Defendants Engaged in a Pattern of Racketeering Activity in Furtherance of the Scheme to Defraud

Defendants Engaged in a Pattern of Racketeering Activity in Furtherance of the Scheme to Defraud

Each Defendant Committed at Least Two Racketeering Acts, the Last One of Which Occurred Within Ten Years from the Commission of the Prior Racketeering Act

¶To establish the commission of a pattern of racketeering activity,¹⁸¹⁸ Defendants assert that the statements of their C.E.O.s before the Waxman Subcommittee in 1994 constitutes petitioning activity protected from any imposition of liability under the Noerr-Pennington doctrine. See, Eastern R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961) and United Mine Workers v. Pennington, 381 U.S. 657 (1965). This legal issue is addressed fully in the Conclusions of Law. The facts, as recounted herein, speak for themselves. -637-Show full note U.S.C. §§ 1961(5) and 1962(c) require that each defendant commit at least two acts of racketeering, "the last of which occurred within ten years . . . after the commission of a prior" racketeering act. H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229, 237 (1989). Because each Defendant has committed two or more Racketeering Acts within ten years of each other, that standard is clearly met in this case. See generally Findings of Fact.

¶Defendants assert, without citing any authority or offering any analysis, that the United States must prove that each Defendant committed two or more racketeering acts within ten years of each other as to each aspect of the over-arching scheme to defraud. Defs.' Corrected Trial Brief at 114. Defendants are wrong. The requirement of two racketeering acts pertains to the pattern of racketeering activity, which in this case is the overall scheme to defraud itself, and not the hundreds of individual discrete predicate activities that comprise it.¹⁸¹⁸ Defendants assert that the statements of their C.E.O.s before the Waxman Subcommittee in 1994 constitutes petitioning activity protected from any imposition of liability under the Noerr-Pennington doctrine. See, Eastern R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961) and United Mine Workers v. Pennington, 381 U.S. 657 (1965). This legal issue is addressed fully in the Conclusions of Law. The facts, as recounted herein, speak for themselves. -637-Show full note U.S.C. § 1961(5) establishes that a "pattern of racketeering activity requires at least two acts of racketeering activity, one of which occurred after October 15, 1970 (the date on which the

¶(...continued) required in cases involving alleged intentionally fraudulent statements.

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¶RICO statute was enacted) and the last of which occurred within ten years (excluding any period of imprisonment) after the commission of a prior act of racketeering activity." The Supreme Court has concluded that in light of the "very relaxed limits of the pattern concept fixed in § 1961(5) . . . Congress intended to take a flexible approach, and envisaged that a pattern might be demonstrated by reference to a range of different ordering principles or relationships between predicates," H.J., Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 239 (1989); see also Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 486-490 (1985). Furthermore, the Court explained that "RICO's legislative history reveals Congress' intent that to prove a pattern of racketeering activity a plaintiff or prosecutor must show that the racketeering predicates are related, and that they amount to or pose a threat of continued criminality." Id.

¶The Supreme Court has explained that "criminal conduct forms a pattern if it embraces criminal acts that have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events. . . . We find no support . . . that predicate acts of racketeering may form a pattern only when they are part of separate illegal schemes." H.J., Inc. at 236. Under this reasoning, it is clear that the predicate acts of racketeering need not relate to separate illegal schemes, nor must they relate to each aspect of the over-arching scheme to defraud. Rather, the evidence cited in the Findings of Fact demonstrates that each Defendant has therefore committed more than two Racketeering Acts with respect to the Enterprise's overall scheme to defraud.

The Racketeering Acts Are Related and Continuous

¶The Supreme Court has stated that "to prove a pattern of racketeering activity a plaintiff or prosecutor must show that the racketeering predicates are related," and that they either extended over

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¶"a substantial period of time," "or pose a threat of continued criminal activity." H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229, 239, 242 (1989). This requirement is commonly referred to as the "continuity plus relationship test." Defendants' activities easily meet the test for "a pattern of racketeering activity" articulated by the Supreme Court.

The Racketeering Acts Are Related

¶As already noted, the requisite relationship is established when the racketeering acts "have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events." Id. at 240. "Congress intended to take a flexible approach, and envisaged that a pattern might be demonstrated by reference to a range of different ordering principles or relationships between predicates, within the expansive bounds set." Id. at 238.

¶The federal courts of appeals have repeatedly held that the predicate racketeering acts under RICO need not be similar or directly related to each other. Rather, it is sufficient that the racketeering acts be related in some way to the affairs of the Enterprise, including furthering its goals or benefitting it in some way. See, e.g., United States v. Polanco, 145 F.3d 536, 541 (2d Cir. 1998); United States v. White, 116 F.3d 903, 925 n.7 (D.C. Cir. 1997) (stating in jury instructions that in order to show a pattern of racketeering activity, the government must prove that "the racketeering acts had the same or similar purposes, results, participants, victims or methods of commission or were otherwise interrelated by distinguishing characteristics and were not isolated events"); United States v. Eufrasio, 935 F.2d 553, 566 (3d Cir. 1991); United States v. Gonzalez, 921 F.2d 1530, 1540 (11th Cir. 1991); United States v. Angiulo, 897 F.2d 1169, 1180 (1st Cir. 1990); United States v. Indelicato, 865 F.2d 1370, 1382-84 (2d Cir. 1989) (en banc); United States v. Qaoud, 777 F.2d 1105,

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¶1115 (6th Cir. 1985); United States v. Provenzano, 688 F.2d 194, 200 (3d Cir. 1982); United States v. Lee Stoller Enter., Inc., 652 F.2d 1313, 1319 (7th Cir. 1981); United States v. Elliott, 571 F.2d 880, 899 (5th Cir. 1978).

¶Defendants' Racketeering Acts are related. While Defendants argue that a "multiplicity of mailings does not necessarily translate into a 'pattern' of racketeering activity," Lipin Enters., Inc. v. Lee, 803 F.2d 322, 325 (7th Cir. 1986) (Cudahy, J., concurring), the evidence in this case demonstrates far more than a mere multiplicity of mailings. All the Racketeering Acts have the same or similar purposes and methods of commission: they each involve mailings or wire transmissions by Defendants to carry out the Enterprise's overarching scheme to defraud consumers and potential consumers of cigarettes. Moreover, all the predicate Racketeering Acts furthered the goals and purposes of the Enterprise to sustain and maximize profits, to avoid costly liability judgments, and to frustrate attempts to make smoking socially unacceptable.

The Racketeering Acts Have Been Continuous

¶Many forms of proof may establish the required "continuity." H.J. Inc., 492 U.S. at 240-43. By way of illustration, the Supreme Court approved several alternative methods for meeting the "continuity" requirement, stating:

[1] A party alleging a RICO violation may demonstrate continuity over a closed period by proving a series of related predicates extending over a substantial period of time. ...

[2] A RICO pattern may surely be established if the related predicates themselves involve a distinct threat of long-term racketeering activity, either implicit or explicit.

¶...

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[3] The continuity requirement is likewise satisfied where it is shown that the predicates are a regular way of conducting defendant's ongoing legitimate business (in the sense that it is not a business that exists for criminal purposes), or of conducting or participating in an ongoing and legitimate RICO "enterprise."

¶Id. at 242-243. Following H.J. Inc., our Circuit has also adopted a flexible approach to determine whether "continuity" has been proven. United States v. Richardson, 167 F.3d 621, 626 (D.C. Cir. 1999).

¶In addition, as the Supreme Court, the D.C. Circuit and other courts have ruled, the requisite continuity may be shown by the overall nature of the Enterprise and its members, considered in their entirety, including uncharged unlawful activities. H.J. Inc., 492 U.S. at 242-43; Richardson, 167 F.3d at 626.

¶Here, Defendants' 145 racketeering acts occurred over a period of 45 years, which surely constitutes a "substantial period" of time. Moreover, these racketeering acts "are a regular way of conducting defendant's ongoing legitimate business," H.J. Inc., 492 U.S. at 243. Because Defendants are in a position to continue their fraudulent activity, "the racketeering acts themselves include a specific threat of repetition extending indefinitely into the future." Id. at 242. Thus, the requisite pattern of racketeering activity has been established.