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Tuesday, February 26, 2019

A RICO Primer

A RICO Primer
Many readers, including defense attorneys, continue to seem confused by RICO. The usual response to a RICO charge is, “How can they do this?” The following passages, from the book Out Bad, might help clear up some confusion.
From Out Bad
RICO was the centerpiece of the Organized Crime Control Act of 1970. The law was written by a Senatorial aide named G. Robert Blakey, who is now the William and Dorothy O’Neill Professor of Law at Notre Dame. And, it is named for the fictional character Rico “Little Caesar” Bandello who was inhabited on film by Edward G. Robinson.
Robinson’s Rico character, in turn, was a parody of a notorious entrepreneur named Alphonse Gabriel “Scarface” Capone. “Every time a boy falls off a tricycle,” Capone once lamented, “every time a black cat has gray kittens, every time someone stubs a toe, every time there’s a murder or a fire or the Marines land in Nicaragua, the police and the newspapers holler ‘get Capone.’”
Capone regretted his reputation as a criminal. Starting in 1926 he tried to diversify into legitimate businesses. Eventually he discovered milk. “Honest to God, we’ve been in the wrong racket right along,” Capone exclaimed when he discovered that the profit margins were higher in milk than in whiskey. In February 1932, three months before he went to prison, Capone invested $50,000 in a legitimate business named Meadowmoor Dairies. In the 1960s the descendants of Capone liked to invest in bowling alleys because they were a good way to explain where the money came from. The upshot of that was that the main supplier of automatic pin setting machines, the AMF company, became prosperous enough to buy, and almost ruin, the Harley-Davidson company.
The original intent of the RICO statute – at least by the Congressmen who voted for it – was to protect legitimate dairies, bowling alleys and other businesses, from investment by thugs like Al Capone. That did not work because the threat posed to the nation by the Italian-American Mafia was always overblown and because as years went by the very same acts the Mafia had always been condemned for doing began to be accepted as standard business practice. The Mafia used to sell sin. The gangsters profited from gambling, usury, prostitution, liquor, drugs and theft. Now states, the nation, Indian tribes, rural counties in Nevada, credit card brands, mortgage lenders, banks in general and asset confiscating police all profit from exactly the same sins.
This may or may not be a good thing. It is certainly not something new in the American pageant. Wyatt Earp enforced the law for big banks and mining companies. Before that he was “muscle.” Before that he was a pimp. Honore de Balzac said, “Behind every great fortune there is a crime.” Crime used to be understood as a kind of cheating for personal gain. Now a crime is anything. Racketeering is anything. The point is to find an excuse to make people suffer.
RICO, as it has evolved, is not intended to punish what most people consider to be crimes, which is to say actions like murder, robbery or what Roman Polanski did to that 13-year-old girl – crimes that lawyers call malum in se. RICO is designed to punish crimes lawyers call malum prohibitum which is Latin for actions that are illegal because they are illegal – like possessing illegal intoxicants or talking on the telephone about illegal intoxicants or smoking in a public place or having a loud and embarrassingly ugly argument with your wife on a Saturday night.
RICO prosecutions virtually ignore malum in se crimes, the actions you have always thought to be a “crime,” although at least a dozen of those did occur or emerge during the Mongols investigation. The predicate crimes that RICO exploits are often trivial and are always state crimes that until 1982 would have been prosecuted in state courts. For example, after the Labor Day Murders, none of the Hells Angels who were charged were ever found guilty of the murders. They confessed to talking about the murders. They confessed to hating Mongols.
Then, almost five years later, on June 17, 1981 the law changed. Congress did not write a new law. The United States Supreme Court did. In a case called United States v Turkette, the Supreme Court changed the meaning of an existing law, called the Racketeer Influenced Corrupt Organizations law, or RICO. The decision wasn’t even close. Conservatives and liberals agreed.
Turkette opened a philosophical and legal Pandora’s Box that redefined the meaning of words like “crime” and “racket;” and redefined whatever separation or connection might once have existed or not existed between local, state and federal crimes. Today a federal prosecutor can federalize virtually any crime he wants federalized. Under federal law punching somebody in the nose can be a “predicate crime.” This evolution of federal law also created a special circumstance under which defendants can be denied a presumption of innocence.
The Turkette decision changed the meaning of “criminal enterprise” away from a legitimate bar, bowling alley or labor union that had been corrupted by “the mob.” The Scheidler decision a decade later decreed that the “criminal enterprise” no longer had to exist for the purpose of making money. After Turkette and Scheidler, a class reunion could be a criminal enterprise. A federal prosecutor only had to imagine it.
National Organization of Women, Inc. v Scheidler was a civil RICO case brought on behalf of abortion providers against a political organization called Operation Rescue. Joseph Scheidler, for whom the decision is named was one of the leaders of Operation Rescue. Members believed that first-term abortion was morally wrong and should be legally prohibited. They protested outside abortion clinics and harassed and intimidated the women who tried to enter. There was a national consensus that members of Operation Rescue were loutish, cruel and unreasonable. The National Organization of Women accused them of being a racket.
“’We cannot tolerate the use of threats and force by one group to impose its views on others,’” NOW’s lawyer. Fay Clayton explained.
A Federal District judge, dismissed the case on the grounds that RICO could only be applied to “enterprises” motivated by financial gain. The Supreme Court overruled him. A racket could then be any group who members were contemptuous of the law. It was a great victory for federal policemen and prosecutors.
Professor G. Robert Blakely, who wrote the RICO Act and gave it its ironic name, lamented that he had never meant for his law to be applied to political and fraternal groups. He said he was “concerned” that after Scheidler RICO might be used against labor unions and other fringe groups like gay rights activists. Since Scheidler, RICO has been most commonly used a basis for the prosecution of outlaw motorcycle clubs.
RICO Praxis
There are several obvious reasons for the federal prosecution of state crimes. First, RICO allows the investigation of these local crimes by vast police bureaucracies like the ATF. These bureaucracies are self perpetuating and have virtually unlimited resources. All they need to persist are crimes to investigate and RICO provides that. Secondly, RICO allows federal prosecutors a legal fiction that can be used to connect what are actually, in reality, unconnected crimes into a vast, imaginary, criminal conspiracy. Additionally, RICO prosecutors do not have to prove beyond a reasonable doubt that defendants actually committed the “predicate crimes” of which they are accused. State prosecutors do but RICO allows federal prosecutors to prove crimes by the civil standard which is a “preponderance of the evidence.” Finally, RICO provides a nice, secure, recession proof way for many lawyers, policemen, and prison guards to make a good living.
Under RICO, if Barack Obama, Henry Louis Gates and Angelina Jolie all like to attend an annual seminar together, and if three people at the seminar have committed two or more criminal predicates, like making a false statement to a federal official or shoplifting, they may be collectively and individually charged with racketeering. They could all be convicted of “the affecting interstate commerce” clause in the RICO law if they sent each other Christmas cards. And the penalty for that racketeering is twenty years in a federal prison.
Many bright and cynical people who should know better still blindly assume that what police do is investigate and solve real crimes. The opposite is true in racketeering investigations. What the ATF, particularly in biker investigations, does is find a way to tie crimes to many related individuals and then create crimes that can be used to prosecute them all. This law enforcement approach is called the “Enterprise Theory of Investigation” and it has a long and twisted history.
A sociologist named Edwin Sutherland coined the term “white collar crime” in the 1930s and wrote a book on the subject in 1949. Sutherland in essence, believed that all businessmen were criminals. With all the best of intentions, after the heartbreak of the Great Depression, Sutherland thought unethical businessmen should be treated worse than murderers. He thought they should be punished for their economic crimes so he advocated that a “person of respectability and high social status in the course of his occupation” should be presumed guilty until proven innocent. Sutherland also attacked the legal concept of mens rea, or guilty mind, which states that a person cannot be guilty of a crime unless he intends to commit a crime. Sutherland’s theories became popular in two seemingly disparate communities – academia and the FBI.
A Sutherland protégé named Donald Cressey created the “enterprise” concept that quickly became the Enterprise Theory of Investigation. Cressey was particularly not talking about bands of anti-materialistic, socially alienated bikers. He intended to oppose what he saw as social injustice. “The people of the business world are probably more criminalistic than the people of the slums,” he wrote in a book he co-authored with Sutherland. The idea of factoring wealth and privilege into the criminal justice equation was attractive to intellectuals. The federal police liked the parts that made prosecutions easier. Of course, in the manner of police bureaucracies everywhere, lest the amateurs know what the professionals are talking about, the Enterprise Theory of Investigation has become simply the ETI.
“The ETI has become the standard investigative model that the FBI employs in conducting investigations against major criminal organizations,” an FBI author explains. “Unlike traditional investigative theory, which relies on law enforcement’s ability to react to a previously committed crime, the ETI encourages a proactive attack on the structure of the criminal enterprise. Rather than viewing criminal acts as isolated crimes, the ETI attempts to show that individuals commit crimes in furtherance of the criminal enterprise itself. In other words, individuals commit criminal acts solely to benefit their criminal enterprise.”
The current idea of the criminal enterprise is very close to what Hannah Arendt meant when she wrote, “Classical totalitarianism predicts possible crimes on the basis of one’s status as an ‘objective enemy.’”
By “criminal enterprise,” the FBI author means any group any Federal Prosecutor decides to prosecute. The Catholic Church and the Boy Scouts of America have not yet been prosecuted as rackets because to do so would create a terrible public backlash. But there is no backlash when the organization is an outlaw motorcycle club. The Scheidler decision completed the legal magic trick by making the “financial motive” disappear.
In motorcycle club cases, in general and against the Mongols in particular, the government uses RICO to enforce a de facto “Bill of Attainder.” Bills, sometimes the word is “writs,” of Attainder are specifically prohibited by Article One, Clause three of the Constitution. This prohibition appears so early in the principal American law because it was one of the “rights” for which the revolutionaries fought and died. Technically, in America it is not illegal to belong to Al Qaeda, the Nazi party, the Ku Klux Klan, La Cosa Nostra, the Communist party or even a motorcycle club. In a case named Uphaus v Wyman in 1959, the Supreme Court called guilt by association “a thoroughly discredited doctrine.”
But RICO allows prosecutors to turn that ruling on its head. It is the same when mass media leads the general public to believe that motorcycle clubs, right wing militias and “cults” are criminal.
Motorcycle clubs are particularly prone to prosecution under RICO because that are so blatantly “organizations” and because their members tend to believe, as Harley-Davidson’s ad agency put it, “in bucking the system that’s built to smash individuals like bugs on a windshield.” More than tribes, more than thugs, motorcycle clubs are an American ideology. And, also for better or worse, a national consensus seems to be building that America is better for renouncing this ideology.
Under RICO, state crimes punishable by months or a year in jail can be punished like murders. RICO also allows the seizure of assets like motorcycles because, the indictments always allege, no motorcycles no motorcycle gang. The enterprise theory also allows indicia searches, which are searches for proof that someone actually belongs to a motorcycle club. In effect, these searches are house wrecking parties. They are inevitably very terrible. Doors and windows are blown open with explosives. Threats like pets are eliminated. Men are beaten and sometimes executed. Wives and children are roughed up. Much glass is broken. Family photo albums, computers and mementos are confiscated.
The nature and practice of modern policing and particularly of racketeering law may help readers understand the trivial nature of many of the charges made in the indictment against the Mongols. The fact that the Mongols are a gossipy family also worked against them because the men who infiltrated the club wrote down all of the gossip. The “preponderance of evidence” rule in RICO cases made that gossip more damning than it would ever be in an ordinary criminal case. The fact that club members often disagreed about Doc Cavazos gave undercover investigators an excuse to get members talking. And, in the end RICO meant that prosecutors didn’t have to use any of the mountains of “evidence” they had collected. They only had to threaten defendants with it. Actually, in many cases they didn’t even show defendants the “evidence.” In many cases prosecutors only alluded to the “evidence” or spread their arms wide and told public defenders the evidence was in two boxes “this big.”
Summing Up
Most of the nonsense that is written about motorcycle outlaws, that they are “international crime empires” and all of that, is based on an amalgamation of sixty years of American history and on a conflation of what most people understand to be the definition of racketeering with the technical, legal definition of racketeering. Most people understand racketeering, a term coined in the 1920s, to refer to something like “protection rackets” or corrupt labor unions, fixed horse races, loan sharking or the Countrywide Home Loan racket. But the Scheidler decision four years before had made it possible to convict almost any fringe group of racketeering.
Depending on where you draw the lines, there were at least four Mongols racketeering cases although subsequent RICO cases against the Pagans and the Outlaws resulted from the same investigation. The main case which began in one Los Angeles courtroom and eventually spread to another Los Angeles courtroom and a courtroom in Orange County, was named United States versus Cavazos and Others. A much smaller case called US versus Maestas and Others was adjudicated in Denver. The smallest racketeering case, against a lone Mongol, is called US versus Christopher Ablett and years after the Mongols bust it is still being contested in Oakland. The fourth case, a civil case over the matter of whether any cop can simply seize what he believes to be “Mongols paraphernalia” when he sees it, was called Ramon Rivera versus Ronnie A. Carter, Acting Director, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); John A. Torres, Special Agent in Charge, ATF Los Angeles Field Division; and Eric H. Holder, United States Attorney General.
The obvious clumsiness of even naming the main court cases hints at, but does not begin to explain, why so little was written about the Mongols after the raids in October 2008. None of the usual biker experts has written about the investigation. The prosecution has been, for all practical purposes, secret. But the case is still important enough that even people who detest the Mongols and “their ilk” should know about it because it is a bright marker on the road of flight from the old to the new and improved America.
The point of Operation Black Rain was to put every outlaw in America out bad – to seize his cut, his motorcycle and his memorabilia, to rough him up, wreck his home, scare him and tell him “don’t come around this club no more.” It was, simultaneously emotionally, financially and legally devastating for the men involved. The point of the “enforcement effort” described in this book was never to punish “criminals.” The point was to crush a set of seductive, romantic, dangerous, and maybe obsolete, ideas.