined in terms of state crimes.
Under §1962(a) the unqualified generality of
the words “any person who has received any income derived,
directly or indirectly, from a pattern of racketeering activity”
raises the issue of whether § 1962(a) extends to persons who
did not commit any racketeering acts but who received money
or other income from a racketeer and then use it in their busi-
‘messes, with no intent to make the income of those dag teen
primarily available for further racketeering activity. See Invest-
ing Dirty Money, supra, Yale LJ. 1491, 1495.
onsider, for example, the following situation:
A racketeer gives money to a person who has not committed
acts of racketeering and with whom the racketeer wishes to
ingratiate himself, ‘the money is an investment in the person’s
business, not a bribe. Would the innocent (non-racketeering)
taker be a potential defendant under §1962(a)? Since such a
businessman has received income “indirectly” from a racketeer-
ing activity he arguably could be considered a defendant under
the act’.” Investing Dirty Money, supra, Yale LJ. at 1496. In
light of the construction clause the circuits most prob-
ably would extend such liability.
(3) Lack of Mens Rea;
The most serious ambiguity in the language of
the statute—an ambiguity which raises additional difficult issues
of statutory interpretation and which poses troubling questions
about the compatibility of this statute with the American sys-
tem of cirminal justice—is the apparent lack of 3 mens rea
requirement (See Yale Law Journal, supra, at p. 1502). The
most serious consequence of this omission is that a defendant
could be convicted for investing or receiving tainted money
without knowing that it is derived from racketeering activities
(See Defense of RICO Prosecutions, Tarlow, supra, at p. 88).
Petitioner has found no case which has directly
considered whether an intent requirement exists in the statute
(see Defense of RICO Prosecutions, supra, at 89). Petitioner
respectfully contends that in light of the ambiguous nature of
ates
A
this statute and the extremely harsh and severe penalties im-
posed, this Court should require a mens rea element. See
Wechsler, The Challenge of a Model Penal Code, 65 Harv. L.
Rv., 1097, 1109 (1982). See also United States v. United
Gypsum Co: 98 S. Ct. 2864, 2876 n. 18 (1978). Petitioner
contends that it is unfair and unconstitutional to impose the
harsh RICO penalities in the absence of a scienter element and
that the appropriate mens rea standard should be either know-
ledge that the money is derived from racketeering or a con-
scious desire to use such money.
B. The Statute Is Overly Broad
The concept of “overbreath’’ embodies the constitu-
tional principle that the governmental purpose to control or
prevent activities may not be achieved by means which sweep
unnecessarily broadly and thereby invade areas of protected
nee Bambu Sales, Inc. v. Gibson, 474 F.Supp. 1297
( )
Both the concepts of vagueness and overbreath are
grounded on the Due Process Clause of the United States Con-
stitution. Bambu Bee Inc. vy. Gibson, supra, 1304. However,
a statute may be found to be overly broad even where it is not
vague. That is, the fact that an inactment provides adequate
notice of the acts it prohibits does not absolve it of the vice of
overbreath. Sawyer v. Sandstom, 615 F.2d 311 (Sth Cir. 1980). ©
t is also well settled that the overbreath doctrine
permits the invalidation of a statute or regulation even where
the litigant challenging the regulation has engaged in no con-
stitutionally bg oo activity. Central udson Gas and
This Court has not hesitated to take into account
possible applications of a statute in other factual contexts be-
sides that at bar in determining whether a statute has an inhibi-
tory effect upon constitutional rights. See NAACP v. Button,
371 U.S. 415 (1963).
In the matter before this Court there are two sig-’
nificant areas in which the RICO statute is susceptible of sweep-
ing and improper application in violation of the United States
Constitution. First, as interpreted with the “liberal construc-
tion clause,” it may easily unconstitutionally extend federal
jurisdiction into the realm of the state. Secondly, it may imper-
missibly reach the innocent recipient of “dirty money” and
thereby inhibit the right of association, due process and funda-
mental principles of liberty, fairness and justice.
As previously discussed, several circuits have inter-
ot
preted the “any enterprise” language of the RICO statute to
include criminal “enterprises” i.e. the commission of two or
more acts chargeable under the specified state or federal laws,
relying upon the liberal construction clause previously referred
to. A few courts, however, “ave commented that it would be a
violation of the principles of the due process clause to follow
Congress’ apparent mandate to liberally construe the statute
and abandon the traditional cannon of interpretation that am-
biguities in criminal statutes are to be construed in favor of
leniency. United States v. Mandel, supra, at 1022. In this regard
the Court in United States v. Moeller, supra, stated that: ““More
pertinent is the concern, grounded in principles of federalism,
not to give federal criminal laws a broad construction that
‘would alter sensitive {ederal-state relationships’ or ‘transform
relatively minor state offenses into federal felonies’.” citing
Bevis & puted States. 349 ne 81, 75 mag 620, 99 L.Ed.
; Unit tates v. Five Gamblin vices, 346 US.
441,74 S.Ct. 190 , 98 L.Ed. 179 (1953).
In dessenting opinion in United States v. Altese,
542 F.2d 104 (2nd Cir. 1976) Judge Graafeiland aptly pointed
out the dire consequences of the majority’s broad interpretation
of the RICO statute “on sensitive federal-state relationships and
limited federal police resources and the resultant transformation
of relatively minor state offenses into federal felonies by mere
geographic happenstance.” (citation omitted), supra at 108.
The dissent went on to say: “The disruptive effect of our hold-
ing on federal-state relationships an on the limited enforcement
and judicial resources of the federal government is every bit as
great as that of the expansive interpretation of the Travel Act,
18 U.S.C. $1952, condemned by the Supreme Court in Rewis
v. United States, supra.”
v. Swiderski, 593 F.2d 1246, 1249
(D.C. Cir. 1978), the Court indicated that RICO may be over-
broad when applied to “* ”” with only a tangential
small fry
relationship to the criminal enterprise. See also Atkinson,
“Racketeer. Influenced and Corrupt Organizations,” 18 U.S.C.
§ 1961-1968: Broadest of the Federal Criminal Statutes, 695.
Crim. L. & Criminology |, 4 — RICO can be unconstitutionally
vague as applied to some individuals).
Finally, petitioner contends that in light of the am-
biguous language, which is being liberally and inconsistently
interpreted by the courts, and the lack of any mens rea require-
ment, with the imposition of severe penalities, the statute may
impermissibly reach one who unknowingly received “either
directly or indirectly” money or income “or the proceeds of
such income” which was originally racketeered money. Pet-
—|0—
°.
itioner respectfully contends that such an application could
reach, at.one point or another, every business in this country
and would thereby impede the right of freedom of association
and due process.
Although the ultimate purpose of the RICO statute,
i.e. to curtail or eliminate organized crime, may be acceptable
and even laudatory, the statute sweeps far too broadly and the
broad judicial interpretation of the Act unconstitutionally sub-
jects defendants to criminal sanctions without fair warning.
7. REASONS FOR GRANTING WRIT
The constitutional questions raised by petitioner con-
cern the due process clause of the Fifth Amendment in pro-
secutions under the RICO Act which petitioner contends is
vague, ambiguous and overly broad.
As indicated previously, it is petitioner’s contention
that his prosecution under that statute was unconstitutional
and the Ninth Circuit Court of Appeals erred in affirming the
denial of petitioner’s motion to dismiss those charges.
Petitioner believes that this Court has never rendered an
opinion on the constitutionality of the RICO statute, that the
decisions of the circuit Court of Appeals are in conflict in the
interpretation of this statute and that clarification of the con-
stitutionality, scope and dimension of the Act in the instant
case is an important question for the administration of criminal
justice in the federal courts.
8. CONCLUSION
For all reasons given, Certiorari should be granted and
the Judgment should be reversed.
DATED: DECEMBER 30, 1980
Law Offices’
ALVIN S. MICHAELSON
A Professional Corporation
ALVIN S. MICHAELSON
PAMELA A. WITHEY
/s/ ALVIN S. MICHAELSON
Attorneys for Petitioner
FRANK VERNON ROZA, JR.
me te
APPENDIX
APPENDIX A
IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES
OF AMERICA
Plaintiff-A ppellee, Nos. 79-1487
79-1491
vs. 79-1493
79-1518
SAMUEL GAYLE BAILEY,
LANCE LOUIS SMITH, MEMORANDUM
FRANK VERNON ROZA, JR..,
ROBERT GARY MOORE, D.C. No. CR-79-36-SAW
Defendants-Appellants.
On Appeal from the United States District Court
for the Northern District of California
The Honorable Stanley A. Weigel, Presiding
Argued and submitted June 10, 1980
Before: ANDERSON and FARRIS, Circuit Judges, and
RICHEY ,* District Judge.
The defendants appeal their convictions on a multicount
indictment for various crimes arising from a series of burglaries
of United States Post Offices located at various locations in
California and Washington. Bailey was convicted on separate
counts of violations of 18 U.S.C. §1962(c) (racketeering),
18 U.S.C. $2115 (postal burglary), 18 U.S.C. §641 (theft of
government property), and 18 U.S.C. §2314 (interstate trans-
portation of stolen property). Smith was convicted on three
counts of postal burglary, theft of government property, and
interstate transportation of stolen property. Roza was convicted
on two racketeering counts, two transportation of stolen prop-
erty counts, and one count of receiving stolen property in vio-
lation of 18 U.S.C. §2315. Moore was convicted of racketeer-
ing, postal burglary, theft of government property, and trans-
portation of stolen property.
We affirm.
"The Honcrable Mary Anne Richey, United States District Judge, District
of Arizona, sitting by designation.
-|ga—
I.
CROSS-EXAMINATION OF WITNESS EGGERS
Bailey and Smith raise as potential error the limitation of
the cross-examination of chief prosecution witness William Paul
Eggers. The trial court did not allow defense counsel to ques-
tion Eggers regarding certain specific crimes which he might
have committed after he began to cooperate with the govern-
ment in the prosecution which led to the present appeal. Cross-
examination of Eggers revealed his unsavory character and his
propensity for engaging in criminal activity. The defense attor-
neys were also allowed to explore possible deals which Eggers
may have made with the government for lenient treatment in
unrelated investigations.
The scope of crossxaminations is a matter committed to
the sound discretion of the trial judge. E.g., Burr v. Sullivan,
618 F.2d 583, 587 (9th Cir. 1980). In reviewing a refusal by a
trial judge to allow cross-examination on impeachment matters,
we look to see whether the jury had sufficient information to
appraise the bias and motives of a witness. Skinner v. aah
564 F.2d 1381, 1389 (9th Cir. 1977), cert. denied, 43
1009, 98 S.Ct. 1883, 56 L.Ed. 2d 392 (1978). Defendants here
were afforded a sufficient Opportunity to probe the bias of
Eggers by inquiring into possible understandings with the
government on specific charges. Viewing the cross-examination
. of Eggers as a whole, we observe that the defendants elicited a
considerable amount of information which hardly placed the
witness in a favorable light. We find that defendants conducted
an effective crossexamination of Eggers and were not denied
the right to confrontation.
I.
BRUTON VIOLATION
Smith, Roza, and Moore urge reversal of their convictions
on the ground that the prosecution deliberately elicited testi-
mony from the witness Namahoe which violated the rule of
y. United 391 US. 123, 88 S.Ct. 1620, 20
L.Ed.2d “i76 (1968). Namahoe in substance testified to state-
ments made by Bailey which arguably incriminated the other
three defendants. The government concedes that Namahoe’s
testimony violated Bruton, but argues on appeal that the error
was harmless beyond a reasonable doubt.!
While it is true that every Bruton violation does not require
reversal, we may affirm a conviction potentially tainted by a
Bruton error only if the evidence against the defendant is over-
whelming and the prejudicial effect of a codefendant’s admis-
—-24—
~
7%
sion is so insignificant by comparison that it is clear that admis-
sion of the statement was harmless beyond a reasonable doubt.
See Parker v. Randolph, 442 U.S. 62, 70, 99 S.Ct. 2132, 60
L.Ed.2d 713 (1 ); United States v. Lutz, 62! F.2d 940,
947 (9th Cir. 1980). Our review of the record indicates that
this standard was met as to each of the three objecting defend-
ants. The testimony of witness Escove clearly implicated Roza
as the fence for the stolen stamps, as did the presence of the
stamps in Roza’s Ferrari at the time of his arrest. The testimony
of witness Eggers described in minute detail the involvement of
Moore and Smith in the burglaries, and the tape-recorded tele-
phone conversations corroborated much of Eggers’ testimony.
While questions of Eggers’ credibility were raised, the jury re-
solved them in the government’s favor.
The defendants, however, have raised an additional problem
in cofnection with the Bruton error. It is clear from the record
that the Assistant United States Attorney who examined
Namahoe knew in advance that the witness would likely allude
to statements by Bailey implicating the other defendants. It is
also clear that the government has been instructed prior to
Namahoe’s testimony to confine the evidence only to state-
ments made by Bailey which were admissible against him. The
district court held a hearing out of the presence of the jury to
determine whether the government had intentionally elicited
the Bruton violative statements. Government counsel there con-
ceded that he knew of the answer which Namahoe would likely
give, and explained that he “was not thinking” and concentrat-
ing mainly on steering the witness away from giving testimony
implicating the.others in an alleged conspiracy to murder the
witness Eggers. The trial court accepted counsel’s explanation
and struck all of Namahoe’s testimony, while denying motions
for a mistrial. The defendants argue that the government’s
knowing use of inadmissable evidence requires reversal under
the principle of United States v. Whimpy, 531 F.2d 768 (Sth
Cir. 1976). The court below, however, accepted counsel’s ex-
planation that the use of the statement was inadvertent and
occurred in the course of an effort to avoid the introduction of
other inadmissible evidence. In the face of a clear finding by the
trial court on counsel’s state of mind, we are reluctant to
second-guess counsel’s motivations on appeal. While we admon-
ish counsel to observe all instructions from the bench and to
avoid scrupulously the use of inadmissible evidence, we do not
find that government counsel’s negligence here requires a rever-
sal. The use of the evidence was not deliberate in the sense that
the government hoped to sneak it past inattentive defense
counsel.
—3a—
Il.
JOINDER AND SEVERANCE
Roza, Moore, and Smith argue that the trial court erred in
refusing to grant their motions for severance. Smith challenges
the original joinder under Fed. R. Crim. P. 8(b), and all three
defendants challenge the failure to grant severance under Fed.
R. Crim. P. 14.
A. Original Joinder under Rule 8(b)
Smith argues that his original joinder with the other
defendants \ as improper under Rule 8(b) because he was the
only defendant not charged under a RICO count arid because a
substantial amount of the evidence adduced at tria: related to
Roza’s fencing operation.
Under Rule 8(b), joinder is permissible so long as all
defendants participate in a series of acts constituting an offense
or offenses, even through not all defendants participated in
every act constituting each joined offense. United States v.
Roselli, 432 F.2d 879, 899 (9th Cir. 1970), cert. denied cert. denied, 401
US. 924, 91 S.Ct. 883, 27 L.Ed.2d 828 (1971). The i indict-
ment here charged the defendants with an interrelated series
of illegal acts of which Roza's fencing operation was an integral
part. Furthermore, the evidence at trial indicated that each of
the acts charged was a portion of an overall series of illegal
transactions. We are satisfied that Smith’s participation in the
burglary operation was sufficiently related to other acts charged
in the indictment to justify joinder under Rule 8(b). No error
was committed here.
B. Severance Motions under Rule 14
Each defendant claims error in denial of their severance
motions made at various stages of the proceedings. We can over-
turn the trial court’s denial of a severance motion only if the
prejudice resulting is of such magnitude that the defendant
was denied a fair trial. See, e.g., United States v. Escalante, F.2d
slip op. p. 2897 (April 29, 1980). We have examined the
relevant portions of the record and al found no basis for
overturning the trial court’s rulings. Each of the defendants has
received a fair trial. The court below did not abuse its discre-
tion.
7
IV.
RICO COUNTS
Moore and Roza each week seek dismissal of the counts
against them arising from alleged violations of the Racketeer
Influenced and Corrupt Organizations Act (RICO), 18 U.S.C.
§ 1961, et seq.
Moore a. FERNS the constitutionality of the definitions
of the word “enterprise” contained in § 1961 (4) and the phrase
“pattern of racketeering activity” in § 1961 (5). Moore’s argu-
ment, as is forthrightly conceded in his brief, is foreclosed by
our decision in United States v. Campanale, 518 F.2d 352, 363
(9th Cir. 1975), cert. ¢ denied 423 US 108 0, 96 S.Ct. 777, 46
L.Ed.2d 638 (1976).
Roza’s claim that the statute does not apply to legitimate
business enterprises is similarly foreclosed by prior decisions in
this circuit. See United States v. Rone, 598 F.2d 564 (9th Cir.
1979), cert. denied, USS. , 100 S.Ct. 1345, 63 L.Ed.2d
780 (1980); United States v. Campanale, supra, at 364. Roza
also contends that the evidence was insufficient to sustain a
conviction under RICO. Roza’s knowledge that the stamps
were stolen and his activities as the gang’s fence are well docu-
mented in the record.
We affirm each of the convictions under RICO.
Vv.
WARRANTLESS SEIZURE OF ROZA’'S FERRARI
Roza challenges the constitutionality of the seizure of his
Ferrari in the Sacramento hotel parking lot. The postal inspec-
tors who arrested Roza impounded the automobile and later
searched it pursuant to a search warrant. At the time that Roza
was arrested, he was several hundred feet away from the auto-
mobile, and it was legally parked in a public lot. The inspectors
impounded the car, acting upon the tip of informant Escove,
who had been told by Roza that some $30,000 worth of stamps
were located in the trunk.
This court upheld the warrantless search of an automobile
under nearly identical circumstances in United States v. McClain,
531 F.2d 431 (9th Cir.), cert. denied, 429 U 5,97 S.Ct.
102, 50 L.Ed.2d 101 (1976). Here, probable cause was provided
by Escove’s tip. Circumstances were sufficiently exigent in that
an accomplice could well have moved the automobile or re-
moved the stamps. The action of the inspectors in securing the
automobile pending issuance of a search warrant was entirely
proper.2
—Sa—
VI.
FORFEITURE OF THE FERRARI
The jury returned a verdict of forfeiture against Roza’s
Ferrari pursuant to 18 U.S.C. §1963(a)(1). The evidence
showed that Consolidated Coin Company was the depository
of funds which Roza had received from fencing the stolen
stamps, and that the Ferrari was purchased with a $35,000
check drawn on Consolidated Coin’s account. Roza challenges
the sufficiency of this evidence to support a verdict of for-
feiture. The evidence was sufficient to demonstrate that Con-
solidated Coin was an enterprise conducted in violation of
RICO. Because the Ferrari was purchased with funds on deposit
with Consolidated Coin, the jury could properly find that it was
an asset of Consolidated Coin, even though purchased in the
name of another. The evidence therefore was sufficient to sup-
port the jury’s verdict of forfeiture.
VIL.
LIMITATION ON CROSS-EXAMINATION
OF THE WITNESS ESCOVE
Roza’s claim that his ability to cross-examine the witness
Joseph Escove was improperly limited is not supported by the
record. Escove provided the names of several dealers to whom
he had sold the stolen stamps before he announced his intention
to name no others without an order from the court. The trial
court sustained the prosecution’s objection to further inquiry
on relevancy grounds, but left the matter open for Roza’s coun-
sel to develop later in the trial. Counsel did not avail himself
of the opportunity to reopen the issue. Roza’s argument as to
the possible relevancy of the testimony sought is speculative
and contradicted by Escove’s direct testimony which quite
clearly indentified Roza as the source of the stolen postage
stamps. The trial court's ruling on the Escove testimony was not
in error.
Vil.
SUFFICIENCY OF THE EVIDENCE
Smith challenges the sufficiency of the evidence to support
his conviction under count five of the indictment for causing
the postage stamps stolen from the Martinez, California, post
office to be transported in interstate commerce in violation of
18 U.S.C. §2314. Smith attacks the evidence on two grounds:
(1) there is no evidence that Smith physically “caused” the
stamps to be transported across state lines. and (2) there is no
evidence that Smith knew that the stamps were to be transport-
ed in interstate commerce.
Neither an intention to use interstate facilities nor know-
ledge that they will be used is an element of a §2314 offense.
See, e.g., United States v. Masters, 456 F.2d 1060, 1061 (9th
Cir. 1073). Smith’s lack of knowledge that the stamps were to
be transported across state lines is therefore irrelevant. The test
for causation under § 2314 is whether interstate transportation
of stolen goods was a reasonably foreseeable consequence of the
defendant’s actions. Masters, supra.
The evidence showed that Simi th aided in the transportation
of the stamps from the scene of the burglary to Eggers’ home in
South Lake Tahoe. After unloading and inventorying the
stamps, the defendants reloaded the stamps into Bailey's car.
after being informed that Bailey intended to take them to his
fence. The movement of the stolen stamps across state lines
was thus a reasonably forseeable consequence of Smith’s partici-
pation in the burglary and transporting of the stamps to
South Lake Tahoe. Viewing the evidence in the light most
favorable to the government, we cannot say that it was in-
sufficient to convict Smith on count five of the indictment.
IX.
MERGER OF OFFENSES
Smith raises the issue whether his conviction for postal
burglary under 18 U.S.C. §2115 merges into his conviction for
theft of government property under 18 U.S.C. §641. We find
that each statute describes a separate offense, and that each
contains an element which the other does not. §2115 requires
that forcible entry of a post office be proven; under $641,
forcible entry need not necessarily be proven. §641 requires
roof of theft while §2115 does not. See Clemas v. United
States 423 F.2d 461 (8th Cir.), cert. denied, 398 US 968.
Ct. 2183, 26 L.Ed.2d 554 (1970). The Supreme Court.
reached a similar conclusion under a pair of older postal burg-
lary and theft statutes. See M vy. Devine, 237 US. Gotta
35 S.Ct. 712, 59 L.Ed. 1153 (191 Prinsg +. nuted
, 352 US. 322, 328, n.9, 77 5 we also | L.Ed. 2d 370
( 57). It was not error to punish Smith for the separate vio-
lations.
X.
PRIOR CRIME EVIDENCE
We assume without deciding that the court erred in allowing
Eggers to testify as to Smith’s prior burglaries with Ed Witwick.
-
&*.
7.
See Fed. R. Evid. 404(b). We agree with the government, how-
ever, that any error here was harmiess beyond a reasonable
doubt. The evidence of Smith’s guilt was overwhelming, and the
reference to the previous burglaries brief and general. The
government did not refer to this evidence in its closing argu-
ment.
XI.
SANDSTROM VIOLATION
Finally, Smith asserts that the jury instruction on inferring
intent violates the Supreme Court’s decision in Sandstrae
442 US. 510, 99 S.Ct. 2450, 61 L.Ed. 2d 39 (1979).
is court, however, has recently approved in a post-Sandstrom
decay an instruction virtually identical to that challenged
here. See United States vy. Ross, F.2d __, slip op. p. 3807
(9th Cir., June 19, 1980). The irstruction did not amount to
reversible error.
The judgment of the trial court and conviction of each of
the defendants is
AFFIRMED.
FOOTNOTES
testimony constituted a denial of the defendants’ right to con-
, 615 F.2d 878 (9th Cir. 1980);
“Cases cited by Roza are inapposite. United States v. Heilman.
(9th Cir. 1970), was predicated upon a warrantless search fol-
I For the purposes of this appeal, we assume that Namahoe’s
frontation, and that the error requires evaluation under the
“beyond a reasonable doubt” standard. See United Stats ‘eosin.
571 F.2d 1069 (9th Cir. 1977), cert. ig
98 S.Ct. 1453, 55 L.Ed.2d 497 ( iay
556 F.2d 442 (9th Cir. 1977), involved a warrantless inventory
search with no probable cause. Ramon v. Cupp, 423 F.2d 248
lowing impoundment after all possible exigencies had been
precluded.
APPENDIX B
iN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee, No. 79-1493
vs. ORDER
FRANK VERNON ROZA., JR..,
Defendant-Appellant.
Before: ANDERSON and FARRIS, Circuit Judges, and
RICHEY ,* District Judge. .
The Petition for rehearing of appellant Frank Vernon
Roza, Jr., is DENIED.
*The Honorable Mary Anne Richey, United States District Judge, District
of Arizona, sitting by designation.
allie
APPENDIX C
IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA,
| Plaintiff-Appellee, No. 79-1493
v. ORDER
FRANK VERNON ROZA. JR..,
Defendant-Appellant.
Before: ANDERSON and FARRIS, Circuit Judges.
The application of Frank Vernon Roza, Jr., for stay of
issuance of the mandate is DENIED.
—lla-—
APPENDIX D
CHAPTER 96—RACKETTER INFLUENCED AND
CORRUPT ORGANIZATIONS
Sec. Sec.
1961. Definitions 1565. Venue and process.
1962. Prohibited racketeering 1966. Expedition of actions.
activities. 1967. Evidence.
1963. Criminal penalties. 1968. Civil investigative
1964. Civil remedies. demand.
1970 Amendment. Pub. L. 91-452. Title [IX §901(a), Oct. 15,
1970, 84 Stat. 941, added chapter 96 and items 1961-1968.
§ 1961 . Definitions
As used in this chapter—
(1) “Racketeering activity”’ means (A) any act or threat
involving murder, kidnaping, gambling, arson, robbery,
bribery, extortion, or dealing in narcotic or other dangerous
drugs, which is chargeable under State law and punishable
by imprisonment for more than one year;(B) any act which
is indictable under any of the following provisions of title
18, United States Code: Section 201 (relating to bribery),
section 224 (relating to sports bribery), sections 471, 472,
and 473 (relating to counterfeiting), section 659 (relating to
theft from interstate shipment) if the act indictable under
section 659 is felenious, section 664 (relating to embezzie-
ment from pensiun and welfare funds), sections 891-894
(relating to extortionate credit transactions), section 1084
(relating to the transmission of gambling information),
section 1341 (relating to mail fraud), section | 343 (relating
to wire fraud), section 1503 (relating to obstruction of jus-
tice), section 1510 (relating to obstruction of criminal inves-
tigations), section 1511 (relating to the obstruction of State
or local law enforcement), section 1951 (relating to inter-
ference with commerce, robbery, or extortion), section
1952 (relating to racketeering), section 1953 (relating to
interstate transportation of wagering paraphernalia), section
1954 (relating to unlawful welfare fund payments), section
1955 (relating to the prohibition of illegal gambling busi-
nesses), sections 2314 and 2315 (relating to interstate trans-
portation of stolen property), sections 2341-2346 (relating
to trafficking in contraband cigarettes), sections 2421-24
(relating to white slave traffic), (C) any act which is indict-
—12a—
able under title 29, United States Code, section 186 (dealing
with restrictions on payments and loans to labor organiza-
tions) or section 501(c) (relating to embezzlement from
union funds), or (D) any offense involving bankruptcy
fraud, fraud in the sale of securities, or the felonious manu-
facture, importation, receiving, concealment, buying,
selling, or otherwise dealing in narcotic or other dangerous
drugs, punishable under any law of the United States;
(2) “State” means any State of the United States, the
District of Columbia, the Commonwealth of Puerto Rico,
any territory or possession of the United States, any politi-
cal subdivision, or any department, agency, or instrumen-
tality thereof;
(3) “person” includes any individual or entity capable
of holding a legal or beneficial interest in property;
(4) “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;
(5) “‘pattern of racketeering activity’” requires at least
two acts of racketeering activity, one of which occurred
after the effective date of this chapter and the last of which
occurred within ten years (excluding any period of imprison-
ment) after the commission of a prior act of racketeering
activity ;
(6) “unlawful debt” means a debt (A) incurred or con-
tracted in gambling activity which was in violation of the
law of the United States, a State or political subdivision ©
thereof, or which is unenforceable under State or Federal
law in whole or in part as to principal or interest because of
the laws relating to usury, and (B) which was incurred in
connection with the business of gambling in violation of
the law of the United States, a State or political subdivision
thereof, or the business of lending money or a thing of value
at a rate usurious under State or Federal law, where the
usurious rate is at least twice the enforceable rate:
(7) “racketeering investigator’* means any attorney or
investigator so designated by the Attorney General and
charged with the duty of enforcing or carrying into effect
this chapter;
(8) “racketeering investigation” means any inquiry con-
ducted by any racketeering investigator for the purpose of
ascertaining whether any person has been involved in any
violation of this chapter or of any final order, judgment. or
decree of any court of the United States, duly entered in
any case or proceeding arising under this chapter;
—l3a—
(9) “documentary material’ includes any book, paper,
document, record, recording, or other material; and
(10) “Attorney General” includes the Attorney General
of the United States, the Deputy Attorney General of the
United States, any Assistant Attorney General of the United
States, or any employee of the Department of Justice or
any employee of any department or agency of the United
States so designated by the Attorney General to carry out
the powers conferred on the Attorney General by this chap-
er. Any department or agency so designated may use in
investigations authorized by this chapter either the inves-
tigative provisions of this chapter or the investigative power
of such department or agency otherwise conferred by law.
Added Pub.L. 91-452, Title IX, §901(a), Oct. 15, 1970, 84
Stat. 941, and amended Pub.L. 95-575, §3(c), Nov. 2, 1978,
92 Stat. 2465.
Amendment Effective October 1, 1979
Pub.L. 95-598, Title III, §314g), Title IV, $402(a), Nov.
6, 1978, 92 Stat. 2677, 2682, provided that, effective Oct. 1,
1979, ‘fraud connected with a case under title 11’’ will be sub-
stituted for ‘bankruptcy fraud” in par. (1XD) of this section.
§ 1962. Prohibited activities
(a) It shall be unlawful for any person who has received
any income derived, directly or indirectly, from a pattern of
racketeering activity or through collection of an unlawful
debt in which such person has participated as a principal
within the meaning of section 2, title 18, United States
Code, to use or invest, directly or indirectly, any part of
- such income, or the proceeds of such income, in acquisition
of any interest in, or the establishment or operation of, any
enterprise which is engaged in, or the activities which affect,
interstate or foreign commerce. A purchase of securities on
the open market for purposes of investment, and without
the intention of controlling or participating in the control
of the issuer, or of assisting another to do so, shall not be
unlawful under this subsection if the securities of the issuer
held by the purchaser, the members of his immediate fam-
ily, and his or their accomplices in any pattern or racketeer-
ing activity of the collection of an unlawful debt after such
purchase do not amount in the aggregate to one percent of
the outstanding securities of any one class, and do not
confer, either in law or in fact, the power to elect one cr
more directors of the issuer.
—|4a—
7%
(b) It shall be unlawful for any person through a pattern
of racketeering activity or through collection of an unlaw-
ful debt to acquire or maintain, directly or indirectly, any
interest in or control of any enterprise which is engaged in,
or the activities of which affect, interstate or foreign com-
merce. .
(c) 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.
(d) It shall be unlawful for any person to conspire to
violate any of the provisions of subsections (a), (b), or (c)
of this section.
Added Pub.L. 91-452, Title IX, §901(a), Oct. 15, 1970, 84
Stat. 942.
§ 1963. Criminal penalties
(a) Whoever violates any provision of section 1962 of
this chapter shall be fined not more than $25,000 or im-
prisoned not more than twenty years, or both, and shail
forfeit to the United States (1) any interest he has acquired
or maintained in violation of section 1962, ard (2) any in-
terest in, security of, claim against, or property or contrac-
tual right of any kind affording a source of influence over,
any enterprise which he has established, operated, control-
led, conducted, or participated in the conduct of, in viola-
tion of section 1962.
‘(b) In any action brought by the United States under
this section, the district courts of the United States shall
have jurisdiction to enter such restraining orders or prohi-
bitions, or to take such other actions, including, but not
limited to, the acceptance of satisfactory performance
bonds, in connection with any property or other interest
subject to forfeiture under this section, as it shall deem
proper.
(c) Upon conviction of a person under this section, the
court shall authorize the Attorney General to seize all
property or other interest declared forfeited under this
section upon such terms and conditions as the court shall
deem proper. If a property right or other interest is not
exercisable or transferable for value by the United States,
it shall expire, and shall not revert to the convicted person.
All provisions of law relating to the disposition of property,
or the proceeds from the sale thereof, or the remission or
—1S5a—
74
mitigation of forfeitures for violation of the customs laws,
and the compromise of claims and the award of compensa-
tion to informers in respect of such forfeitures shall apply
to forfeitures incurved, or alleged to have been incurred,
under the provisions of this section, insofar as applicable
and not inconsistent with the provisions hereof. Such duties
as are imposed upon the collector of customs or any other
person with respect to the disposition of property under the
customs laws shall be performed under this chapter by the
Attorney General. The United States shall dispose of all
such property as soon as commercially feasible, making due
provision for the rights of innocent persons.
Added Pub.L. 91-452, Title IX §901(a), Oct. 15. 1970,
Stat. 943.
§ 1964. Civil remedies
(a) The district courts of the United States shall have
jurisdiction to prevent and restrain violations of section
1962 of this Chapter by issuing appropriate orders, includ-
ing, but not limited to, prohibiting any person from engag-
ing in the same type of endeavor as the enterprise engaged
in, the activities of which affect interstate or foreign com-
merce; or ordering dissolution or reorganization of any en-
terprise, making due provision for the rights of innocent
persons.
(b) The Attorney General may institute proceedings
under this section. In any action brought by the United
States under this section, the court shall proceed as soon as
practicable to the hearing and determination thereof. Pend-
ing final determination thereof, the court may at any time
enter such restraining orders or prohibitions, or take such
other actions, including the acceptance of satisfactory per
formance bonds, as it shall deem proper.
(c) Any person injured in his business or property by
reason of a violation of section {962 of this chapter may
sue therefor in any appropriate United States district court
and shall recover threefold the damages he sustains and the
cost of the suit, including a reasonable attorney's fee.
(d) A final judgment or decree rendered in favor of the
United States in any criminal proceeding brought by the
United States under this chapter shail estop the defendant
from denying the essential allegations of the criminal of-
fense in any subsequent civil proceeding brought by the
United States.
Added Pub.L. 91-452, Title IX, §901(a), Oct. 15, 1970.
84 Stat, 943.
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§ 1965. Venue and process
(a) Any civil action or proceding under this chapter
against any person may be instituted in the district court of
the United States for any district in which such person re-
sides, is found, has an agent, or transacts his affairs.
(b) In any action under section 1964 of this chapter in
any district court of the United States in which it is shown
that the ends of justice require that other parties residing in
any other district be brought before the court, the court
may cause such parties to be summoned, and process for
that purpose may be served in any judicial district of the
United States by the marshal thereof.
(c) In any civil or criminal action or proceeding insti-
tuted by the United States under this chapter in the district
court of the United States for any judicial district, subpenas
issued by such court to compel the attendance of witnesses
may be served in any other judicial district, except that in
any civil action or proceeding no such subpena shall be is-
sued for service upon any individual who resides in another
district at a place more than one hundred miles from the
place at which such court is held without approval given by
a judge of such court upon a showing of good cause.
(d) All other process in any action or proceeding under
this chapter may be served on any person in any judicial
district in which such person resides, is found, has an agent,
or transacts his affairs.
_ Added Pub.L. 91-452, Title. IX, §901(a), Oct. 15, 1970, 84
Stat. 944.
§ 1966. Expedition of actions
In any civil action instituted under this chapter by the
United States in any district court of the United States. the
Attorney General may file with the clerk of such court a
_ certificate stating that in his opinion the case is of general
public importance. A copy of that certificate shall be furn-
ished immediately by such clerk to the chief judge or in his
absence to the presiding district judge of the district in
which such action is pending. Upon receipt of such copy.
such judge shall designate immediately a judge of that dis-
trict to hear and determine action. The judge so designated
shall assign such action for hearing as soon as practicable,
participate in the hearings and determination thereof, and
cause such action to be expedited in every way.
Added Pub.L. 91-452, Title IX, §901(a), Oct. 15, 1970,
84 Stat. 944.
-17a-
Legislative History. For legislative history and purpose of
Pub.L. 91-452, see 1970 U.S. Code Cong. and Adm. News,
p. 4007.
§ 1967.Evidence
In any proceeding ancillary to or in any civil action in-
stituted by the United States under this chapter the pro-
ceedings may be open or closed to the public at the discre-
tion of the court after consideration of the rights of affect-
ed persons.
Added Pub.L. 91-452, Title [IX $901(a), Oct. 15. 1970, 84
Stat. 944.
§ 1968. Civil investigative demand
(a) Whenever the Attorney General has reason to be-
lieve that any person or enterprise may be in possession,
custody, or control of any documentary materials relevant
to a racketeering investigation, he may, prior to the institu-
tion of a civil or criminal proceeding thereon, issue in writ-
ing, and cause to be served upon such person, a civil investi-
gative demand requiring such person to produce such
material for examination.
(b) Each such demand shall—
(1) state the nature of the conduct constituting the
alleged racketeering violation which is under investiga-
tion and the provision of law applicable thereto;
(2) describe the class or classes of documentary
material produced thereunder with such definiteness
and certainty as to permit such material to be fairly
identified;
(3) state that the demand is returnable forthwith or
prescribe a return date which will provide a reasonable
period of time within which the material so demanded
may be assembled and made available for inspection and
copying or reproduction; and
(4) identify the custodian to whom such material
shall be made available.
(c) No such demand shall—
(1) contain any requirement which would be held to
be unreasonable if contained in a subpena duces tecum
issued by a court of the United States in aid of a grand
jury investigation of such alleged racketeering violation;
or
(2) require the production of any documentary evi-
dence which would be privileged from disclosure if de-
—18a—
a
manded by a subpena duces tecum issued by a court of
the United States in aid of a grand jury investigation of
such alleged racketeering violation.
(d) Service of any such demand or any petition filed
under this section may be made upon a person by—
(1) delivering a duly executed copy thereof to any
partner, executive officer, managing agent, or general
agent thereof, or to any agent thereof authorized by
appointment or by law to receive service of process on
behalf of such person, or upon any individual person;
(2) deliverying a duly executed copy thereof to the
principal office or place of business of the person to be
served; or
(3) depositing such copy in the United States mail,
by registered or certified mail duly addressed to such
person at its principal office or place of business.
(e) A verified return by the individual serving any such
demand or petition setting forth the manner of such service
_ Shall be prima facie proof of such service. In the case of
service by registered or certified mail, such return shall be
accompanied by the return post office receipt of delivery of
such demand.
(f) (1) The Attorney General shall designate a rack-
eteering investigator to serve as racketeer document custo-
dian, and such additional racketeering investigators as he
‘ shall determine from time to time to be necessary to serve .
as deputies to such officer.
(2) Any person upon whom any demand issued under
this section has been duly served shall make such material
available forinspection and copying or reproduction to the
custodian designated therein at the principal place of
business of such person, or at such other place as such
custodian and such person thereafter may agree and pre-
scribe in writing or as the court may direct, pursuant to
this section on the return date specified in such demand,
or on such later date as such custodian may prescribe in
writing. Such person may upon written agreement between
such person and the custodian substitute for copies of all
or any part of such material originals thereof.
(3) The custodian to whom any documentary material
is so delivered shall take physical possession thereof, and
shall be responsible for the use made thereof and for the
return thereof pursuant to this chapter. The custodian may
cause the preparation of such copies of such documentary
material as may be required for official use under regulations
-—19a—
which shall be promulgated by the Attorney General. While
in the possession of the custodian, no material so produced
shall be available for examination, without the consent of
the person who produced such material, by any individual
other than the Attorney General. Under such reasonable
terms and conditions as the Attorney General shall pre-
scribe, documentary material while in the possession of
the custodian shall be available for examination by the
person who produced such material or any duly authorized
representatives of such person.
(4) Whenever any attorney has been designated to
appear on behalf of the United States before any court or
grand jury in any case or proceeding involving any alleged
violation of this chapter, the custodian may deliver to such
attorney such documentary material in the possession of the
custodian as such attorney determines to be required for use
in the presentation of such case or proceeding on behalf of
the United States. Upon the conclusion of any such case or
proceeding, such attorney shall return to the custodian any
documentary material so withdrawn which has not passed
into the control of such court or grand jury through the
introduction thereof into the record of such case or pro-
ceeding.
_(5) Upon the completion of—
(i) the racketeering investigation for which any
po ysinanted material was produced under this chapter,
an
(ii) any case or proceeding arising from such investi-
gation, the custodian shall return to the person who pro-
duced such material all such material other than copies
thereof made by the Attorney General pursuant to this
subsection which has not passed into the control of any
court or grand jury through the introduction thereof
into the record of such case or proceeding.
(6) When any documentary material has been produced
by: any person under this section for use in any racketeering
investigation, and no such case or proceeding arising there-
from has been instituted within 2 reasonable time after com-
pletion of the examination and analysis of all evidence
assembled in the course of such investigation, such person
shall be entitled, upon written demand made upon the
Attorney General, to the return of all documentary material
other than copies thereof made pursuant to this subsection
so produced by such person.
—20a—
(7) In the event of the death, disability, or separation
from service of the custodian of any documentary material
produced under any demand issued under this section or the
Official relief of such custodian from responsibility for the
custody and control of such material, the Attorney General
shall promptly —
(i) designate another racketeering investigator to
serve as custodian thereof, and
(ii) transmit notice in writing to the person who
produced such material as to the identity and address of
the successor so designated.
Any successor so designated shall have with regard to such
materials all duties and responsibilities imposed by this
section upon his predecessor in office with regard thereto,
except that he shall not be held responsible for any default
or dereliction which occurred before his designation as
custodian.
(g) Whenever any person fails to comply with any civil
investigative demand duly served upon him under this
section or whenever satisfactory copying or reproduction
of any such material cannot be done and such person re-
fuses to surrender such material, the Attorney General may
file, in the district court of the United States for any judi-
cial district in which such person resides. is found, or trans-
acts business, and serve upon such person a petition for an
order of such court for the enforcement of this section, ex-
cept that if such person transacts business in more than one
such district such petition shall be filed in the district in
which such person maintains his principal place of business,
or in such other district in which such person transacts
business as may be agreed upon by the parties to such
petition.
(h) Within twenty days after the service of any such
demand upon any person, or at any time before the return
date specified in the demand, whichever period is shorter,
such person may file, in the district court of the United
States for the judicial district within which such person
resides, is found, or transacts business, and serve upon such
custodian a petition for an order of such court modifying or
setting aside such demand. The time allowed for compliance
with the demand in whole or in part as deemed proper and
ordered by the court shall not run during the pendency of
such petition in the court. Such petition shall specify each
ground upon which the petitioner relies in seeking such
relief, and may be based upon any failure of such demand
—2la-—
s 4%
to comply with the provisions of this section or upon any
constitutional or other legal right or privilege of such per-
son.
(i) At any time during which any custodian is in cus-
tody or control of any documentary material delivered by
any person in compliance with any such demand, such per-
son may file, in the district court of the United States for
the judicial district within which the office of such custo-
dian is situated, and serve upon such custodian a petition
for an order of such court requiring the performance by
such custodian of any duty imposed upon him by this
section.
(j) Whenever any petition is filed in any district court
of the United States under this section, such court shall
have jurisdiction to hear and determine the matter so pre-
sented, and to enter such order or orders as may be required
to carry into effect the provision of this section.
Added Pub.L. 91-452, Title [X, §$901(a), Oct. 15, 1970,
84 Stat. 944.
Legislative History. For legislative history and purpose of
— see 1970 U.S. Code Cong. and Adm. News,
p. ;
—22a—
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.