United States v. London

UNITED STATES COURT OF APPEALS
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
FOR THE FIRST CIRCUIT

No. 93-1898

UNITED STATES,

Appellee,

v.

MICHAEL B. LONDON,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Mark L. Wolf, U.S. District Judge]

Before

Cyr, Circuit Judge,

Coffin, Senior Circuit Judge,

and Bownes, Senior Circuit Judge.

Henry D. Katz for appellant.

Nina S. Goodman, Attorney, with whom, David S. Kris, Attorney,

Department of Justice, Criminal Division, Appellate Section, Donald K.

Stern, United States Attorney, Dina M. Chaitowitz, Assistant United

States Attorney, and Michael Kendall, Assistant United States

Attorney, were on brief for appellee.

September 18, 1995

BOWNES, Senior Circuit Judge. After a trial that
BOWNES, Senior Circuit Judge.

spanned the better part of two months, a jury convicted

defendant-appellant Michael B. London of conspiring to

conduct and actually conducting the affairs of an enterprise

through a pattern of racketeering activity ("RICO conspiracy"

and "RICO substantive"), money laundering, failing to file

currency transaction reports ("CTRs"), conspiring to commit

extortion, and aiding and abetting extortion. Subsequent to

the jury verdict, London also pleaded guilty to tax evasion.

For his crimes, London was sentenced to 188 months'

imprisonment and fined $500,000. In addition, he agreed to

forfeit $865,000.

In this appeal, London challenges his convictions,

arguing that the district court erred: (1) in failing to

suppress certain evidence relevant to his counts of

conviction; (2) in instructing the jury on the law regarding

failure to file CTRs; and (3) in failing to grant his motion

for a judgment of acquittal on the money laundering and RICO

counts. After carefully considering the parties' arguments,

we affirm.

I.
I.

A. Factual Background
A. Factual Background

London operated Heller's Cafe ("Heller's), a bar in

Chelsea, Massachusetts. He also ran a check-cashing service,

known as M & L Associates ("M & L"), out of a small enclosed

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area in the bar. M & L charged its customers a 1% or 1.5%

commission on each check cashed. Both Heller's and M & L had

at least one employee other than London.

The evidence at trial demonstrated that bookmakers

tended to frequent Heller's and to use M & L as a check-

cashing service. Sometimes, M & L cashed bookmaker checks

that banks would not accept. For example, some checks were

neither made out by nor payable to the bookmakers (or

bookmakers' agents) who were cashing them. Others were made

out either to fictitious names or to real persons or entities

who were not to receive the funds. London neither asked

about the names on the checks he cashed nor required that the

checks be endorsed. And before December 17, 1986 -- the day

on which federal agents executed a search warrant at

Heller's, see infra at 6 -- London never filed a CTR

notifying the Internal Revenue Service ("IRS") of his many

currency transactions involving more than $10,000. See 31

U.S.C. 5313(a) (requiring financial institutions to report

currency transactions in the manner prescribed by the

Secretary of the Treasury) and 31 C.F.R. 103.11(i)(3)

(check-casher is a financial institution) and 31 C.F.R.

103.22(a)(1) (financial institutions must report all currency

transactions involving more than $10,000 to the IRS).

London's operating procedures were a boon to his

bookmaker customers. Not only did London provide these

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customers with an immediate and untraceable source of cash to

pay their various expenses (including gamblers' winnings), he

enabled them to accept checks from their own customers.

This, in turn, increased business volume, for the ability to

pay gambling debts by check encouraged gamblers to make

larger and more frequent bets. It also made it easier for

out-of-state gamblers to do business with local bookmakers,

and possible for some gamblers to pay debts with company

funds (and thereby gamble with money on which they paid no

taxes).

London's promotion of bookmaking often took a more

active form. In 1986, London operated a bookmaking operation

with one Kenny Miller. He also helped run one Dominic

Isabella's bookmaking operation while Isabella was ill.

Finally, London acted as a "pay and collect" man for many of

his bookmaker customers, making payments to winning gamblers

and collecting payments from losers.

London also assisted Vincent Ferrara, the leader of

an organized crime group, in collecting "rent" (i.e.,

protection money) from bookmakers. London identified certain

of his bookmaker customers to Ferrara, telling him "anybody I

get you get." London then summoned the bookmakers to

Heller's to meet with Ferrara, who demanded that they pay him

anywhere from $500 to $1000 (or more) per month for

"protection" and help in debt collection. London collected

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rent payments and, at least once, passed along a request for

debt collection assistance from a bookmaker who had been

induced to accept Ferrara's protection.

As stated above, London never filed a CTR with the

IRS prior to the execution of the search warrant on

December 17, 1986. From December 18, 1986, through

December 31, 1988, however, he filed 211 CTR's on behalf of M

& L. Although London had instructed his customers to make

certain that each check was for less than $10,000, London did

cash individual checks that were in amounts greater than

$10,000. When he cashed a group of checks for the same

customer, London would often deposit the checks on different

days or in different bank accounts. There was testimonial

evidence tending to indicate that London was aware of the

statutory and regulatory reporting requirements during the

period in which he failed to file any CTRs with the IRS.

B. Procedural History
B. Procedural History

On October 28, 1986, in response to an application

and affidavit made pursuant to an on-going investigation of

London, his businesses, and his associates, the district

court issued two orders authorizing the government to conduct

electronic surveillance at Heller's. The first order

authorized, for a thirty-day period, the interception of oral

communications in and adjacent to the enclosed area in which

M & L operated; the second authorized, also for a thirty-day

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period, the recording of wire communications made from two

telephones located behind the bar. In order to minimize the

interception of otherwise non-interceptable communications,

the court's orders limited surveillance to times when named

targets of the investigation were on Heller's premises. On

December 3, 1986, the court extended each of the orders for

an additional thirty days. Evidence derived from these

interceptions was introduced against London at trial.

On December 17, 1986, federal agents applied to a

magistrate judge for a warrant authorizing them to search

Heller's for evidence of unlawful gambling, loansharking,

distribution of narcotics, money laundering, and failure to

file CTRs. The magistrate judge issued the warrant,

authorizing the agents to search "Heller's Cafe, which

occupies the first floor and basement of 110 Chestnut Street"

and to seize "books and records, ledgers, correspondence,

notes, slips, checks and any other documents, including bank

records, which reflect unlawful gambling, loansharking,

narcotics distribution, and failure to file currency

transaction reports; and U.S. currency which constitutes

proceeds of these offenses." The agents executed the warrant

later that day, and seized, inter alia, almost all of the

records found in the enclosed area from which M & L operated.

Evidence seized in the course of this search was introduced

against London at trial.

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On April 11, 1990, a federal grand jury returned a

two-count indictment charging London with income tax evasion.

On May 10, 1990, the grand jury returned a fifty-one count

superseding indictment charging London with, inter alia, the

counts of conviction: one count of RICO conspiracy, 18

U.S.C. 1962(d); one count of RICO substantive, 18 U.S.C.

1962(c); twelve counts of money laundering, 18 U.S.C.

1956(a)(1); twelve counts of failing to file CTRs, 31 U.S.C.

5313(a) and 5322(b); one count of conspiring to commit

extortion, 18 U.S.C. 1951; two counts of aiding and

abetting extortion, 18 U.S.C. 2 and 1951; and one count of

tax evasion for tax year 1985, 26 U.S.C. 7201. On

September 5, 1991, the grand jury returned a second

superseding indictment which charged no new offenses but

brought the indictment within the purview of the United

States Sentencing Guidelines by extending the period of the

alleged RICO conspiracy to after November 1987.

On August 17, 1992, the district court orally

denied London's previously-filed motion to suppress the

evidence seized during the December 17, 1986, search of

Heller's. On August 18, 1992, the court issued a written

memorandum and order denying London's previously-filed motion

to suppress the fruits of the electronic surveillance.

Trial commenced on January 4, 1993, and concluded

on February 19, 1993, when the jury returned guilty verdicts

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on the counts of conviction listed above. The other counts

contained in the second superseding indictment either had

been dismissed by the government prior to trial or were

dismissed by the district court at trial. In addition, the

jury acquitted London on one money laundering count. On June

30, 1993, the district court sentenced London. This appeal

followed.

II.
II.

As set forth above, London's appellate arguments

fall into three main groups. First, London takes issue with

the district court's denial of his suppression motions.

Second, London challenges the jury instructions given in

connection with the counts of the second superseding

indictment charging him with failing to file CTRs. Third,

London makes sundry arguments that there was insufficient

evidence to support his money laundering and RICO

convictions. We discuss each of London's arguments in turn.

A. Denial of the Motion to Suppress the Fruits of the
A. Denial of the Motion to Suppress the Fruits of the

Electronic Surveillance
Electronic Surveillance

London contends that the district court erred in

denying his motion to suppress the fruits of the electronic

surveillance conducted at Heller's in 1986. He claims that

the aforementioned surveillance ran afoul of Title III of the

Omnibus Crime Control and Safe Streets Act of 1968, 18 U.S.C.

2510 et seq. ("Title III") -- the federal statute that

governs electronic surveillance -- in five ways: (1) no

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Department of Justice official designated in 18 U.S.C.

2516(1) had authorized the local United States Attorney to

apply for the initial interception orders; (2) the orders

improperly allowed the government to monitor conversations

relating to money laundering, which was not an offense for

which interception could be ordered, see 18 U.S.C.

2516(1)(a)-(o), on the date the interception orders issued;

(3) the government intercepted and disclosed extortion-

related conversations -- conversations pertaining to the

paying of "rent" to Ferrara -- beyond the scope of the

court's orders; (4) the court ordered and the government

employed inadequate minimization procedures under 18 U.S.C.

2518(5); and (5) the government's application misled the

district court as to the necessity for conducting electronic

surveillance, in violation of 18 U.S.C. 2518(1)(c).

Because we are not persuaded by any of these arguments, we

affirm the district court's denial of the suppression motion.

1. Internal Authorization under 18 U.S.C.
1. Internal Authorization under 18 U.S.C.

2516(1)
2516(1)

Title III compels local prosecutors to obtain

internal authorization from a statutorily-designated Justice

Department official prior to applying for a judicial

interception order. 18 U.S.C. 2516(1). Failure to comply

with this "central" provision of Title III requires

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suppression of the fruits of the unauthorized interception.

United States v. Giordano, 416 U.S. 505, 524-29 (1974). As

noted, London contends that the initial interception

application was not authorized by a statutorily-designated

Justice Department official. London is mistaken.

The government attached to its initial interception

application the first page of a two-page authorization

memorandum prepared on October 24, 1986, by William F. Weld,

then the Justice Department's Assistant Attorney General for

the Criminal Division, and the second page of the cover

letter which accompanied the Weld memorandum, which was

signed for Weld by Frederick D. Hess, the Justice

Department's Director of the Office of Enforcement Operations

of the Criminal Division. It is undisputed that Weld was a

statutorily-designated official and Hess was not. In

rejecting London's suppression motion, the district court

found that Weld had authorized the interception application

(as the application had stated) and that "the government

committed a collating error by providing page one of the Weld

approval letter followed by page two of a separate letter

written by Hess to Robert S. Mueller, III, Acting United

States Attorney for the District of Massachusetts."

London does not dispute the accuracy of the

district court's "collating error" finding; nor does he

disagree that the finding would validate the application if

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the district court was empowered to look beyond the face of

the application in deciding whether there had been proper

authorization. Relying on United States v. Chavez, 416 U.S.

562 (1974), and United States v. O'Malley, 764 F.2d 38 (1st

Cir. 1985), he instead argues that the finding cannot save

the government's application because the district court was

limited to a "facial analysis" of the authorization in

determining whether a statutorily-designated official had

approved the interception application. Even if his

construction of Chavez and O'Malley is correct (an issue on

which we express significant doubt but no formal opinion),

the facial analysis London advocates reveals that Weld -- and

not Hess -- authorized the interception application.

London's argument hinges entirely on the fact that

Hess signed on behalf of Weld the second page of the

miscollated authorizing papers that were attached to the

interception application. What it neglects to take into

account, however, is that Weld signed the first page, which

states at the top that it is a memorandum from "William F.

Weld, Assistant Attorney General, Criminal Division."

Furthermore, that same first page clearly indicates that the

Assistant Attorney General in charge of the Criminal Division

(i.e., Weld) authorized the application:

By virtue of the authority vested in
him by Section 2516 of Title 18, United
States Code, the Attorney General of the
United States has by Order Number 1088-

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85, dated March 28, 1985, specially
designated the Assistant Attorney General
in charge of the Criminal Division to
authorize applications for court orders
authorizing the interception of wire or
oral communication. As the duly
appointed Assistant Attorney General in
charge of the Criminal Division, this
power is exercisable by me. WHEREFORE,
acting under this delegated power, I
hereby authorize the above-described
[London] application to be made by any
investigative or law enforcement officer
of the United States as defined in
Section 2510(7) of Title 18, United
States Code.

Finally, nothing in the text of either page of the papers

presented to the district court even remotely suggests that

Hess, and not Weld, authorized the application.

We therefore reject London's argument that the

initial interception application was not authorized by a

statutorily-designated Justice Department official.

2. Interception of Conversations Relating to
2. Interception of Conversations Relating to

Money Laundering
Money Laundering

Title III specifies the offenses for which an

interception order may issue. 18 U.S.C. 2516(1)(a)-(o).

Money laundering in violation of 18 U.S.C. 1956 was so

specified by legislation that became effective October 27,

1986. Pub. L. 99-570, Title I, 1365(c), Oct. 27, 1986, 100

Stat. 3207-35. As noted, London argues that the initial

interception orders authorized the interception of

conversations relating to money laundering prior to the date

on which money laundering was added to 18 U.S.C. 2516(1)'s

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list of offenses. Even if we assume arguendo that the

initial interception orders did authorize the interception of

conversations relating to money laundering in violation of 18

U.S.C. 1956 (a position with which the government

forcefully disagrees and on which we take no position),

London's argument lacks a factual basis.

London claims that the district court's initial

interception orders issued on October 24, 1986, three days

before money laundering became a predicate offense under 18

U.S.C. 2516(1). The record reveals, however, that the

initial interception orders issued on October 28, 1986, not

October 24, 1986. Thus, money laundering in violation of 18

U.S.C. 1956 was an offense for which an interception order

could issue at the time of the initial interception orders

issued in this case.

We therefore reject London's argument that the

initial interception orders authorized the interception of

conversations relating to money laundering at a time when

money laundering was not a predicate offense under 18 U.S.C.

2516(1).

3. Interception and Disclosure of Extortion-
3. Interception and Disclosure of Extortion-

Related
Related

Conversations
Conversations

With certain exceptions, Title III prohibits the

interception and disclosure of conversations other than those

relating to the offenses specified in the district court's

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interception order. See generally 18 U.S.C. 2511, 2517,

and 2518(4)(c). As noted, London argues that the government

wrongfully intercepted and disclosed certain extortion-

related conversations (i.e., conversations concerning the

paying of "rent" to Ferrara) despite the fact that the

district court's initial interception orders did not specify

extortion in violation of 18 U.S.C. 1951 as a target

offense. London's claim of governmental overreaching in this

context is without merit.

Unlike London's first two arguments, the instant

one is not built upon a faulty factual basis; extortion in

violation of 18 U.S.C. 1951 was not a target offense listed

in the government's interception applications or the district

court's interception orders. This fact alone, though, does

not make the interception of the "rent" conversations

unlawful. Title III clearly contemplates that law

enforcement officials will, in the course of intercepting

conversations related to specified target offenses, intercept

conversations "relating to offenses other than those

specified in the order of authorization or approval." See 18

U.S.C. 2517(5). For example, an intercepted conversation

can relate to both a specified offense and to an unspecified

offense. In such a situation, the interception is unlawful

only when it is motivated by an illicit purpose -- e.g.,

"subterfuge" interceptions where the government applies to

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intercept conversations relating to offenses specified in 18

U.S.C. 2516(a)-(o) while intending to intercept

conversations relating to offenses for which interceptions

are unauthorized or for which it has no probable cause to

obtain an interception order. See United States v. Angiulo,

847 F.2d 956,980 (1st Cir.), cert.denied, 488 U.S. 852(1988).

Here, the intercepted "rent" conversations clearly

related to at least one offense -- operating a gambling

business in violation of 18 U.S.C. 1955 -- specified in the

initial authorization orders. The victims of the

rent/extortion scheme were bookmakers involved in illegal

gambling, and the intercepted conversations provided a means

of identifying them. Moreover, the district court

supportably found that there was no subterfuge involved in

the initial interception applications. See Angiulo, 847 F.2d

at 980 (clear-error reviewing standard applicable to finding

that government's wiretap application was not subterfuge).

Extortion, after all, is an enumerated offense under 18

U.S.C. 2516, and there would have been no need for the

government to engage in subterfuge unless it suspected that

extortion was taking place but lacked the probable cause

necessary to intercept conversations pertaining to extortion.

London makes no argument along these lines, and the record

does not suggest this sort of governmental deception. The

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government's interception of the "rent" conversations was

therefore not unlawful.

We still must consider whether the government acted

unlawfully in disclosing the rent conversations during the

proceedings below. The government argues that the disclosure

of such "other offense" evidence is permissible so long as

the information is related to an offense listed in the

initial authorization orders. Cf. United States v. Shields,

999 F.2d 1090, 1097 (7th Cir. 1993) ("Since the government

was free to release this information to a grand jury anyway

under the [authorization for the offenses listed in the Title

III order], it is difficult to see how the defendants were

harmed when the same facts were presented in the context of

different offenses."), cert. denied, 115 S. Ct. 515 (1994).

We need not reach the merits of this argument, however,

because we conclude that the district judge who issued the

initial interception orders impliedly and permissibly

authorized the disclosure of the conversations at issue.

Under 18 U.S.C. 2517(5), the government may

secure a court's blessing to disclose the contents of an

"other offense" interception in connection with a federal

prosecution. The relevant statutory provision permits

disclosure when the interception has been "authorized or

approved by a judge of competent jurisdiction where such

judge finds on subsequent application that the contents were

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otherwise intercepted in accordance with the provisions of

[Title III]. Such application shall be made as soon as

practicable." Id. It is settled that disclosure

authorization "can be implicitly obtained when a judge grants

a renewal of a wiretap after being advised of the essential

facts of the unspecified violation." United States v.

McKinnon, 721 F.2d 19, 23-24 (1st Cir. 1983). In other

words, "the disclosure in subsequent affidavits to the

issuing judge of material facts constituting or clearly

relating to other offenses satisfies the Government's

obligation to seek judicial authorization for the disclosure

and use of evidence inadvertently intercepted." Id. at 24

(citations and internal quotation marks omitted).

As the district court found in denying London's

suppression motion, there was implicit authorization in this

case. When the government applied for extensions of the

initial interception orders, its attached affidavit advised

the court of interceptions containing the essential facts of

the extortion violations:

London acts as a bank and account keeper
for other bookmaking and loansharking
operations . . . . [Also] London's
illegal businesses, and the illegal
businesses for which London keeps the
accounts, only operate with the consent
and protection of certain other persons,
to whom London and others pay a
percentage of their income . . . .
Further electronic surveillance is
necessary, however, to identify the
balance of the members of each

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organization and the relationship between
London, these organizations, and the
persons to whom `rent' is paid, as
discussed below.

The attached affidavit then detailed London's relationship

with Ferrara. Thus, the court's approval of the extension

application constituted both an implicit finding that the

extortion-related conversations were intercepted in

accordance with the provisions of Title III and permission

for the subsequent disclosure of the conversations. See

McKinnon, 721 F.2d at 23-24.

London complains that the affidavit not only failed

to seek approval for subsequent interceptions of extortion-

related conversations, but it also failed to alert the court

that some of the intercepted conversations related to "other

offense" evidence. While we certainly think it advisable

that the government provide issuing courts with this type of

notice, we note that it is not a sine qua non of implicit

authorization. We presume that the court read the supporting

affidavit with care, and took seriously its obligation to

police the interceptions that were taking place. We require

no more to infer implicit authorization. Cf. id. at 23

(supporting affidavits describing communications related to

other offenses sufficient to ground "reasonable . . .

conclu[sion]" that issuing judge approved of their

interception); see also United States v. Masciarelli, 558

F.2d 1064, 1068 (2d Cir. 1977) ("[W]e presume . . . that in

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renewing . . . the tap the judge carefully scrutinized th[e]

supporting papers and determined that the statute's

requirements had been satisfied.") (citation and internal

quotation marks omitted).

We therefore reject London's argument that the

interception and disclosure of the extortion-related

conversations violated Title III.

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4. Minimization under 18 U.S.C. 2518(5)
4. Minimization under 18 U.S.C. 2518(5)

Title III requires the government to conduct

electronic surveillance "in such a way as to minimize the

interception of communications not otherwise subject to

interception." 18 U.S.C. 2518(5). Without specifying any

wrongfully intercepted conversations, London asserts that

there was inadequate governmental minimization during the

interceptions at Heller's. Although London's argument on

this issue is a bit disjointed, two alleged inadequacies

emerge from his brief: (1) the court's order permitting

surveillance whenever a named target was on Heller's premises

(instead of a more restrictive order); and (2) the

government's policy of recording all conversations carried

out in Spanish unless and until a bilingual agent was

available to make minimization decisions. In the

circumstances of this case, we see no error in either the

court's order or the government's policy regarding

communications in Spanish.

In assessing whether the government's minimization

efforts pass muster under 18 U.S.C. 2518(5), we make an

objective assessment in light of the facts and circumstances

known to the government at the relevant points in time. See

Scott v. United States, 436 U.S. 128, 136-37 (1978). When

making this assessment, we tend to focus on (1) the nature

and complexity of the suspected crimes; (2) the thoroughness

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of the government's precautions to bring about minimization;

and (3) the degree of judicial supervision over the

surveillance process. United States v. Uribe, 890 F.2d 554,

557 (1st Cir. 1989); Angiulo, 847 F.2d at 979. We also are

mindful that Title III "does not forbid the interception of

all nonrelevant conversations, but rather instructs the

agents to conduct the surveillance in such a manner as to

`minimize' the interception of such conversations." Scott,

436 U.S. at 140. This means that "[t]he government is held

to a standard of honest effort; perfection is usually not

attainable, and is certainly not legally required." Uribe,

890 F.2d at 557.

London's minimization arguments do not call into

question any specified acts of the intercepting agents;

instead, they implicate the thoroughness of certain of the

court's and government's minimization precautions. In other

words, they amount to claims that an implicit requirement

allegedly imposed on the government by Uribe and Angiulo --

that the government's precautions to bring about minimization

be sufficiently "thorough" to pass muster under 18 U.S.C.

2518(5) -- has not been met in this case, and that

suppression of all intercepted conversations is the

appropriate remedy. Even if we assume arguendo that London

can win total suppression without challenging the propriety

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of any particular interceptions, we see no merit in his

arguments.

London characterizes as insufficient the court's

"targeted individual must be on the premises" limitation by

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stating:

Perhaps, an undercover agent acting as a
patron, could [have] signal[led] when a
target was talking on a particular
telephone or near one of the bugs and
thereby minimize[d] the intrusion into
the privacy of innocent persons
conversing at other locations. Perhaps
monitoring agents could have been
directed to cease monitoring at any
device when a target was not heard on
that device.

He has not, however, effectively rebutted the government's

colorful assertion, made both to the district court and on

appeal, that "had an undercover agent remained inside the

small, intimate . . . Heller's Cafe to relay a signal every

time a target spoke into a surveillance device, London would

have identified him as quickly as Ali Baba in his cave would

have spotted a spy among his chosen forty." Nor has he

rebutted the government's sworn assertion that "agents were

instructed to and did cease monitoring when they determined

that none of the targets was a party to [a] conversation or

that only personal, non-criminal activity was discussed." In

our view, the former of these two assertions is sufficient to

respond to London's argument that there should have been an

undercover agent inside Heller's, and the latter effectively

undermines any suggestion that the monitoring agents were

free to listen in on the conversations of non-targeted

individuals.

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London's challenge to the government's policy

regarding Spanish conversations is answered more easily:

when an interpreter is not reasonably available, Title III

explicitly allows full-scale recording and post hoc

minimization of conversations carried out in foreign

languages. See 18 U.S.C. 2518(5) ("In the event the

intercepted communication is in a code or foreign language,

and an expert in that foreign language or code is not

reasonably available during the interception period,

minimization may be accomplished as soon as practicable after

such interception."). Although the above-quoted statutory

provision was not yet effective at the time of the

interceptions here at issue (it was passed prior to the

interceptions but went into effect thereafter), its existence

as pending legislation renders objectively reasonable the

government's policy -- which tracked the legislation --

regarding intercepted conversations carried out in Spanish.

This was a complex case involving a sophisticated

defendant, complicated financial dealings, and links to

organized crime. In view of this, we cannot say that either

the complained-of minimization precautions or the other

minimization precautions ordered by the court and taken by

the government were so lacking in thoroughness that they

violated Title III.

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We therefore reject London's minimization

arguments.

5. Necessity under 18 U.S.C. 2518(1)(c)
5. Necessity under 18 U.S.C. 2518(1)(c)

Title III dictates that the government's

interception application include "a full and complete

statement as to whether or not other investigative procedures

have been tried and failed or why they reasonably appear to

be unlikely to succeed if tried or to be too dangerous." 18

U.S.C. 2518(1)(c). We have interpreted this "necessity"

provision to mean that the statement should demonstrate that

the government has made "a reasonable, good faith effort to

run the gamut of normal investigative procedures before

resorting to means so intrusive as electronic interception of

telephone calls." United States v. Hoffman, 832 F.2d 1299,

1306-07 (1st Cir. 1987). London argues that the government's

application misled the court as to the need for electronic

surveillance by failing to mention that the government had

not engaged in the following investigative techniques: (1)

subpoenaing London's bank records; (2) utilizing two

confidential informants -- Francis McIntyre and John DeMarco

-- allegedly available to it; and (3) placing undercover

agents inside of Heller's. London's claims are not

convincing.

The first and third of London's claims are

difficult to fathom, as the affidavit attached to the

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25

interception application indicated both that the government

did review London's bank records (during an unrelated

investigation) prior to applying for the interception orders

and that undercover infiltration was not available because

"surveillance observations have disclosed a high degree of

consciousness by London and others to the possibility of law

enforcement scrutiny" and because London "requires two known

references prior to engaging in illegal transactions with a

person." Other than making the general and unpersuasive

argument that "visual surveillance by undercover agents" was

possible because Heller's "was fully accessible to the public

eye" and had no "back rooms," London has not taken issue with

the affidavit statements. See supra at 21 (noting, in a

different context, London's failure to rebut the government's

explanation why undercover agents could not insinuate

themselves into Heller's). And he certainly has not

explained how the affidavit statements themselves may have

been misleading. We consequently see no factual basis for

London's first and third claims.

As to the claim that the government misleadingly

failed to disclose the availability of McIntyre and DeMarco

as informants, London has not even attempted to rebut, by

pointing to contrary evidence, the district court's findings

that, at the time of the initial application, the government

reasonably believed (1) that McIntyre would not testify

-26-
26

against London; and (2) that DeMarco's "investigatory

potential . . . [was] immaterial to the investigation at

Heller's." In light of this, we cannot say that these

findings are clearly erroneous. See United States v.

Schiavo, 29 F.3d 6, 8 (1st Cir. 1994) (findings of fact made

after suppression hearing reviewed for clear error). And the

findings plainly undermine London's contention that the

failure to disclose McIntyre's and DeMarco's alleged

investigatory potential violated 18 U.S.C. 2815(1)(c).

We therefore reject London's argument that the

government misled the district court as to necessity when

applying for the initial interception orders.

B. Denial of the Motion to Suppress the Evidence Seized
B. Denial of the Motion to Suppress the Evidence Seized

During
During

the December 17, 1986, Search of Heller's
the December 17, 1986, Search of Heller's

London argues that the district court erred in

denying his motion to suppress the evidence seized pursuant

to the December 17, 1986, search of Heller's -- i.e., almost

all of M&L's business records, some of Heller's business

records, and a significant amount of cash on the premises of

Heller's that day. He characterizes as unconstitutionally

overbroad the warrant's description of items to be seized:

"books and records, ledgers, correspondence, notes, slips,

checks and any other documents, including bank records, which

reflect unlawful gambling, loansharking, narcotics

distribution, and failure to file currency transaction

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27

reports; and U.S. currency which constitutes proceeds of

these offenses." He also argues that the officials who

executed the search could not have held an objectively

reasonable belief that the overbroad language in the search

warrant was constitutional. Because we disagree with the

latter of London's two arguments, we repudiate his assignment

of errorwithout assessingthe constitutionality ofthe warrant.

It is well settled that "suppression is appropriate

only if the officers were dishonest or reckless in preparing

[the warrant] affidavit or could not have harbored an

objectively reasonable belief in the existence of probable

cause." United States v. Leon, 468 U.S. 897, 926 (1984).

Here, London has not challenged the preparation of the

warrant affidavit, identified any documents which allegedly

were seized without probable cause, or argued that the

executing agents exceeded the warrant's scope. Nor has he

asserted that there was an absence of probable cause for some

sort of warrant to have issued. Assuming arguendo that

London might still be entitled to suppression without having

made any of these arguments, our inquiry reduces to whether

the description of items to be seized was so facially

defective that an objectively reasonable officer would have

known of the warrant's unconstitutionality. We hardly think

so.

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28

Even if the description of items to be seized might

have been more particular, it was not patently overbroad when

viewed in context. London operated a complex criminal

enterprise where he mingled "innocent" documents with

apparently-innocent documents which, in fact, memorialized

illegal transactions. London also intermingled his

legitimately-obtained and innocently-obtained currency. It

therefore would have been difficult for the magistrate judge

to be more limiting in phrasing the warrant's language, and

for the executing officers to have been more discerning in

determining what to seize. In similar circumstances, we have

stated:

We must . . . recognize that the inherent
difficulty in segregating "good" from
"bad" records, and consequently in
drawing up an adequately limited warrant,
makes it difficult for even a reasonably
well-trained officer, who is not expected
to be a legal technician and is entitled
to rely on the greater sophistication of
the magistrate -- to know precisely where
to draw the line.

United States v. Diaz, 841 F.2d 1, 6 (1st Cir. 1988)

(overturning a suppression order based on an overbroad search

warrant). Like Diaz, the question whether the description of

items to be seized was unconstitutionally overbroad was, at

best, close, and the executing officers were objectively

reasonable in deferring to the magistrate judge's trained

judgment.

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29

We therefore reject London's argument that all the

evidence seized during the December 17, 1986, search of

Heller's should have been suppressed.

C. Jury Instructions Regarding London's Failure to File CTRs
C. Jury Instructions Regarding London's Failure to File CTRs

London argues that we should vacate his convictions

for failing to file CTRs because the district court

erroneously informed the jury that London could be convicted

of the "willful" violation proscribed by 31 U.S.C. 5322(b)

if he had merely a reckless disregard of his legal duties

regarding the filing of CTRs. The government takes the

position that the court's instructions were incorrect in

light of Ratzlaf v. United States, 114 S. Ct. 655 (1994)

(knowledge of the illegality of one's actions is necessary to

sustain a conviction under 31 U.S.C. 5322) (illegal

structuring case), an opinion issued after London's trial,

but points to London's failure to object and contends that

the instructions do not constitute plain error under Fed. R.

Crim. P. 52(b) (defects not brought to the attention of the

trial court reviewed for plain error). London counters that

his failure to object cannot be considered a waiver because

the instructions were in complete accord with an en banc

decision of this court -- United States v. Aversa, 984 F.2d

493 (1st Cir. 1993) (en banc) (illegal structuring case),

vacated, 114 S. Ct. 873 (1994) -- that had been handed down a

mere one month prior to the jury instructions in this case.

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30

Before addressing the issue of waiver, we must

inquire whether the present law of the circuit precludes a

determination of error even if London has not waived

objection to the instructions. In a recent decision, another

panel of this court expressed doubt as to whether Ratzlaf

overruled Aversa's alternative reckless disregard standard.

See United States v. Saccoccia, Nos. 93-1511/1560-63/1616-

17/2206-07 and 94-1388/1507-08, slip op. at 27 (1st Cir. July

24, 1995). But this comment was only dictum. It was not

necessary to the Saccoccia panel's finding that the

instruction challenged in that case was not plainly

erroneous. Id. at 26-27 (noting the defendant's failure to

object). Nor was it implicitly or explicitly relied upon

when the panel held the evidence sufficient for the jury to

have found that the defendants "knew that their own

activities were unlawful." Id. at 32-33. The reckless

disregard standard therefore played no role in the Saccoccia

court's holding. We therefore feel that the question whether

Ratzlaf has impliedly left untouched or overruled Aversa

remains to be decided--if the issue has not been waived.

Addressing the waiver issue we conclude that

London's failure to object was excusable under the

circumstances of this case. The government argues that,

despite the recency of the Aversa decision and the overall

state of the law at the time of his trial, London has waived

-31-
31

any argument that the aforementioned instructions were

erroneous. While acknowledging that waiver should not "be

inferred, and no plain error requirement imposed, where [a]

Supreme Court[] ruling comes out of the blue and could not

have been anticipated," see United States v. Weiner, 3 F.3d

17, 24 n.5 (1st Cir. 1993), the government contends that the

split between this and the other ten circuits as to the

meaning of willfulness under 31 U.S.C. 5322 "made it likely

that the issue would be resolved by the Supreme Court" and

made it incumbent upon London to lodge an objection. In so

doing, the government relies on our recent decision in United

States v. Marder, 48 F.3d 564 (1st Cir.) (illegal structuring

case), cert. denied, 115 S. Ct. 1441 (1995), where we

indicated that defendant Marder's failure to object to a

5322 willfulness instruction given prior to Ratzlaf was

inexcusable. Id. at 572 n.5. Marder is not on-point, and

the government's argument is not persuasive.

As an initial matter, Marder's trial occurred prior

to our decision in Aversa. Thus, the compelling scenario

presented here -- instructions mirroring exactly the holding

of a recent en banc opinion of the controlling circuit court

-- did not exist in that case. More importantly, however,

Marder's trial judge, without objection, erroneously

instructed the jury in accordance with the law in the other

circuits (i.e., that knowledge of the reporting requirements

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32

was all that was needed to establish willfulness under 31

U.S.C. 5322) despite (1) the existence of authority in this

circuit indicating that knowledge of illegality was necessary

to establish willfulness under 5322, see Marder, 48 F.3d at

572 n.5 (citing Bank of New England, 821 F.2d 844, 854 (1st

Cir.), cert. denied 484 U.S. 943 (1987))); and (2) our recent

withdrawal of an on-point panel opinion and decision to hear

the Aversa case en banc, see id. In view of these

circumstances, which should have put Marder on notice that

5322's willfulness criterion for illegal structuring might

imply something more than knowledge of the reporting

requirements, we deemed inexcusable Marder's failure to

object to the defective instructions. Id. We therefore

reviewed the instructions only for plain error. Id.

The situation presented in this case is in stark

contrast to that in Marder. As we have explained, the law of

this circuit was settled by nothing less than a newly-minted

en banc opinion at the time the trial judge instructed

London's jury. This fact alone goes a long way, if not the

whole way, towards excusing London's failure to object.

Moreover, at this same time, all eleven circuits had at least

implicitly indicated that a reckless disregard of legal

duties regarding the filing of CTRs was sufficient to

establish willfulness under 31 U.S.C. 5322. See Ratzlaf,

114 S. Ct. at 665 n.3 (Blackmun, J., dissenting) (pointing

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33

out the near-uniformity in the circuits that mere knowledge

of the reporting requirements is enough to establish

willfulness under 5322, and stating "[t]he only Court of

Appeals to adopt a contrary interpretation is the First

Circuit, and even that court allows reckless disregard of

one's legal duty to support a conviction for structuring")

(citation and internal quotation marks omitted).

Consequently, if we conclude that Ratzlaf implicitly held

that a reckless disregard of one's legal duties under the

reporting requirements is not enough to establish willfulness

under 5322, such a holding would be precisely the type of

unanticipated, "out of the blue" Supreme Court ruling we

alluded to in Weiner. We therefore must proceed to our

interpretation of the scope of Ratzlaf.

In Ratzlaf the trial court instructed the jury that

it could convict even if it found the defendant had no

knowledge of the anti-structuring statute but acted with the

purpose of circumventing a bank's reporting obligation. The

Court stated:

We hold that the "willfulness"
requirement mandates something more. To
establish that a defendant "willfully
violated" the antistructuring law, the
Government must prove that the defendant
acted with knowledge that his conduct was
unlawful.

114 S. Ct. at 656.

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34

In Aversa, an en banc decision, we held that

"reckless disregard" of the law satisfied the willfulness

requirements of the structuring statute. 984 F.2d at 502.

In light of Ratzlaf, Aversa remains law in this circuit only

if reckless disregard falls within Ratzlaf's concept of

"knowledge."

As we survey post-Ratzlaf law in the circuits, we

find one circuit which has adopted the standard of "actual

knowledge." United States v. Retos, 25 F.3d 1220, 1230 (3d

Cir. 1994). Other circuits -- none of whom, pre-Ratzlaf, had

required any knowledge of structuring laws -- have simply

echoed Ratzlaf's requirement of "knowledge." We are not

helped by these decisions, for we face a different problem:

having previously articulated a standard which posed what we

deemed essentially an equivalent to "knowledge," and which,

while recognized in Ratzlaf, was neither embraced nor

disavowed, shall we proclaim it now alive or dead?

In short, when should we apply the literal meaning

of a word used in a Supreme Court decision to a generic

circumstance that was not in controversy before the Court?

We begin with the general advice of Chief Justice Marshall in

Cohens v. Virginia, 6 Wheaton (19 U.S.) 264, 399-400 (1821):

It is a maxim, not to be
disregarded, that general expressions, in
every opinion, are to be taken in
connection with the case in which those
expressions are used. If they go beyond
the case, they may be respected, but

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35

ought not to control the judgment in a
subsequent suit when the very point is
presented for decision.

An application of this maxim, relevant to the

instant case, occurred in Armour & Co. v. Wantock, 323 U.S.

126, 132-34 (1944), where, notwithstanding a definition of

"work" in a prior Fair Labor Standards Act case as "physical

or mental exertion . . . controlled or required by the

employer," the Court, through Justice Jackson, held that a

company's private firefighters' idle or recreational time on

duty constituted working time. Justice Jackson explained:

[W]ords of our opinions are to be read in
the light of the facts of the case under
discussion. To keep opinions within
reasonable bounds precludes writing into
them every limitation or variation which
might be suggested by the circumstances
of cases not before the Court. General
expressions transposed to other facts are
often misleading.

Id. at 133; see also Reiter v. Sonotone Corp., 442 U.S. 330,

341 (1979) (refusal to limit "business or property," as used

in 4 of Clayton Act, to "commercial interests or

enterprises," though so defined in prior Court opinion).

These and other such cases reflect the Court's

acknowledgement that "[p]rudence also dictates awaiting a

case in which the issue was fully litigated below, so that we

will have the benefit of developed arguments on both sides

and lower court opinions squarely addressing the question."

Yee v. Escondido, 503 U.S. 519, 538 (1992). Our position

-36-
36

naturally follows: "[W]e do not normally take Supreme Court

opinions to contain holdings on matters the Court did not

discuss and which, presumably, the parties did not argue.

Sweeney v. Westvaco Co., 926 F.2d 29, 40 (1st Cir. 1991)

(Breyer, C.J.) (citing Cousins v. Secretary of the U.S. Dep't

of Transp., 880 F.2d 603, 608 (1st Cir. 1989) (en banc)).

We therefore adopt a restrained role. While we

might, if writing on a clean slate, accept the narrowest

interpretation of "knowledge," we will not easily conclude

that the Court has rejected our prior decision by ambiguous

inference or opaque implication. We would require a clear

signal.

We now look for signals. The case for "actual

knowledge" is the word itself -- expressing direct

acquaintance with a fact. This has the virtue of simplicity

in formulating instructions to a jury. We note, too, the

fact that the prosecution in our case conceded error, but

this does not relieve us of our obligation to make a de novo

decision. We do take cognizance that in Ratzlaf, the Court's

references to Aversa were on points other than the equation

of reckless disregard and knowledge-willfulness. And we also

take note of the majority's failure to respond to the

dissent's charge that the Court's decision repealed the

"reckless disregard" standard of Aversa.

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37

Looking for contrary indications, we note first,

that the referent used most often by the Court was

"knowledge." "Actual knowledge" was used by the majority

only once, in a parenthetical reference to a 1980 Fifth

Circuit case. 114 S. Ct. at 660 (citing United States v.

Warren, 612 F.2d 887 (5th Cir. 1980)). On the other hand,

Ratzlaf cites to a number of other cases requiring less than

actual knowledge. See, e.g., id. (citing cases demonstrating

the use of reasonable inferences to find knowledge).

Moreover, we find a generally favorable reference

to Aversa as the only case opposed to a no-knowledge

requirement -- and, while a footnote quoted our "reckless

disregard" standard along with "knowledge," there was no

adverse comment or caveat. See id. We do not ascribe to the

majority's failure to take up the gauntlet on the dissent's

thrust on Aversa as deliberate decision making.

But beyond comments in the Court's opinion, we are

mindful of the wider scope given definitions of "knowledge"

in cases and statutes. For example, the cases applying 18

U.S.C. 656 (bank officer who "willfully misapplies" bank

funds) have generally held reckless disregard to establish

the requisite intent to defraud.1 These holdings come close

1. We have so held in United States v. Cyr, 712 F.2d 729,

732 (1st Cir. 1983), and in United States v. Fusaro, 708 F.2d

17, 21 (1st Cir. 1983). Other circuits equate intent to
injure the bank with reckless disregard of the bank's
interest. See, e.g., United States v. Hoffman, 918 F.2d 44,

-38-
38

to equating, if not precisely doing so, knowledge and

reckless disregard. We can make the same comment about the

Supreme Court precedents equating the two concepts in various

federal statutes. See McLaughlin v. Richland Shoe Co., 486

U.S. 128, 133 (1988) ("willfulness" under Fair Labor

Standards Act means defendant "either knew or showed reckless

disregard for the matter of whether its conduct was

prohibited by the statute"); Transworld Airlines v. Thurston,

469 U.S. 111, 126 (1985) ("willfulness" under Age

Discrimination in Employment Act; same definition applied);

United States v. Murdock, 290 U.S. 389, 395 (1933)

("willfulness" under the Revenue Acts of 1926 and 1928, which

prohibited a "willful" failure to pay a particular tax,

included "careless disregard [for] whether or not one has a

right so to act.")

In the context of the False Statements Act, 18

U.S.C. 1001, a false statement is made knowingly if

defendant demonstrated a reckless disregard of the truth,

with a conscious purpose to avoid learning the truth. United

States v. White, 765 F.2d 1469, 1482 (11th Cir. 1985); United

States v. Evans, 559 F.2d 244, 246 (5th Cir. 1977). A

statutory equating of knowledge and reckless disregard is

found in the definitions contained in the False Claims Act,

46 (6th Cir. 1990); United States v. Hansen, 701 F.2d 1215,

1218 (7th Cir. 1983); United States v. Thomas, 610 F.2d 1166,

1174 (3d Cir. 1979).

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39

31 U.S.C. 3729, which prohibits "knowingly" presenting a

false or fraudulent claim to the United States Government.

The definitions of "knowing" and "knowingly" apply to a

person who, with respect to information, "acts in reckless

disregard of the truth or falsity of the information, and no

proof of specific intent to defraud is required." 31 U.S.C.

3729(b)(3).

There are also state cases involving fraud actions

where knowledge of falsity is equated with "utter disregard

and recklessness." Singh v. Singh, 611 N.E.2d 347, 350 (Ohio

App. 1992); see also James v. Goldberg, 261 A.2d 753, 758

(Md. 1970)("reckless indifference" can impute knowledge).

Beyond these instances of the elastic boundaries of

"knowledge," we are sensible of the practical problems of

drawing too fine a line. We have accepted the fact that a

jury "could infer knowledge if a defendant consciously

avoided learning about the reporting requirements." United

States v. Bank of New England, N.A., 821 F.2d 844, 855 (1st

Cir. 1987) also cited with approval in Ratzlaf, 114 S.Ct. at

663 n.19. But reckless disregard also, as the instructions

in this case stated, "involves the conscious disregard of a

substantial risk." To this the court below added that the

jury "may consider the frequency with which the defendant was

involved in transactions which might be reportable . . . ."

When we carefully scrutinize these instructions and note that

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40

not merely the concept of recklessness is involved, but

reckless disregard, we must acknowledge that the instructions

require some kind of an awareness of law which is not

casually or negligently but recklessly disregarded.

So, while we sympathize with those who would

interpret Ratzlaf as requiring actual knowledge, we do not

see such a clear signal as would cause us to pronounce the

demise of Aversa. We hold that the district court's

instruction was a correct application of Aversa, and not

error under Ratzlaf.

We, therefore, affirm London's convictions for failing to

file CTRs.

D. Sufficiency of the Evidence as to the Money Laundering
D. Sufficiency of the Evidence as to the Money Laundering

and
and

RICO Counts
RICO Counts

London asserts that there was insufficient evidence

to support his money laundering and RICO convictions. His

sufficiency arguments are threefold: (1) there was

insufficient evidence that he laundered money with the intent

to promote illegal gambling; (2) there was insufficient

evidence that the enterprise alleged in the indictment was

cognizable under RICO; and (3) there was insufficient

evidence of a nexus between the RICO enterprise and the

racketeering acts involving extortion and the collection of

illegal debts. Our review of the record persuades us that a

rational jury drawing reasonable inferences could have made

-41-
41

the challenged findings beyond a reasonable doubt. See,

e.g., United States v. Tuesta-Toro, 29 F.3d 771, 776 (1st

Cir. 1994) (setting forth standard of review for sufficiency

challenges), cert. denied, 115 S. Ct. 947 (1995).

1. Money Laundering
1. Money Laundering

The money laundering statute under which London was

convicted subjects to criminal sanctions "[w]ho[m]ever,

knowing that the property involved in a financial transaction

represents the proceeds of some form of unlawful activity,

conducts or attempts to conduct such a financial transaction

which in fact involves the proceeds of specified unlawful

activity . . . with the intent to promote the carrying on of

[the] specified unlawful activity." 18 U.S.C. 1956(a)

(1)(A)(i) (emphasis added). Seizing upon the highlighted

language, London contends that there was insufficient

evidence that he conducted his check-cashing business with an

intent to promote the unspecified unlawful activity at issue

-- i.e., illegal gambling. We disagree.

There was overwhelming evidence that London failed

to file CTRs prior to the December 17, 1986, execution of the

search warrant at Heller's, and that London was aware of the

reporting requirements during the period in which he failed

to file CTRs. There also was evidence that London's

unorthodox operating procedures benefitted his bookmaker

customers. Finally, there was evidence that London made

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42

money with every check he cashed. Thus, there was evidence

that London knowingly operated his business in an unorthodox

manner that benefitted both his bookmaker customers and

(derivatively) himself. In our view, this evidence of mutual

interest is more than sufficient to sustain an inference that

London operated his check-cashing business with the intent to

promote the illegal gambling businesses operated by certain

of his customers.

We therefore reject London's argument that there

was insufficient evidence to support his money laundering

convictions.

2. The Enterprise
2. The Enterprise

The RICO statute prohibits one "employed by or

associated with" a statutorily-defined "enterprise" from

conducting the enterprise's affairs "through a pattern of

racketeering activity or collection of unlawful debt." 18

U.S.C. 1962(c). The enterprise alleged in the indictment

was an association between London's Cafe, Inc., d/b/a/

Heller's -- a corporation -- and M & L -- a sole

proprietorship. London questions whether there was

sufficient evidence to sustain a finding that the alleged

enterprise was cognizable under RICO, arguing that (1) a RICO

enterprise cannot be an association of legal entities; (2)

the enterprise did not have a "common or shared purpose which

animates those associated with it" and did not "function as a

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43

continuing unit" with an "ascertainable structure distinct

from that inherent in the conduct of a pattern of

racketeering activity," see United States v. Bledsoe, 674

F.2d 647, 665 (8th Cir.) (internal quotation marks omitted),

cert. denied, 459 U.S. 1040 (1982); and (3) the enterprise

was not distinct from London himself. We do not find these

arguments convincing.

London's first argument is legal. The RICO statute

states that the term "`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." 18 U.S.C. 1961(4). London

contends that, under a plain reading of this provision, an

association-in-fact RICO enterprise such as the one alleged

here must be an association of individuals, and cannot

include legal entities.

London's argument has been addressed to a number of

circuit courts, and each has rejected it. See, e.g., United

States v. Console, 13 F.3d 641, 652 (3d Cir. 1993), cert.

denied, 114 S. Ct. 1660 (1994); United States v. Blinder, 10

F.3d 1468, 1473 (9th Cir. 1993); Atlas Pile Driving Co. v.

DiCon Fin. Co., 886 F.2d 986, 995 n.7 (8th Cir. 1989); United

States v. Perholtz, 842 F.2d 343, 352-53 (D.C. Cir.), cert.

denied, 488 U.S. 821 (1988). And we recently indicated,

without explicitly considering the issue, that an association

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44

between two legal entities and two individuals can constitute

a RICO enterprise. See Libertad v. Welch, 53 F.3d 428, 444

(1st Cir. 1995). Today we make explicit what we implied in

Libertad: two or more legal entities can form or be part of

an association-in-fact RICO enterprise. We think the

Perholtz panel explained why rather well:

[RICO] defines "enterprise" as including

the various entities specified; the list
of entities is not meant to be
exhaustive. "There is no restriction
upon the associations embraced by the
definition . . . ." United States v.

Turkette, 452 U.S. 576, 580 (1981). On

the contrary, Congress has instructed us
to construe RICO "liberally . . . to
effectuate its remedial purposes." Pub.
L. 91-452, 904(a), 84 Stat. 922, 947
(1970) (reprinted in note following 18

U.S.C. 1961), quoted in Turkette, 452

U.S. at 587; accord Sedima, S.P.R.L. v.

Imrex Co., 473 U.S. 479, 497-98 (1985).

[The] restrictive interpretation of the
definition of enterprise would contravene
this principle of statutory construction.
[The restrictive] reading of section
1961(4) [also] would lead to the bizarre
result that only criminals who failed to
form corporate shells to aid their
illicit schemes could be reached by RICO.
The interpretation hardly accords with
Congress' remedial purposes: to design
RICO as a weapon against the
sophisticated racketeer as well as (and
perhaps more than) the artless.

842 F.2d at 343.

We therefore reject London's argument that an

association-in-fact RICO enterprise cannot be comprised of

legal entities.

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45

London's second argument presumes that this circuit

has adopted the test established in Bledsoe, 674 F.2d at 665,

and set forth above. See supra at 40-41. We have not and do

not do so today, because even if we assume arguendo the

test's applicability, there was ample evidence for the jury

to have found that its requirements were met.

The jury could have found that there was a common

or shared purpose animating both the enterprise and London:

doing commerce with (and thereby profiting from) bookmakers

engaged in illegal gambling. The evidence that London as an

individual pursued such a scheme is overwhelming and does not

need repeating. Moreover, M & L and Heller's were the

principal means by which London effectuated his plan. The

jury reasonably found that London used M & L to launder (for

a profit) the proceeds of illegal gambling for his bookmaker

customers, and could have found that he used the privacy

afforded by Heller's to shield M & L from close scrutiny, to

arrange meetings between Ferrara and his bookmaker customers,

and to collect "rent" for Ferrara.

The jury also could have found that the enterprise

functioned as a continuing unit and had an ascertainable

structure distinct from that inherent in the conduct of a

pattern of racketeering activity. As to the latter of these

two requirements, M & L and Heller's were legitimate entities

that did a significant amount of business completely separate

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from the pattern of racketeering activity at issue in this

case. Heller's was a bar where drinks and food were sold.

M & L was a check-cashing business -- located inside of

Heller's and operated by the same individual who ran Heller's

-- that cashed checks for customers willing to pay it a

commission. As to the former requirement, the jury could

reasonably have surmised that M & L and Heller's operated as

a symbiotic unit (M & L providing a ready source of cash for

Heller's customers; Heller's customers taking advantage of

M & L's convenience), and that they existed for a common

purpose: the economic gain of London.

We therefore reject London's argument that the

Bledsoe standard has not been met in this case.

London's third argument derives from the fact that

"[w]e have consistently interpreted [RICO's] requirement that

a culpable person be `employed by or associated with' the

RICO enterprise as meaning that the same entity cannot do

double duty as both the RICO defendant and the RICO

enterprise." Miranda v. Ponce Fed. Bank, 948 F.2d 41, 44

(1st Cir. 1991) (quoting 18 U.S.C. 1962(c)). He contends

that he, the defendant named in the indictment, is legally

indistinguishable from M & L and Heller's.

His argument overlooks the fact that M & L, though

a sole proprietorship, had at least one employee other than

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himself, and the fact that Heller's was incorporated and had

several employees other than himself. No more is required to

establish the separateness required by RICO. As Judge Posner

explained in responding to a similar argument:

If the one-man band incorporates, it gets
some legal protections from the corporate
form, such as limited liability; and it
is just this sort of legal shield for
illegal activity that RICO tries to
pierce. A one-man band that does not
incorporate, that merely operates as a
proprietorship, gains no legal
protections from the form in which it has
chosen to do business; the man and the
proprietorship really are the same entity
in law and fact. But if the man has
employees or associates, the enterprise
is distinct from him, and it then makes
no difference, so far as we can see, what
legal form the enterprise takes. The
only important thing is that it be either
formally (as when there is incorporation)
or practically (as when there are people
besides the proprietor working in the
organization) separable from the
individual.

McCullough v. Suter, 757 F.2d 142, 144 (7th Cir. 1985).

We therefore reject London's argument that he and

the RICO enterprise alleged in the indictment are legally

indistinguishable.

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3. Nexus between Enterprise and Racketeering Acts
3. Nexus between Enterprise and Racketeering Acts

Involving Extortion and the Collection of Illegal
Involving Extortion and the Collection of Illegal

Debt
Debt

London's final argument is that there was no nexus

between the enterprise and the racketeering acts involving

extortion and the collection of illegal debt, and that we

therefore must set his RICO convictions aside. We need not

and do not reach this argument. As we have pointed out,

London's RICO convictions are sustainable so long as we can

tell with certainty that the jury found that he committed two

sufficient predicate acts. See supra at 39 (quoting Angiulo,

897 F.2d at 1198). Here, the jury sustainably found that

London committed numerous predicate acts of money laundering.

Thus, even if there were no nexus between the enterprise and

the racketeering acts involving extortion and the collection

of illegal debt (an issue on which we express no opinion), we

would sustain London's RICO convictions.

III.
III.

For the reasons stated, the judgment of the

district court is affirmed.
affirmed

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