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In United States v. Brown, No. 01-004, 2001 WL 238183 (E.D. La. March 7, 2001), the defendant filed a motion to dismiss the indictment on the ground that the Government's allegations were flawed. See Brown, 2001 WL 238183, *5. The defendant specifically argued that "Louisiana Consultants" was not an "enterprise" within the meaning of the RICO statute.
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Criminal Action No. 01-004, Section "N".
March 6, 2001.
ORDER AND REASONS
Before the Court are three motions: (1) the Government's Motion for Admissibility of Extrinsic Act Evidence, (2) Defendant Cecil Brown's Motion to Dismiss for Vindictive Prosecution, and (3) Defendant Cecil Brown's Motion to Dismiss Counts 1, 2, 3, 7, 8 and 9 of the Superseding Indictment. For the following reasons, the Government's motion is DENIED, and both of Brown's motions are DENIED.
A. BACKGROUND
The Government alleges that Defendant Cecil Brown engaged in a systematic attempt to extort businessmen seeking to obtain state licenses or contracts in Louisiana. The Government intends to prove that Brown acted as a "front man" for Louisiana Governor Edwin Edwards and offered to use his influence with Edwards to obtain favorable treatment for the businessmen if they paid him or, if they refused, to use those ties to kill their prospects. Brown allegedly demanded from his victims up-front payments in the form of cash or check disguised under a consulting contract with Louisiana Consultants, Inc. ("Louisiana Consultants"). The Government further alleges that the payments made to Louisiana Consultants were divided between Brown and Edwards. The superseding indictment lists four organizational victims — Viewpoint Development Corporation, Top Rank, Inc., Evergreen Global Resources, Inc. and the Coushatta Indian Tribe — and the Government seeks to introduce evidence of two additional organizational victims not named in the superseding indictment — the Louisiana Riverboat Gaming Corporation and the New Orleans Riverboat Corporation — to prove intent.
A brief review of the procedural history of the instant prosecution as it relates to Defendant Brown is warranted. On November 29, 1999, a federal grand jury for the Middle District of Louisiana indicted Brown on charges of extortion, interstate travel in aid of unlawful activity, and conspiracy. On November 30, 2000, Chief Judge Carolyn Dineen King of the United States Court of Appeals for the Fifth Circuit assigned Brown's case to this Court. At the request of both parties, this Court continued the trial until February 5, 2001 in order to allow defense counsel additional time for adequate preparation.
The case was assigned M.D. La. Criminal Docket No. 99-171.
Upon transfer, the case was assigned E.D. La. Criminal Docket No. 00-381.
On December 13, 2000, Brown moved to dismiss the original indictment for a violation of the Speedy Trial Act. On January 5, 2001, this Court granted Brown's motion and dismissed the indictment without prejudice. On the same day, a grand jury returned an indictment against Brown, and, on January 26, 2001, the Government superseded The new indictment and superseding indictment, which form the basis for the case as it now comes before the Court, contained allegations and charges substantially identical to those included in the original indictment and added new allegations concerning the Coushatta Indian Tribe, a RICO charge, and a notice of RICO forfeiture.
Upon re-indictment, the case was assigned E.D. La. Criminal Docket No. 01-004.
The case is set for jury trial on March 12, 2001. In anticipation, the Government and the Defense have filed several motions.
B. LAW AND ANALYSIS 1. Government's Motion for Admissibility of Extrinsic Act Evidence.
In the original indictment, the Government alleged that Brown extorted three companies: Viewpoint Development, Top Rank, and Evergreen Global Resources. On December 7, 2000, the Government filed a motion pursuant to Federal Rule of Evidence 404(b), requesting that it be allowed to present evidence regarding "two other systematic acts of extortion by Cecil Brown" involving the Louisiana Riverboat Gaming Corporation and New Orleans Riverboat Corporation and the Coushatta Indian Tribe "that occur[ed] within the same general time frame and mirror[edl the exact same pattern of modus operandus as the three extortions charged in the indictment." Gov't Mem. p. 3 (E.D. La. Criminal Docket No. 00-381, Rec. Doc. No. 4). Before that motion could be heard, Brown filed a motion to dismiss for violation of the Speedy Trial Act, which resulted in the dismissal of the original indictment without prejudice.
In the new indictment and superseding indictment, the Government incorporated allegations regarding the Coushatta Indian Tribe. Accordingly, in the motion now before the Court, the Government requests only that the evidence pertaining to the alleged riverboat offenses be admitted pursuant to Rule 404(b).
Rule 404(b) provides that
Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show action in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident, provided that upon request by the accused, the prosecution in a criminal case shall provide reasonable notice in advance of trial, or during trial if the court excuses pretrial notice on good cause shown, of the general nature of any such evidence it intends to introduce at trial.
The Government and Brown agree that, in the Fifth Circuit,United States v. Beechum, 582 F.2d 898, 911 (5th Cir. 1978) (en banc), furnishes the test for admitting extrinsic offense evidence under Rule 404(b). Under Beechum, the Court first must determine whether the extrinsic offense evidence is relevant to an issue other than the defendant's character. If it is, the Court then must determine whether the evidence satisfies the requirements of Rule 403, which provides that "relevant . . . evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence." FED. R. EVID. 403.
The Government notes that Brown's intent will be a crucial issue at trial and hypothesizes that Brown will argue that he was merely joking when he used Edwin Edwards' name during business negotiations. Brown's use of the same pattern of collecting money and issuing threats in connection with the riverboat licenses, the Government contends, will rebut this defense by establishing that Brown actually was acting pursuant to a specific plan of action with the criminal intent to commit extortion. The differences in the schemes noted by Brown notwithstanding, the Court agrees with the Government that the riverboat evidence is relevant to Brown's intent.
However, the Court agrees with Brown that this evidence fails to pass muster under Rule 403. As Brown correctly notes, interjection of the riverboat issues, which were the subject of an extremely long and complicated trial in a related case in which Brown was also a defendant, will increase exponentially the time and effort required to try the instant case. Such added confusion does not appear warranted since the importance and impact of the riverboat evidence in rebutting Brown's defense is diminished by the fact that the superseding indictment itself alleges four separate schemes using the same modus operandus. Thus, although not cumulative, the riverboat evidence is less significant here than were Brown charged with only one scheme.
United States v. Edwards, et al., M.D. La. Criminal Docket No. 98-165.
Accordingly, the Court DENIES the Government's Motion for Admissibility of Extrinsic Act Evidence.
2. Brown's Motion to Dismiss for Vindictive Prosecution.
As previously discussed, the original indictment contained neither allegations regarding the Coushatta Indian Tribe nor a RICO charge. Not until after Brown successfully moved the Court to dismiss the original indictment for a violation of the Speedy Trial Act was he charged with such conduct. Brown argues that the Assistant United States Attorney was actually and presumptively vindictive in bringing these new charges (which carry with them additional penalties) following the successful exercise of his legal rights, in violation of Fifth Amendment Due Process. The Court disagrees.
Following a line of several Supreme Court cases, the en banc Fifth Circuit set forth the standard for evaluating a claim of prosecutorial vindictiveness in United States v. Krezdorn, 718 F.2d 1360 (5th Cir. 1984) (en banc), cert. denied, 465 U.S. 1066, 104 S.Ct. 1416, 79 L.Ed.2d 742 (1984):
If the defendant challenges as vindictive a prosecutorial decision to increase the number or severity of charges following a successful appeal, the court must examine the prosecutor's actions in the context of the entire proceedings. If any objective event or combination of events in those proceedings should indicate to a reasonable minded defendant that the prosecutor's decision to increase the severity of charges was motivated by some purpose other than a vindictive desire to deter or punish appeals, no presumption of vindictiveness is created. In trying the issue of vindictiveness, the prosecutor may offer proof of the sort suggested in Hardwick [v. Doolittle, 558 F.2d 292 (5th Cir. 1977),] that as a matter of fact his actions were not vindictive. The burden of proof (by a preponderance of the evidence) remains on the defendant who raised the affirmative defense. If, on the other hand, the course of events provides no objective indication that would allay a reasonable apprehension by the defendant that the more serious charge was vindictive, i.e., inspired by a determination to "punish a pesky defendant for exercising his legal rights," a presumption of vindictiveness applies which cannot be overcome unless the government proves by a preponderance of the evidence that events occurring since the time of the original charge decision altered that initial exercise of the prosecutor's discretion.Id. at 1365 (footnote added). In addition to showing that the AUSA "upped the ante" by increasing the number of charges and potential criminal liability, Brown contends that he can establish a case of actual vindictiveness because the AUSA explicitly threatened — and then carried out that threat — to seek a new indictment adding new allegations and new charges if Brown pursued his Speedy Trial Act motion. Whether the prosecutor was vindictive in adding the RICO charge and the Coushatta allegations, however, depends on one's interpretation of the events leading up to the January 2001 indictment and superseding indictment.
Of course, in the instant case, there has been no "appeal." Nonetheless, the Fifth Circuit rejected a pre-trial/post-trial dichotomy in Krezdorn, see 718 F.2d at 1364 and dissent, making this standard applicable in a wide variety of situations.
The prosecutor's version of those events comports with the Court's own recollection. First, the Court is quite familiar with the trilogy of related cases involving Governor Edwards, of which the present case is the third, and believes that the Government originally indicted Brown in order to avoid statute of limitations problems and then allowed the present case to lay essentially dormant until the first two cases were completed. Indeed, the AUSAs presently assigned to the instant case were each involved in one of the previous two cases. Thus, the apparent dilatoriness in the change of the original charge evaporates when viewed in context.
See United States v. Brown, 218 F.3d 415 (5th Cir. 2000), cert. denied, 121 S.Ct. 854 (2001) (noting special circumstances of the three related prosecutions, which include United States v. Edwards, et al., M.D. La. Criminal Docket No. 98-165, United States v. Brown, M.D. La. Criminal Docket No. 99-151, and the instant case). The undersigned ultimately presided over the latter two cases and, in doing so, became quite familiar with the first case.
Second, as Brown notes, this Court conducted the telephone conference during which the AUSA stated that he would add the RICO charge and Coushatta allegations to a new indictment, and the Court did not perceive the prosecutor's statements as a threat. Instead, the Court believes the prosecutor when he states that
going to the grand jury with a new indictment was a decision that had already been made by December 8, 2000. The possible defect caused by the Travel Act counts necessitated that the indictment should be superseded. Further, because a vehicle was needed through which to obtain forfeiture [and] to bring in evidence about the Coushatta Tribe, . . . RICO was the best charge available.
Opp'n Mem. p. 3. This contention is reinforced by the fact that the Government had filed its Rule 404(b) motion regarding the Coushatta allegations prior to Brown's Speedy Trial Act motion.
The Court does not decide whether the decision to include the RICO charge and Coushatta allegations were additionally motivated by the prosecution's desire to encourage Brown to plead guilty. While such a decision generally would be acceptable, see, e.g., Bordenkircher v. Hayes, 434 U.S. 357, 98 S.Ct. 663, 54 L.Ed.2d 604 (1978), the Court is in a better position to evaluate the Government's other arguments, which it finds dispositive.
Third, in discussing the Speedy Trial Act motion, the Court indicated to the parties that, even if it found that a violation had occurred, given the unusual circumstances of the instant prosecution, it was likely to dismiss the indictment without prejudice. See generally United States v. Cecil Brown, Criminal Docket No. 00-381, Order and Reasons, 2001 WL 13337 (E.D. La. Jan. 5, 2001). As the Court understood it, the prosecutor was merely giving Brown fair warning that, if forced to reindict, he would cure perceived deficiencies in the original indictment that he might not have been allowed to correct had trial proceeded as scheduled. Moreover, given that the dismissal was without prejudice, the Court finds it extremely unlikely that the prosecutor would feel the need to "punish a pesky defendant for exercising his legal rights." See United States v. Goodwin, 457 U.S. 368, 384, 102 S.Ct. 2485, 2494, 73 L.Ed.2d 74 (1982) (declining to apply presumption of vindictiveness where such a response was extremely unlikely).
Thus, with all due respect to defense counsel, whose sincerity is not doubted, the Court finds that the objective combination of events should indicate to a reasonable minded defendant that the prosecutor's decision to increase the severity of charges was motivated by some purpose other than a vindictive desire to deter or punish appeals: namely, to strengthen the Government's case. A presumption of vindictiveness, therefore, is inappropriate. And, as discussed above, the Court finds that the prosecutor's alleged "threat" was not an instance of actual vindictiveness.
Accordingly, the Court DENIES Brown's Motion to Dismiss the Superseding Indictment for Vindictive Prosecution.
3. Brown's Motion to Dismiss Counts 1, 2, 3, 7, 8 and 9 of the Superseding Indictment.
Finally, Brown moves the Court to dismiss several counts of the superseding indictment on the basis that the Government's allegations are flawed. First, Brown moves to dismiss the RICO allegations in Count 1 and the RICO forfeiture on the grounds that the indictment fails to charge a valid RICO violation. Second, Brown moves to dismiss the extortion charges in Counts 2, 3, 7, 8 and 9 on the grounds that the indictment fails to charge an offense of extortion "under color of official right."
a. The RICO Allegations.
Under RICO, it is unlawful for any person to derive income through a pattern of racketeering or to acquire an interest in an enterprise engaged in racketeering. See 18 U.S.C. § 1962. In order to establish a RICO violation, the Government must allege and prove the existence of an enterprise, the defendant's employment by or association with that enterprise, and the defendant's conduct of or participation in the conduct of the enterprise's affairs through a pattern of racketeering activity. See United States v. Cauble, 706 F.2d 1322, 1331 (5th Cir. 1983). In the case at bar, the Government alleges that Brown committed acts of extortion while associated with Louisiana Consultants, the RICO enterprise. Defendant Brown contends that the Government's allegations are flawed in two respects. First, Brown argues that Louisiana Consultants is not an "enterprise" within the meaning of the RICO statute. In a related argument, Brown claims that Louisiana Consultants is his alter ego, and that the Government's allegations violate § 1962(c)'s requirement that the RICO "person" be distinct from the RICO "enterprise."
(1) The Existence of a RICO Enterprise.
The enterprise element of a RICO charge maybe satisfied either by proving the existence of a legal entity or a group of individuals who are associated-in-fact. See Bonner v. Henderson, 147 F.3d 457, 459 (5th Cir. 1998), 18 U.S.C. § 1961(4). A legal entity is one that "has sufficient existence in legal contemplation that it can function legally, be sued or sue and make decisions through agents as in the case of corporations."Bonner 147 F.3d at 459 (quoting BLACK'S LAW DICTIONARY (6th ed. 1990)). An association-in-fact, on the other hand, is "an ongoing organization with members functioning as a continuing unit." Id. (quoting Aetna Casualty Surety Co. v. Rodco Autobody, 43 F.3d 1546, 1557 (1st Cir. 1994)).
Although Bonner involved a civil suit rather than a criminal prosecution, the substantive requirements of § 1962(c) are the same, and it is appropriate to rely on civil RICO precedent when analyzing criminal RICO liability. See St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425, 446 n. 15 (5th Cir. 2000).
Brown incorporated Louisiana Consultants in June of 1992. The firm lost its corporate status in 1994 but continued to do business under the same name until 1997. Brown asserts that once Louisiana Consultants lost its status as a corporation, it was no longer a distinct legal entity and could not be a RICO enterprise. The Government argues that after Louisiana Consultants ceased to operate as a corporation, it became an association-in-fact RICO enterprise.
To establish an association-in-fact enterprise, the Government must show that (1) the enterprise has an existence separate and apart from the pattern of racketeering, (2) the enterprise is an ongoing organization, and (3) the members of the enterprise function as a continuing unit as shown by a hierarchical or consensual decision-making structure. See Crowe v. Henry, 43 F.3d 198, 205 (5th Cir. 1995). The Government claims that Louisiana Consultants was an association between Brown and Edwin Edwards. Count 1 of the superseding indictment alleges that Brown "acted as a `front man' for Governor Edwards, carrying out a variety of tasks, including, among other things, extortions and frauds for the purpose of enriching himself and Governor Edwards and insulating Governor Edwards from unnecessary direct contact with victims of the extortions and frauds." Count 1, ¶ A(3). In addition, the Government claims that Brown told at least one of the alleged extortion victims that Edwards owned half of Louisiana Consultants. Opp'n. Mem. at 3.
The Court finds that these charges sufficiently allege a RICO association-in-fact enterprise. See United States v. Boyd, 885 F.2d 246, 249 (5th Cir. 1989) (holding that "[t]he validity of an indictment is governed by practical, not technical considerations" and the appropriate test "is not whether the indictment might have been drafted with more clarity, but whether it conforms to minimal constitutional standards"). Accordingly, because the superseding indictment alleges that Louisiana Consultants consisted of at least Brown and Edwards, Brown's motion to dismiss the superseding indictment for failure to allege a RICO enterprise is DENIED.
(2) 18 U.S.C. § 1962(c).
Even if Louisiana Consultants is an association-in-fact, Brown argues that the Government's RICO charges should be dismissed on the grounds that the alleged RICO enterprise was his alter ego. Because of the structure of § 1962(c), the Fifth Circuit has held that the RICO "person" and the RICO "enterprise" must be distinct. See Bishop v. Corbitt Marine Ways, Inc., 802 F.2d 122, 122-23 (5th Cir. 1986) (holding that "[i]t is the learned opinion and majority opinion of most courts facing the question that there must be a distinction between the RICO `person' and the RICO `enterprise'").
The Fifth Circuit, however, no longer insists on a strict distinction between the "person" and the "enterprise" in an association-in-fact. In St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425, 445 (5th Cir. 2000), the Fifth Circuit held that "courts have routinely required a distinction when a corporation has been alleged as both a RICO defendant and a RICO enterprise, but a similar requirement has not been mandated when individuals have been named as defendants and as members of an association-in-fact enterprise." Id. at 445. If the requirements of § 1962(c) are not relaxed for association-in-fact enterprises such as Louisiana Consultants, "an individual member of a collective enterprise, such as an association-in-fact, could not be prosecuted for violating § 1962(c) because he or she would not be considered distinct from the enterprise." Id.
The appropriate test for determining whether an individual defendant is sufficiently distinct from an alleged association-in-fact was set forth in McCullough v. Suter, 757 F.2d 142 (7th Cir. 1985) and adopted by the Fifth Circuit inGuidry v. Bank of LaPlace, 954 F.2d 278, 283 (5th Cir. 1992):
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 are really 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.McCullogh, 757 F.2d at 144.
In the case at bar, the Court finds that the Government properly alleges that Louisiana Consultants is "practically" separable from defendant Brown. The Government contends that Louisiana Consultants was an association between Cecil Brown and Edwin Edwards, and that the company employed a secretary. Because the Government claims that there were people other than Brown working for the enterprise and that Brown either cooperated with or took orders from Edwards, the Court finds that Louisiana Consultants and Brown are distinct. Accordingly, Brown's motion to dismiss Count 1 for failing to comply with 18 U.S.C. § 1962 (c) is DENIED.
b. The Extortion allegations.
Counts 2, 3, 7, 8 and 9 of the superseding indictment allege that defendant Brown conspired to commit and did in fact commit extortion "under color of official right," in violation of 18 U.S.C. § 1951 and 1952. However, the superseding indictment does not allege that Brown was a public official; it merely states that Brown "was a cattle rancher and a close friend and associate of Edwin Edwards, the Governor of Louisiana, holding the title of `Personal Assistant to the Governor.'" Count 1, ¶ A. Because the superseding indictment does not allege that he was a public official, Brown argues that the charges of extortion under color of official right must be dismissed.
The Government responds that, although conviction under § 1951 requires the participation of a public official, private persons who are not themselves officials may be convicted for aiding and abetting or conspiring with public officials in extortion schemes. Brown points out that the superseding indictment does not charge him with aiding and abetting extortion. However, the "words `aid and abet' need not appear in the indictment in order to sustain a conviction as an aider and abettor." U.S. v. Gordon, 812 F.2d 965, 969 (5th Cir. 1987). See also U.S. v. Neal, 951 F.2d 630, 633 (5th Cir. 1992) (holding that "[a]iding and abetting is not a separate offense, but it is an alternative charge in every indictment, whether explicit or implicit"); U.S. v. Masson, 582 F.2d 961, 963 (5th Cir. 1978). Accordingly, the Court holds that the superseding indictment properly charges Brown with extortion, and Brown's motion to dismiss Counts 2, 3, 7, 8 and 9 is DENIED.
C. CONCLUSION
IT IS ORDERED that
(1) the Government's Motion for Admissibility of Extrinsic Act Evidence is DENIED;
(2) Defendant Cecil Brown's Motion to Dismiss for Vindictive Prosecution is DENIED; and
(3) Defendant Cecil Brown's Motion to Dismiss Counts 1, 2, 3, 7, 8 and 9 of the Superseding Indictment is DENIED.