State v. Trong Kim Huynh

GARDEBRING, Justice

(dissenting).

We are asked in this case to decide what constitutes an “enterprise” under Minnesota’s Racketeer Influenced and Corrupt Organizations Act (RICO), Minn.Stat. § 609.903, subd. 1(1) (1992). Although the issue is one of first impression for this court, many federal courts have considered it in the context of the federal RICO law. I agree with the majority opinion that we should look to federal courts’ interpretations of the federal RICO law in interpreting our state RICO statute. In spite of the existence of the well-reasoned federal cases discussed in the majority opinion, however, the majority adopts its own test for the existence of an “enterprise” which departs substantially from any test applied in the federal courts. This departure allows the majority to uphold the RICO conviction in this matter in the face of an utter absence of evidence establishing anything beyond multiple acts of extortion. This change is particularly troublesome because, without a stringent test, the statute becomes merely a sentence enhancement mechanism available at the whim of the prosecutor. I would adopt the test developed by the Eighth Circuit Court of Appeals and subsequently adopted by other federal appeals courts; because the evidence in this case is insufficient to support a RICO conviction under that test, I respectfully dissent.

As the majority points out, the United States Supreme Court has ruled that the state must prove both the existence of an “enterprise” and a pattern of criminal activity to sustain a RICO conviction. United States v. Turkette, 452 U.S. 576, 101 S.Ct. 2524, 69 L.Ed.2d 246 (1981). The Supreme Court stated:

The enterprise is an entity, for present purposes a group of persons associated together for a common purpose of engaging in a course of conduct. * * * [I]t is proved by evidence of an ongoing organization, formal or informal, and by evidence that the various associates function as a continuing unit. * * * The “enterprise” is not the “pattern of racketeering activity”; it is an entity separate and apart from the pattern of activity in which it engages.

*199Id. at 583, 101 S.Ct. at 2528-29 (emphasis added)-. As the majority notes, the Eighth Circuit Court of Appeals has set out a three-part test for the existence of an “enterprise” under the federal RICO statute. Under that test, three characteristics distinguish a RICO enterprise:

First, there must be a common or shared purpose that animates the individuals associated with it. Second, it must be an “ongoing organization” whose members “function as a continuing unit,” [citing Turk-ette ]; in other words, there must be some continuity of structure and personnel. Third, there must be an ascertainable structure distinct from that inherent in the conduct of a pattern of racketeering activity.

U.S. v. Kragness, 830 F.2d 842, 855 (8th Cir.1987). While the second and third parts of the test are related, the court identified its rationale for requiring proof of all three characteristics. One is to avoid the danger of “guilt by association” that may arise because RICO does not require proof of an agreement among the members of the “enterprise” as would be required in a conspiracy case. Id. Another reason is to ensure that RICO’s targets, criminal enterprises, “are distinguished from individuals who associate for the commission of sporadic crime.” Id.

The majority adopts the first prong of the Kragness test which requires a common purpose among the individuals associated with the enterprise. The second prong of the Kragness test is whether there is “an ‘ongoing organization’ whose members ‘function as a continuing unit’, * * * [with] some continuity of structure and of personnel.” Id. at 855. It appears that, despite some changes in wording, the majority has adopted the Kragness second prong; the majority later describes the requirement as “some continuity of structure and personnel.” The Kragness court further defined these terms as follows:

Continuity of structure exists where there is an organizational pattern or system of authority that provides a mechanism for directing the group’s affairs on a continuing, rather than an ad hoc, basis. The continuity-of-personnel element involves a closely related inquiry, in which “[t]he determinative factor is whether the associational ties of those charged with a RICO violation amount to an organizational pattern or" system of authority.”

Id. at 856 (citations omitted). I understand the second prong as a temporal element, requiring proof of relationships and structure existing over time for the commission of the predicate criminal acts as well as others. Assuming that the court intends to adopt such a definition, I agree with its formulation of the second prong.

The third prong of the majority’s test, however, inexplicably departs from the Kragness test. Instead of requiring “an ascertainable structure distinct from that inherent in the conduct of a pattern of racketeering activity,” the majority would require the state to prove that “the activities of the organization extend beyond the commission of the underlying criminal acts either to coordinate the underlying criminal acts into a pattern of criminal activity or to engage in other activities.” Such a test focuses on “activities” to prove the existence of an enterprise, rather, than requiring proof of what is an essential element of. an “enterprise,” a continuing organization with structured relationships.1 Allowing the state to prove the *200existence of an enterprise through proof of its “activities” contradicts the Supreme Court’s directive that the enterprise is “an entity separate and apart from the activity in which it engages.” Turkette, 452 U.S. at 583, 101 S.Ct. at 2529.

The inherent flaws of this new test are illustrated by its application to the instant case. Because the test collapses the requirements for a “pattern of criminal activity” and an “enterprise,” the majority concludes that the state has established beyond a reasonable doubt the existence of an “enterprise” based upon the very minimal facts proven in this case. The appellant conceded that the first prong of the Kragness test, a common purpose among the defendant and his associates, was met in his case. The second prong requires proof of continuity of structure or personnel. The court finds the continuity requirement met in this case because the appellant, accompanied by others, collected the funds from the restauranteur over a period of 6 months, collected payments on a regular basis and instructed the restauranteur as to how they should be made, reduced the monthly amount upon request after leaving the restaurant for a brief period, sent a substitute to pick up the last payment, and received unexplained payments each month. These facts prove nothing more than that appellant successfully extorted money from the restauranteur over time. There was no evidence that there was any continuity among individuals accompanying appellant on different visits or that the same individuals negotiated the checks or money orders. No proof was introduced to establish continuity of structure or personnel beyond appellant himself, and no organizational pattern or system of authority was proved.

Had the court asked what “ascertainable structure” the state had proven, the answer would have been very difficult to find. Even the majority acknowledges that this is a case “where it [was] difficult to get evidence of the organizational framework of the criminal enterprise,” supra at 197. In fact, there was none. There was no evidence introduced showing any relationship or contact between appellant and the person in Texas who signed some of the payments. The person in Texas was identified only by showing a driver’s license with his name on it. There was no testimony regarding involvement in the “enterprise” of the “associates” who accompanied appellant on one visit to demand money of the restauranteur and who waited in the car on other occasions. None of these “associates” was ever identified or charged with any crime. The only “associate” produced at trial was the man who picked up the last payment and was arrested, Son Thanh Tran. Tran did not testify at trial regarding how he became involved in the extortion, but a police officer’s testimony that Tran told police that appellant called him from California and asked him to pick up the check was admitted as impeachment evidence. There was testimony from appellant’s ex-girlfriend that appellant received $700 per month from an unknown source while he was unemployed. There was, however, no evidence introduced to link that payment in any way to any of the “associates,” or to any criminal enterprise.

The court relies heavily on the restauranteur’s testimony that the person who called him by telephone and demanded the payments said he was a member of an Asian gang and that “they” would kill him and his family if he did not make the payment. With this statement in evidence, the court today decides that the jury could infer that the $700 payment was for “services rendered ‘the gang’ that the man who was arrested for picking up the last check did not implicate appellant in his trial testimony because “the organization had means of enforcing discipline”; and that appellant left the restaurant briefly before accepting a reduction in the payment because “fixing the amount of the extortion payments required conferring with associates.” These inferences are allowed to sustain the conviction in spite of the fact that no evidence whatsoever was introduced tending to prove the actual existence of a gang, the gang’s structure or membership, or the gang’s ability to enforce discipline. Nor was there any evidence that appellant conferred with anyone when he allowed the reduced payment, or that he received any payment *201from anyone associated with the “gang.” As another court faced with inferences based on gang membership observed, “[m]embership in an organization does not lead reasonably to any inference as to the conduct of a member on a given occasion.” In re Wing Y., 67 Cal.App.3d 69, 136 Cal.Rptr. 390, 395 (1977).

That such “inferences” in the absence of evidence can be used to justify a conviction of a crime as serious as a violation of the RICO statute demonstrates the inadequacy of the court’s proposed test for the existence of an enterprise. As the majority points out, the penalty imposed by the RICO statute is a harsh one; conviction may result in up to 20 years in prison and a fine of up to $1 million, injunctive relief, civil forfeiture and restitution. I agree with the majority that this statute was meant only to apply to organized crime, but I would apply the Kragness test without the court’s modifications. Applying that test, I find insufficient evidence of an enterprise in this case because no evidence was introduced that would support a finding of an ascertainable structure apart from that necessary to commit the predicate acts of coercion.

Further, even under the weaker version of the test for the existence of an “enterprise” adopted by the majority, I disagree that the evidence in this case is sufficient to support appellant’s conviction on the RICO charge. Under the majority’s third prong, the state may show that the organization’s activities extended beyond the commission of the underlying acts, either to coordinate the underlying acts into a pattern of criminal activity or to extend them into other avenues of illegal activity. The court finds its test satisfied in this case because the organization’s activities extended into money laundering which was not necessary to the underlying criminal acts of coercion. I do not believe that appellant’s actions to convert the money he extorted from paper instruments to cash were activities which extended beyond the commission of the underlying criminal acts of extortion. The existence of “money laundering” does not provide the proof of a separate entity required by Turkette; appellant had to negotiate the checks and money orders in some fashion to have access to the fruits of Nor was any evidence introduced that an organization coordinated appellant’s acts of extortion. his crime.

When the state proves the violation of a criminal statute beyond a reasonable doubt, the perpetrator should be held accountable and sanctioned, with a tough sentence when appropriate. Appellant in this case was properly convicted and sentenced for multiple counts of coercion. The state did not, however, introduce sufficient evidence of an “enterprise” to support a conviction under Minnesota’s RICO statute. There may have been an Asian gang supporting or directing appellant’s acts of extortion, but the state did not prove this element beyond a reasonable doubt. I cannot condone an interpretation of the RICO statute which invites the state to add the very serious charge of a RICO violation every time two or more defendants are charged with committing three or more criminal acts. I am even less prepared to support the majority’s interpretation of the statute in this case where the minimal evidence that appellant was a member of a gang was found to support detailed “inferences” regarding facts not in evidence. The court’s decision today demonstrates the validity of the Eighth Circuit’s fear- that unless evidence is introduced satisfying all three elements of its test, courts will be unable to ensure that RICO’s targets, criminal enterprises, are distinguished from individuals who associate for the commission of sporadic crime.

. A similar problem with the majority's third prong is that it overlaps with the separate statutory requirement that the state prove a “pattern of criminal activity” to obtain a RICO conviction. As the majority points out, the Minnesota RICO statute lays out specific elements necessary to prove a "pattern of criminal activity.” One of those elements is that the incidents were committed, solicited, aided by, etc., persons associated with or in an enterprise involved in the crime. Minn.Stat. § 609.902, subd. 6(3) (1992) (emphasis added). Using "coordina[tion of] the underlying criminal acts into a pattern of criminal activity” to prove enterprise, as the majority does, supra at 10, employs circular reasoning to collapse the two separate elements of enterprise and pattern into one element. This collapse of the two statutory requirements into one also contradicts the Supreme Court's observation in Turkette that “[t]he enterprise is an entity, * * * a group of persons associated together for the common purpose of engaging in a course of conduct. The pattern of racketeering activity is, on the other hand, a series of criminal acts as defined by the statute.” Turkette, 453 U.S. at 583, 101 S.Ct. at *2002528. As the Court noted, "proof of one does not necessarily establish the other.” Id.