On certification to the Superior Court, Appellate Division, whose opinion is reported at 268 N.J. Super. 72 (1993).
Chief Justice Wilentz and Justices Pollock, O'Hern, Garibaldi and Stein join in Justice Handler's opinion. Justice Coleman did not participate.
The opinion of the court was delivered by: Handler
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
STATE OF NEW JERSEY V. PATRICK BALL, ET AL. (and related matters) (A-17/18/19-94)
Argued October 12, 1994 -- Decided July 20, 1995
HANDLER,J., writing for a unanimous Court.
Defendants participated in a lucrative but unlawful scheme to dump solid waste generated in New York at several unauthorized New Jersey sites. Defendants Harvan and Bassi arranged for and operated illegal dump sites in North Bergen, Newark, and at the Hackensack Meadowlands Development Commission bailing facility. They located property to be filled and recruited haulers looking for inexpensive places to dump. Defendants Hurtuk, Dulanie and Mocco were North Bergen public officials who accepted cash bribes to protect and promote the illegal landfills in that town. Also involved in the operation was defendant Ball, one of the haulers who carted the waste from New York and disposed of it at the sites arranged by Bassi and Harvan at a lower cost than would have been paid to dump in New York. Other participants in the dumping scheme included the lookouts at the dump sites, a money launderer, and a "fixer, "who handled any problems that arose during the operation.
On April 1, 1987, the grand jury handed down a 116-count indictment charging Bassi, Harvan, Hurtuk, Mocco and Dulanie, among others, with various crimes, including racketeering and conspiracy to commit racketeering pursuant to the New Jersey Racketeer Influenced and Corrupt Organizations (RICO) Act. The RICO Act generally makes it a crime for a person to be employed by or associated with "an enterprise" and to engage or participate or become involved in the business of the enterprise "through a pattern of racketeering activity, "N.J.S.A. 2C:41-2(b) and (c). The Act also makes it a crime for a person to conspire to engage in such conduct, N.J.S.A. 2C:41-2(d)..
Bassi and Harvan were found guilty of, among other things, conspiracy to commit racketeering and of racketeering under the RICO Act. Hurtuk, Dulanie and Mocco were convicted of conspiracy to commit racketeering. Defendants appealed their convictions based on both RICO and non-RICO issues. The Appellate Division affirmed the convictions. The Supreme Court granted defendants' petitions for certification limited solely to the issues raised concerning the construction and interpretation of the above referenced provisions of the RICO Act.
HELD: The trial court adequately instructed the jury in respect of the proper understanding and application of N.J.S.A. 2C:41-2(c) and (d) of the New Jersey Racketeering Influenced and Corrupt Organizations (RICO) Act. Furthermore, the evidence was sufficient to support the RICO convictions under those provisions of the Act.
1. The heart of a RICO violation is the involvement in the affairs of an enterprise through a pattern of racketeering activity. Legislative history and caselaw dealing with both state and federal RICO statutes support the following Conclusions. First, the RICO statute, in using the term "enterprise," contains no express or implied requirement for a distinct ascertainable structure; rather, it is framed broadly to include any group of persons "associated in fact." Second, legislative history demonstrates that "enterprise" was meant to be construed broadly since the statute itself commands liberal construction of the term. Moreover, the Legislature intended its statute to reach less-organized and less-traditional criminal elements as well as traditional elements. Under the RICO Act "enterprise" is an element separate from the "pattern of racketeering activity, "and the State must prove the existence of both. Because the enterprise is distinct from the incidents constituting the pattern of activity, it must have an "organization." The organization of an enterprise need not feature an ascertainable structure or a structure with a particular configuration; rather, must divide among its members the tasks necessary to achieve a common purpose. (pp. 10-20)
2. To constitute a RICO offense, a defendant's involvement in an enterprise must be accomplished "through a pattern of racketeering activity." Some degree of continuity, or threat of continuity, is required and is inherent in the "relatedness" element of the "pattern of racketeering activity." RICO is not designed to punish mere repeated offenses; there must be some connection among criminal incidents. Thus, the primary criterion of "pattern of racketeering activity" is "relatedness." That calls for the application of a broad standard involving the totality of all relevant circumstances, which may include "continuity." (pp. 20-30)
3. The term "pattern of racketeering activity" is not unconstitutionally vague. The statute makes clear that when certain conduct that the Legislature has already made criminal is committed in a certain way with a certain purpose, it will carry an enhanced penalty. Moreover, the term is also not vague as applied to defendants; any person of ordinary intelligence would realize that defendants' activities constituted conduct that the law proscribed. (pp. 30-32)
4. The RICO Act does not require that a defendant be found to exercise responsibilities of operation or management in order to "conduct or participate" in an enterprise. Under the Act, a person is employed by or associated with an enterprise if he or she has a position or a functional connection with the enterprise that enables him or her to engage in conduct or participate directly or indirectly in the affairs of the enterprise. Further, to conduct or participate in the affairs of an enterprise means to act purposefully and knowingly in the affairs of the enterprise in the sense of engaging in activities that seek to further, assist or help effectuate the goals of the enterprise. (pp. 32-38)
5. A RICO conspiracy has two separate elements: an agreement to violate RICO and the existence of an enterprise. The agreement to violate RICO also has two necessary aspects: 1) the agreement to conduct or participate in the conduct of the affairs of the enterprise; and 2) an agreement to the commission of at least two predicate acts. It can be inferred that the Legislature intended that general conspiracy law apply to prosecutions for conspiracy to violate RICO. Thus, to establish a RICO conspiracy, the State must show that a defendant agreed to participate directly or indirectly in the conduct of the affairs of the enterprise by agreeing to commit or to aid other members of the conspiracy to commit at least two racketeering acts; and that he or she acted knowingly and purposely with the knowledge of the unlawful objective of the conspiracy and with intent to further its unlawful objective. The defendant need not agree to commit personally the two predicate acts of racketeering. (pp. 39-46)
6. Defendants were at the center of a large-scale dumping scheme involving many people. All knew of the illegal objective of the enterprise. The scheme displayed an "organization" of its members as evidenced by the interaction of the participants, the extensive planning, coordination, and cooperation necessary to effectuate its objectives. Moreover, the State provided ample evidence of a pattern of racketeering activity under the totality of circumstances by demonstrating incidents of racketeering that are both related and are neither isolated nor disconnected. (pp. 46-52)
7. The trial court's charge sufficiently embraces the standard now adopted in respect of the participation requirement of the substantive crime of racketeering. In addition, there was ample evidence to conclude such participation existed. Furthermore, the trial court's instructions correctly conveyed to the jury the standards now adopted for determining a RICO conspiracy and the evidence was more than sufficient to support the conspiracy convictions. (pp. 52-57)
Judgment of the Appellate Division is AFFIRMED.
CHIEF JUSTICE WILENTZ AND JUSTICES POLLOCK, O'HERN, GARIBALDI and STEIN join in JUSTICE HANDLER's opinion. JUSTICE COLEMAN did not participate.
The opinion of the Court was delivered by
This criminal appeal arises from defendants' participation in an unlawful scheme to dump solid waste generated in New York at several unauthorized New Jersey sites. Defendants were prosecuted and convicted under the New Jersey Racketeer Influenced and Corrupt Organizations Act, commonly referred to as the RICO Act. In appealing their convictions, defendants raised several RICO issues, as well as many non-RICO issues. The Appellate Division affirmed the convictions. 268 N.J. Super. 72 (1993). This Court granted defendants' petitions for certification, "limited solely to the issues raised regarding construction of the New Jersey Racketeer Influenced and Corrupt Organizations Act." 135 N.J. 304, 305 (1994).
The RICO Act, generally, makes it a crime for a person to be employed by or associated with "an enterprise" and to engage or participate or become involved in the business of the enterprise "through a pattern of racketeering activity." N.J.S.A. 2C:41-2b and 2c. The Act also makes it a crime for a person to conspire to engage in such conduct. N.J.S.A. 2C:41-2d. Defendants were prosecuted and convicted under those provisions of the RICO Act.
The meaning and application of those provisions constitute the central inquiry in this appeal. Ultimately, in light of our interpretation of the RICO Act, the appeal presents the questions of whether the trial court adequately instructed the jury with respect to the proper understanding and application of the critical RICO provisions, and whether the evidence was sufficient to support the RICO convictions under those provisions.
The Legislature adopted the New Jersey Racketeer Influenced and Corrupt Organizations Act, N.J.S.A. 2C:41-1 to -6.2, in 1981. Convictions in this case were based on violations of N.J.S.A. 2C:41-2c and 2d. The extensive evidence introduced at trial is recited in detail in the opinion of the Appellate Division. 268 N.J. Super. at 82-88. That evidence, for the most part not disputed, consisted of testimony of witnesses to the dumpings, surveillance videotapes, recorded telephone conversations, and records created and maintained by the various defendants.
Defendants Michael Harvan and Richard Bassi were the "dirt brokers" who arranged for and operated the illegal dump sites in North Bergen, Newark, and at the Hackensack Meadowlands Development Commission (HMDC) baling facility. They located property to be filled and recruited haulers looking for inexpensive places to dump. Defendants George Hurtuk, Joseph Dulanie, and Joseph Mocco were North Bergen public officials who accepted cash bribes to protect and promote the illicit landfills in that town. At the time of the scheme, Hurtuk was the license inspector, Dulanie was the deputy chief of police, and Mocco was the town clerk. Also necessary to the operation were haulers such as defendant Patrick Ball, since deceased, who carted the waste from New York and disposed of it at the sites arranged by Bassi and Harvan at a lower cost than they would have had to pay to dump in New York. Other participants in the dumping scheme included the lookouts at the dump sites, a money launderer, and a "fixer," who handled any problems that arose during the operation.
The HMDC is a state agency controlling zoning and planning in all or part of fourteen towns comprising the Hackensack Meadowlands. The portions of North Bergen in which the dumping occurred are within that area. Any landfill within the area needed permits from the HMDC and from the Department of Environmental Protection (DEP). To avoid obtaining the agency permits, Bassi and Harvan bribed the North Bergen public-official defendants to gain their permission to dump debris at both the sites in North Bergen and the HMDC baler, and to obtain their assurance that they would intercept and handle any permit problems.
The evidence indicates that the dumping in North Bergen began in January 1986 at 83rd Street and West Side Avenue. That month, a North Bergen police officer encountered the dumping activity while Harvan was present. Harvan told him that he was in charge of the trucks at the site and that Hurtuk, the town license inspector, had given him permission to use the property for dumping.
In February, the dumping moved to a site near 69th Street and West Side Avenue. For that site, Harvan hired a night checker for $150 a day to copy the license-plate numbers of the trucks dumping there and to record the number of loads dumped each night. The night checker testified that Harvan was present at the site every night it operated and that both Bassi and Hurtuk were present on the first night the site was used. Harvan instructed the checker to call Hurtuk if he had any trouble at the site. The police investigated the dumping several times, and eventually an order from Hurtuk was posted at police headquarters stating that dumping was permitted at the 69th Street location.
In March, the dumping moved to another area near 83rd Street. Later that month, both the Division of Criminal Justice (DCJ) and the HMDC began investigating the landfill operation. When DCJ personnel inquired about the dumping, the town clerk, Mocco, assured the investigators that HMDC had granted permission for the dumping, although it had not, and produced a license issued to a fictitious M. Black.
Days later, the dumping ceased at 83rd Street and a new dump opened at the Walsh Trucking property. The DCJ surveillance continued, and the dumping proceeded at the Walsh site into the second week of May. The investigators saw Bassi, Harvan, Hurtuk, and Dulanie at the site during that period.
On May 15, pursuant to court orders, DCJ installed wiretaps on Bassi's home telephone. Shortly after one truck had become entangled in a utility wire and caused an explosion, in a recorded conversation, Harvan told Bassi that Mocco had told him "'don't worry about [the wire] . . . Keep rolling.'" The dumping continued at both the 83rd Street and Walsh sites and the enterprise also used the HMDC baling facility. The haulers who had contracted with Bassi and Harvan indicated on HMDC forms that the waste originated in a place approved for dumping at that baler, such as Clifton, when in fact the waste came from New York. In addition, the trucks had magnetic signs reading "Big M" or "Harbas Trucking" placed over the name painted on the side of the trucks.
By early June, the investigation had made dumping so risky that Bassi and Harvan told the haulers to take loaded trucks back to New York. Recorded conversations between Bassi and Harvan reveal that they were annoyed by their problems in North Bergen because they had paid their "rent" to the town officials. They continued to work with the town officials, however, to try to resume dumping in North Bergen.
The enterprise was financially rewarding to all its participants. Seized financial records covering the period from February to June 1986 revealed that the billings of Harvan and Bassi for dumping totalled $888,220 and that they each netted approximately $300,000 to $350,000 from the operation. Written records of the expenses of the scheme covering a three-month period show payments ranging from $100 to $1,000 to the "boss" or "big guy," referring to Mocco, totalling $29,100; to the "chief," referring to Dulanie, totalling $42,100; and to the "fat man," referring to Hurtuk, totalling $27,500. The haulers benefitted from the operation because Bassi and Harvan charged approximately half of the estimated $575 that haulers would have had to pay to dump legally in New York.
On April 1, 1987, the grand jury handed down a 116-count indictment charging Bassi, Harvan, Hurtuk, Mocco, and Dulanie, among others, with various crimes including racketeering, conspiracy to commit racketeering, bribery, theft of services, falsifying and tampering with public records, forgery, and the unlawful engagement in the business of solid waste collection and disposal. Defendants' trial began on October 11, 1988, and lasted until April 17, 1989, and all were convicted of certain of the charges.
The jury found Bassi and Harvan guilty of conspiracy to commit racketeering, contrary to N.J.S.A. 2C:41-2d, and of racketeering, contrary to N.J.S.A. 2C:41-2c. It also found them both guilty of bribery, in violation of N.J.S.A. 2C:27-2c and -2d and N.J.S.A. 2C:2-6; uttering a forged instrument, in violation of N.J.S.A. 2C:21-1 and N.J.S.A. 2C:2-6; criminal mischief, contrary to N.J.S.A. 2C:17-3a and N.J.S.A. 2C:2-6; and engaging in solid-waste disposal without a certificate of public convenience, contrary to N.J.S.A. 48:13A-6 and N.J.S.A. 48:13A-12. The jury convicted Hurtuk, Dulanie, and Mocco of conspiracy to commit racketeering, contrary to N.J.S.A. 2C:41-2d, as well as of bribery, contrary to N.J.S.A. 2C:27-2c, and of official misconduct, contrary to N.J.S.A. 2C:30-2a. Dulanie and Hurtuk were also found guilty of official misconduct, in violation of N.J.S.A. 2C:30-2b. Lastly, Mocco and Hurtuk were convicted of bribery, in violation of N.J.S.A. 2C:27-2d.
The court sentenced both Bassi and Harvan to aggregate terms of seventeen years imprisonment and fined them each $150,000. It also imposed Violent Crimes Compensation Board (VCCB) penalties of $450 on each defendant. The court merged the conspiracy-to-commit-racketeering conviction with the racketeering conviction, but did not merge the other convictions with those for racketeering. The court sentenced Hurtuk to an aggregate prison term of fifteen years, and ordered him to make restitution in the amount of $27,000. The court also fined him $75,000 and imposed a VCCB penalty of $90. Dulanie was sentenced to an aggregate prison term of fifteen years, and was ordered to make restitution in the amount of $41,600. The court fined him $75,000 and imposed a VCCB penalty of $60. Mocco was sentenced to an aggregate prison term of twenty years, and ordered to make restitution in the amount of $56,300. The court fined him $200,000 and imposed a VCCB penalty of $90. The sentencing court did not merge any of the other convictions into the conspiracy-to-commit-racketeering conviction.
The gravamen of a RICO violation, frequently referred to as "racketeering," is the involvement in the affairs of an enterprise through a pattern of racketeering activity. Specifically, the RICO Act provides:
c. It shall be unlawful for any person employed by or associated with any enterprise engaged in or activities of which affect trade or commerce to conduct or participate, directly or indirectly, in the conduct of the enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.
d. It shall be unlawful for any person to conspire as defined in N.J.S. 2C:5-2, to violate any of the provisions of this section.
We consider first the interpretation to be accorded the term "enterprise." N.J.S.A. 2C:41-1 provides a definition:
c. "Enterprise" includes any individual, sole proprietorship, partnership, corporation, business or charitable trust, association, or other legal entity, any union or group of individuals associated in fact although not a legal entity, and it includes illicit as well as licit enterprises and governmental as well as other entities.
At the outset we note that the definitions of "enterprise" in the federal and New Jersey RICO statutes are similar. *fn1 Indeed, as originally introduced in the Assembly in February 1980, the New Jersey RICO statute paralleled federal RICO. The Legislature, however, came to perceive purposes and goals to be achieved by the proposed anti-racketeering statute distinct from those of the federal statutory scheme. Consequently, in many respects our Legislature departed from the federal example. Nevertheless, because the federal statute served as an initial model for our own, we heed federal legislative history and case law in construing our statute.
The legislative history for federal RICO indicates that Congress' prime concern was the eradication of "organized crime." United State v. Turkette, 452 U.S. 576, 591, 101 S. Ct. 2524, 2532, 69 L. Ed. 2d 246, 259 (1981). Congress' specific intentions, though, were not in every respect apparent, and so there has evolved an extensive and variegated jurisprudence on federal RICO. Among the subjects debated in the jurisprudence is the meaning of "enterprise." David Vitter, The RICO Enterprise as Distinct from the pattern of Racketeering Activity: Clarifying the Minority View, 62 Tul.L.Rev. 1419 (1988).
The history of federal court attention to the problem of the meaning of "enterprise" begins, for our purposes, with the United States Supreme Court's decision in Turkette, supra, in which the Court considered the meaning of the federal statute's "enterprise" element. Prior to that decision, however, in New Jersey in 1978 an Organized Crime Task Force issued a Report. It noted that by 1968, New Jersey had acquired a national reputation as a haven for organized crime. Organized Crime Task Force, Report at 1 (1978) [hereinafter Report]. The Report evaluated the steps New Jersey had taken to protect the integrity of local government and law enforcement agencies, and made recommendations for improving efforts to eradicate organized crime in this State. The Task Force focused on the problem of infiltration of organized crime into government and legitimate businesses.
The Legislature, however, refused to limit the statute's application to cases of infiltration of legitimate business by organized crime. N.J.S.A. 2C:41-1c. Moreover, the Legislature decided not to limit the statute's application only to such traditional organized crime interests as the Mafia. Instead, the Legislature determined that the statute should broadly cover "organized crime type activities." N.J.S.A. 2C:41-1.1c.
In 1981, the year of the enactment of the New Jersey statute, the Supreme Court decided Turkette, supra. The Supreme Court considered whether "enterprise" under RICO encompassed wholly illegitimate as well as legitimate enterprises. It concluded that illegitimate enterprises were covered, noting that although the main aim of the legislation was to Prevent the infiltration of criminal elements into legitimate businesses, the statutory language was not so limited. 452 U.S. at 580, 101 S. Ct. at 2527, 69 L. Ed. 2d at 253. The Court defined "an enterprise" as "a group of persons associated together for a common purpose of engaging in a course of conduct," and held that an enterprise is established by "evidence of an ongoing organization, formal or informal, and by evidence that the various associates function as a continuing unit." Id. at 583, 101 S. Ct. 2528-29, 69 L. Ed. 2d at 254.
In addition to interpreting "enterprise," the Supreme Court in Turkette stated that prosecutors bear the burden of proof under RICO to show the existence of both an enterprise and a pattern of racketeering activity; although the proof used to establish the separate elements may "coalesce," proof of one would not necessarily establish the other. Id. at 583, 101 S. Ct. at 2528-29, 69 L. Ed. 2d at 254-55. The Court thus took care to distinguish the "enterprise" element from the "pattern of racketeering activity" element, stating that the enterprise "is an entity separate and apart from the pattern of activity in which it engages." Id. at 583, 101 S. Ct. at 2525, 69 L. Ed. 2d at 255.
After Turkette, federal courts struggled to apply its rule to particular cases. The Third Circuit Court of Appeals in United States v. Riccobene, 709 F.2d 214, 221-24, cert. denied, 464 U.S. 849, 104 S. Ct. 157, 78 L. Ed. 2d 145 (1983), determined that according to Turkette, an enterprise had three components: an ongoing organization, continuing membership, and a separateness, and that the establishment of an "enterprise" required proof of "some sort of structure." Id. at 222. The Eighth Circuit Court of Appeals concluded that the "enterprise" element required proof of an "ascertainable structure" distinct from such organization as is necessary to the coordinated act of racketeering. United States v. Bledsoe, 674 F.2d 647, 665, cert. denied, 459 U.S. 1040, 103 S. Ct. 456, 74 L. Ed. 2d 608 (1982). In Bledsoe, the court explained that proof of an "ascertainable structure" is essential to avoid collapsing the two components of a RICO crime -- the involvement in a distinct enterprise and in a pattern of racketeering activity -- into a single component. 674 F.2d at 663-65.
Several courts have rejected the view that a distinct "ascertainable structure" is a necessary component of a RICO enterprise. Those courts have applied Turkette literally, requiring proof only of an ongoing informal organization. See, e.g., United States v. Cagnina, 697 F.2d 915, 921 (11th Cir.), cert. denied, 464 U.S. 856, 104 S. Ct. 175,78 L. Ed. 2d 157 (1983); United States v. Pelullo, 964 F.2d 193, 212 (3rd Cir. 1992); United States v. Perholtz, 268 U.S. App. D.C. 347, 842 F.2d 343, 362-63 (D.C.Cir.), cert. denied, 488 U.S. 821, 109 S. Ct. 65, 102 L. Ed. 2d 42 (1988); United States v. Mazzei, 700 F.2d 85, 89-90 (2nd Cir.), cert. denied, 461 U.S. 945, 103 S. Ct. 2124, 77 L. Ed. 2d 1304 (1983). In United States v. Bagaric, 706 F.2d 42, 56, cert. denied., 464 U.S. 840, 104 S. Ct. 134, 78 L. Ed. 2d 128 (1983), the Second Circuit Court of Appeals took perhaps the broadest approach in stating that "any associative group" may be characterized "in terms of what it does, rather than by abstract analysis of its structure." (emphasis in original). The Eleventh Circuit Court of Appeals observed in United States v. Weinstein, 762 F.2d 1522, 1537 (1985), cert. denied, 475 U.S. 1110, 106 S. Ct. 1519, 89 L. Ed. 2d 917 (1986), that "the definitive factor in determining the existence of a RICO enterprise [is] an association of individuals, however loose or informal, which furnishes a vehicle for the commission of two or more predicate crimes." See Vitter, (supra) , 62 Tul. L. Rev. at 1438-40 (noting that distinctness of enterprise is evidenced by many traits, including "a decision-making structure" and "an advanced division of labor").
Over thirty states have some form of anti-racketeering act, all of which are modeled generally on federal RICO. Georgia, New Mexico, and Oregon have rejected the position that an ascertainable structure distinct from the pattern of racketeering activity is required to prove an enterprise. See Martin v. State, 189 Ga. App. 483, 376 S.E.2d 888, 892-93 (Ga. App. 1988); State v. Hughes, 108 N.M. 143, 767 P.2d 382, 387-88 (N.M. App. 1988); State v. Cheek, 100 Ore. App. 501, 786 P.2d 1305, 1307-08 (Or. App. 1990). In contrast, Florida, and New York (whose statute is unique in that it explicitly requires an enterprise to have "an ascertainable structure distinct from a pattern of racketeering activity," N.Y. Penal Law § 460.10-3 (McKinney 1989)) insist that the State establish that the alleged enterprise had a structure and that it was separate from the pattern of racketeering activity. See Boyd v. State, 578 So.2d 718, 721-22 (Fla. App. 1991), review den. 581 So. 2d 718; People v. Wakefield Fin. Corp., 155 Misc. 2d 775, 590 N.Y.S.2d 382, 388-89 (Sup. Ct. 1992). Minnesota requires a showing "that there is an organizational set-up, whether formal or informal, that not only exists to commit the predicate acts but also does more, such as coordinating those acts into an overall pattern of criminal ...