Wednesday, April 20, 2011

Dismissal of RICO Indictment Reversed - Enterprise and Pattern of Activity Sufficiently Alleged

In United States v. Bergrin, 2011 WL 1366388 (Apr. 12, 2011), the Government appealed dismissal of RICO indictment which district court held did not adequately allege a racketeering “enterprise” or a “pattern of racketeering activity.” Following a thorough review of RICO definitions, the Circuit disagreed and held the indictment sufficient, finding that the district court principally erred in assessing the government’s ability to prove the allegations rather than assuming all alleged facts as true as required at the motion to dismiss stage.

Bergrin, defense attorney and former federal prosecutor, was charged with heading a criminal enterprise from 2003 through 2009 involving numerous offenses and co-defendants connected through an “association-in-fact” enterprise called the Bergrin Law Enterprise (BLE) which included four corporations —the law firm Pope, Bergrin & Verdesco, PA (PB & V); the Law Office of Paul W. Bergrin, PC; Premium Realty Investment Corp., Inc.; and Isabella's International Restaurant, Inc.

The indictment alleged that Bergrin was the leader of the BLE and played an instrumental role in six criminal schemes, with co-defendants' each having significant involvement in at least one scheme and little or no involvement in others. The six schemes, listed as “racketeering acts,” included: arranging for the murders of government witness on behalf of clients, bribing a government witness, trafficking in kilogram quantities of cocaine, running a prostitution scheme, and fraudulent real estate transfers.

The indictment also alleged purposes of the Enterprise, including: providing the BLE with an expanding base of clients for legal and illegal services; generating, preserving and protecting the BLE’s profits and client base through those alleged acts; protecting Bergrin’s status as a licensed attorney; enhancing his reputation as a criminal defense attorney; promoting the BLE’s activities; enriching members; and concealing the criminal activities of the BLE and its members and associates from detection and prosecution.

Bergrin and his co-defendants moved to dismiss the RICO and racketeering-based counts. The district court granted the motions, finding that the indictment did not adequately allege a racketeering “enterprise” or a “pattern of racketeering activity.”

The Circuit reversed, first reviewing the definitions of “enterprise,” “employed or associated with,” “pattern of racketeering activity,” and “racketeering activity,” and the broad reach of the statute. Pointing out the narrow analysis permitted by a motion to dismiss – whether the allegations, assumed to be true, suffice to charge an offense – the court found sufficient allegations to establish both a pattern of racketeering activity and an enterprise, including purpose, relationships and longevity. In granting the motion to dismiss, the district court erred in finding that the indictment failed to allege a common purpose among the predicate acts by weighing whether the government could prove the allegations. Also, there is no requirement that the predicate acts be similar in order to establish a “pattern,”or that an enterprise have structure, defined leadership or organization.

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