What can RICO not do? RICO and the non-economic intrastate enterprise that perpetrates only non-economic racketeering activity.

• Author: Nisbet, Brian

1. INTRODUCTION

   Jackson Nascimento belonged to a local street gang that claimed territory on the south side of Boston, Massachusetts. (1) The gang operated exclusively in that area and did not actively participate in economic activity. (2) For several years, Nascimento's gang waged a murderous war against a similarly local street gang. (3) In 2005, Jackson Nascimento was convicted of racketeering and racketeering conspiracy in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO). (4) He was sentenced to 171 months in federal prison. (5) In support of the racketeering conviction, the jury found that Nascimento shot and killed one member of the rival street gang and conspired to kill many others. (6) These crimes were violent but non-economic in nature.

   RICO is one of the federal government's most sweeping criminal laws. (7) It is aimed at the commercial effects of enterprise criminality, (8) but can be used to prosecute non-economic racketeering activity perpetrated by individuals, like Nascimento, who are associated with non-economic intrastate enterprises. (9)

   The Supreme Court of the United States addressed the scope of Congress's power under the Commerce Clause to regulate non-economic intrastate criminal activity in United States v. Lopez, (10) United States v. Morrison, (11) and Gonzales v. Raich. (12) Lopez and Morrison stand for the principle that Congress cannot regulate local, non-economic, violent criminal activity unless it has substantial effects on interstate commerce. (13) In Raich, the Court held that Congress may regulate non-economic intrastate activity as an essential part of a larger and valid regulatory scheme so long as there is a rational basis for so doing. (14) The impact of these decisions on federal criminal law is hotly debated, (15) but commentators generally agree that prosecutions under major criminal statutes, like RICO, have not slowed. (16)

   The Supreme Court's recent Commerce Clause jurisprudence, however, has had some effect on RICO's enforcement. Two federal circuit courts recently split over whether RICO's jurisdictional element requires the Government to prove substantial effects on interstate commerce where the defendant, associated with a non-economic intrastate enterprise, commits only non-economic "racketeering activity." In Waucaush v. United States', the Sixth Circuit held that RICO's jurisdictional element required the Government to demonstrate substantial effects on interstate commerce to prosecute an individual, associated with a non-economic intrastate enterprise, accused of only non-economic racketeering activity. (17) In United States v. Nascimento, the First Circuit diverged from that opinion and held that RICO's jurisdictional element required proof of only a de minimis effect on interstate commerce. (18) In the same case, the First Circuit analyzed RICO under the principles set forth in Raich--an analysis that may subjugate the role of RICO's jurisdictional element altogether. (19)

   This Comment will discuss these two important and related issues. Part II of this Comment will provide an overview of RICO's original design and subsequent application. Part III addresses RICO's jurisdictional element and whether it requires that non-economic racketeering activity perpetrated by individuals associated with non-economic intrastate enterprises substantially affect interstate commerce or only affect interstate commerce. Part III is divided into several sections. Section 1 describes [section] 1962(c) of RICO, its text, important terms, liberal construction, and potential reach. (20) Section 2 examines Lopez and Morrison to elucidate the scope of Congress's commerce power. Section 3 examines the Sixth and First Circuits' split in Waucaush and Nascimento, respectively. Section 4 explores what evidentiary standard the federal courts should require. Though this Comment recognizes that requiring substantial effects on interstate commerce would be a jurisprudential sea change, it ultimately concludes that the affecting commerce standard should mean more than a speculative or incidental effect on interstate commerce. Non-economic racketeering activity perpetrated by individuals associated with non-economic intrastate enterprises should fall outside RICO. Part IV examines what impact the Supreme Court's holding in Raich will have on RICO's jurisdictional element. Part IV is also divided into several sections. Section 1 examines the Supreme Court's holding in Raich. Section 2 discusses the implications of applying Raich's holding to [section] 1962(c) of RICO. Section 3 concludes that the First Circuit erred in its holding, and argues that because non-economic racketeering activity perpetrated by an individual associated with a non-economic intrastate enterprise is separate and distinct from the class of activity regulated by RICO, there is no rational basis for incorporating it into RICO's larger regulatory scheme.

2. BACKGROUND

   The Racketeer Influenced and Corrupt Organizations Act, known generally as RICO, is Title IX of the Organized Crime Control Act. (21) Generated amidst public fear over the perceived strength of organized crime, (22) RICO's stated purpose is to "seek the eradication of organized crime ... by strengthening the legal tools in the evidence-gathering process, by establishing new penal prohibitions, and by providing enhanced sanctions and new remedies to deal with the unlawful activities of those engaged in organized crime." (23) As drafted, however, RICO's broad statutory language reaches all types of "enterprise criminality." (24) Enterprise criminality encompasses a wide range of criminal activity and has been defined as "'patterns' of violence, the provision of illegal goods and services, corruption in the labor or management relations, corruption in government, and criminal fraud by, through, or against various types of licit or illicit 'enterprises.'" (25)

   In furtherance of its broad language, RICO commands that it be liberally construed to effectuate its remedial purposes. (26) Since 1970, RICO has been used to prosecute many crimes beyond classic organized crime, including political corruption and other white collar crimes. (27)

3. RICO'S JURISDICTIONAL ELEMENT

   1. SECTION 1962(C) OF RICO

      Section 1962(c) of RICO states:

      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. (28) To successfully prosecute a RICO charge, the Government must prove beyond a reasonable doubt that: "'(1) an enterprise existed; (2) the enterprise participated in or its activities affected interstate commerce; (3) the defendant was employed by or was associated with the enterprise; (4) the defendant conducted or participated in the conduct of the enterprise; (5) through a pattern of racketeering activity.'"(29)

      Like the rest of RICO, [section] 1962(c) contains broad terms. (30) Enterprise and racketeering activity, defined in [section] 1961(1) and (4) of RICO, are generous in scope. (31) "[A]ny individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity" can constitute a RICO enterprise. (32) Federal courts have a significant amount of discretion in recognizing a RICO enterprise. (33) There is no rigid standard that must be satisfied. (34) Minimally, a RICO enterprise must be an ongoing organization, formal or informal, whose associates operate as a continuous unit. (35) A RICO enterprise can be a legitimate or illegitimate organization, (36) and need not be economically motivated. (37) The Government can establish a RICO enterprise by providing evidence of some decision-making structure or cohesion within a group. (38) RICO has been used to prosecute defendants associated with a variety of different enterprises. (39) Courts have found marriages, schools, labor unions, and even county prosecutors' offices to be RICO enterprises. (40)

      The definition of "racketeering activity" is almost as broad. Racketeering activity is a sweeping term that is defined by over sixty different crimes, (41) including nine state crimes and fifty-two federal crimes. (42) The nine state crimes are any act or threat of murder, kidnapping, gambling, arson, robbery, bribery, extortion, dealing in narcotics, or dealing in an obscene matter. (43) Some of the fifty-two federal crimes involve embezzlement from pension and welfare funds, wire fraud, the trafficking in persons, and "white slave" traffic. (44) For the Government to successfully prosecute a substantive RICO charge under [section] 1962(c), the trier of fact must conclude that the defendant is guilty of "a pattern of racketeering activity." (45) In other words, the trier of fact must conclude that the defendant committed at least two crimes that define racketeering activity. (46)

      Racketeering activity is a unique crime. Though related, it is separate and distinct from its many predicate acts. (47) The predicate acts are referred to in RICO for definitional purposes only. (48) RICO does not criminalize the predicate acts per se, (49) but rather, the impact they have on interstate commerce in furtherance of enterprise criminality. (50) Because the crimes are different, a charge of racketeering activity will survive even if the defendant was previously acquitted of the predicate acts. (51) If a defendant is convicted under [section] 1962(c), RICO calls for a prison sentence of up to twenty years, or, if authorized by the predicate act, a term sentence of life in prison. (52)

   2. RECENT COMMERCE CLAUSE JURISPRUDENCE

      The Supreme Court recently addressed the scope of Congress's commerce power in three landmark decisions. Because Congress enacted RICO...