Superior Court May Be Viewed as ‘Enterprise’ for RICO Purposes

Thursday, September 26, 2019

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Ninth Circuit:

Superior Court May Be Viewed as ‘Enterprise’ for RICO Purposes

Opinion Affirms Conviction of Man Who Participated in Orange County Ticket-Fixing Scheme

By a MetNews Staff Writer

The Ninth U.S. Circuit Court of Appeals, in affirming the conviction of a man under the Racketeer Influenced and Corrupt Organizations Act for his part in an operation involving ticket-fixing and manipulation of the outcome in drunk driving cases, has held that the government adequately pled that the Orange Superior Court is an “enterprise” which affects interstate commerce.

Among defendant Javed Asefi’s contentions on appeal from his convictions of four offenses was that District Court Judge Josephine L. Staton of the Central District of California erred in denying his motion to dismiss Count One which alleged participation in a RICO conspiracy. In addition to his conviction on that count, a jury found him guilty of bribery, making false statements in a citizenship application, and criminal contempt.

The RICO charge stemmed from his collecting bribes from motorists with traffic tickets, which he passed on to a middle-man, who in turn paid them to a court deputy clerk, Jose Lopez Jr. Through entering false data into the court computer system, Lopez “improperly resolved approximately 1,034 cases, including 69 misdemeanor driving under the influence cases, 160 other misdemeanor cases and 805 traffic-related infraction cases,” according to his admission in pleading guilty to his major role in the conspiracy.

Two-Year Sentence

Lopez drew a prison term of 11 years and three months. Asefi, a minor-player who had contact with 15 motorists, drew a two-year prison sentence, and is presently free, on bond.

In denying Asefi’s motion to dismiss the RICO count, Staton on March 9, 2017, noted that “the Ninth Circuit has never directly addressed the question” of whether a court can be an “enterprise,” but said that other circuits have found that it can be. She drew attention to the Ninth Circuit’s 1999 decision in United States v. Frega in which the court affirmed convictions based on the assumption, unchallenged by the appellants, that the San Diego Superior Court is an enterprise.

(In that case, the court upheld convictions under RICO of attorney Patrick Frega, then on suspension by the State Bar and who resigned in 2001 with charges pending, and former San Diego Superior Court Judges James Malkus and Dennis Adams. Frega provided gifts to Malkus, Adams and then-Judge Michael Greer, over the years, valued at more than $100,000 in return for favorable treatment in court cases.)

District Court’s Ruling

Staton wrote that the RICO statute defining “enterprise” says that it “includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity.” She reasoned:

“[B]y its terms, the statute encompasses ‘any...legal entity,’ a phrase that ‘does not exclude’ state courts.”

The judge added:

“[W]hile the Act’s legislative history primarily reveals Congress’s concerns with organized crime corrupting legitimate private businesses, nothing suggests that Congress intended to confine the Act’s scope to the private sector….In sum, the Government may properly allege that the Orange Comity Superior Court is a RICO enterprise.”

Ninth Circuit’s Affirmance

The Ninth Circuit affirmed Tuesday in a memorandum opinion. Judges on the panel were Kim Wardlaw, Mark J. Bennett, and Eric D. Miller.

The opinion says:

“Asefi argues that the indictment is insufficient for failing to allege that the activities of the RICO enterprise (here, the Orange County Superior Court) ‘substantially affect’ interstate commerce. This is incorrect.”

It quotes Frega—which quotes a 1997 Ninth Circuit opinion—as saying:

“Because RICO is aimed at activities which, in the aggregate, substantially affect interstate commerce, ‘all that is required to establish federal jurisdiction in a RICO prosecution is a showing that the individual predicate racketeering acts have a de minimis impact on interstate commerce.’ ”

Tuesday’s opinion continues:

“The indictment alleged that the Superior Court, which ‘constituted an enterprise as that term is defined’ by RICO, ‘was engaged in, and its activities affected, interstate commerce.’ That allegation, which tracks the jurisdictional language of the RICO statute…, and the truth of which we ‘must accept,’…satisfies the government’s pleading burden, the RICO statute, and the Commerce Clause. The district court did not err in failing to dismiss Count 1.”

Oral Argument

The opinion does not discuss the point raised at oral argument in Pasadena on Sept. 10 by Asefi’s appointed counsel, Timothy A. Scott, that the jury was erroneously instructed that, under RICO, an enterprise need have only a minimal impact on interstate commerce and that the individual acts need have none.

He pointed out that the U.S. Supreme Court “has never said that a de minimis is sufficient in a RICO case.”

Scott urged that the Ninth Circuit’s decision in United States v. Juvenile Male—the 1997 case quoted in Frega—be confined to the facts, despite its broad wording, because there, the enterprise was a street gang which did have substantial contact with interstate commerce, utilizing weapons manufactured out-of-state, and each individual gang member did have minimal contacts.

Bennett recited that the indictment alleges that the Orange Superior Court has contracts with out-of-state vendors and receives federal program benefits. He added that while it is not alleged in the indictment, the court handles cases involving driving, and vehicles are apt to be manufactured outside California.

He asserted that “what was alleged and what was proved” were more than adequate to show that court operations affect interstate commerce.

The opinion rejects each of the additional contentions by the appelant.

The case is United States v. Asefi, 18-50070.