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UNITED STATES v. CASTELLANO

November 11, 1975

UNITED STATES OF AMERICA
v.
PAUL CASTELLANO, a/k/a "Big Paul", PAUL F. CASTELLANO, a/k/a "Little Paul", ANGELO SCARPULLA, FRANK GUGLIELMINI, JOSEPH CASTELLANO, FRANK GRANATO, ROBERT HERKO, VICTOR LI PARI and ROBERT DE PRIZIO, Defendants



The opinion of the court was delivered by: BARTELS

BARTELS, District Judge.

 This fourteen-count indictment charges in count one all nine defendants, Paul Castellano, Paul F. Castellano, Angelo Scarpulla, Frank Guglielmini, Joseph Castellano, Frank Granato, Robert Herko, Victor Li Pari and Robert De Prizio, with conspiracy to violate 18 U.S.C. § 1962(c) in violation of 18 U.S.C. § 1962(d), and charges in count two defendants Paul Castellano, Paul F. Castellano, Scarpulla and Joseph Castellano with actual violation of § 1962(c). The charges in both counts are predicated upon an alleged association of the defendants with a group of individuals, including the defendants, engaged in loaning money at usurious interest rates and collecting unlawful debts, the activities of which affected interstate commerce.

 All defendants have joined in a motion (1) to dismiss counts one and two of the indictment on the ground that the acts alleged therein do not constitute a violation of 18 U.S.C. § 1962, or, in the alternative, that if the statute is applicable to the facts alleged in the indictment, § 1962 is unconstitutional since it fails to give fair notice of prohibited conduct, and (2) for severance of counts three through fourteen on the ground that joinder is prejudicial.

 I

 Defendants contend that 18 U.S.C. § 1962(c) is specifically directed to the infiltration of racketeers into a legitimate enterprise and not an illegitimate one such as extending credit at usurious interest rates as charged in the indictment, and hence is not applicable to the facts alleged in the indictment. In support of their position defendants cite numerous portions of House and Senate Committee reports and cases which speak in terms of infiltration of a legitimate business. See e.g., 1970 U.S. Code Cong. & Adm. News 4033; United States v. Amato, 367 F. Supp. 547, 549 (S.D.N.Y. 1973). In opposition the Government contends that the plain meaning of the statute includes illegitimate as well as legitimate enterprises.

 Section 1962(c) of Title 18 of the United States Code was enacted as part of the Organized Crime Control Act of 1970, P.L. 91-452, 84 Stat. 922, 1970 U.S. Code Cong. & Adm. News 1073, and provides that:

 
"It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt."

 The basic purpose of the Organized Crime Control Act of 1970 was "to seek the eradication of organized crime in the United States by strengthening the legal tools in the evidence-gathering process, by establishing new penal prohibitions, and by providing enhanced sanctions and new remedies to deal with the unlawful activities of those engaged in organized crime." 1970 U.S. Code Cong. & Adm. News 1073. See also, Iannelli v. United States, 420 U.S. 770, 95 S. Ct. 1284, 1294, 43 L. Ed. 2d 616 (1975). In addition to prohibiting the conduct or participation in an enterprise's affairs as provided in § 1962(c), Congress proscribed the use of money derived from racketeering activities for the purpose of acquiring an interest or control in an enterprise [18 U.S.C. § 1962(a)], the acquiring of an interest or control in an enterprise through a pattern of racketeering or through the collection of an unlawful debt [18 U.S.C. § 1962(b)], and conspiracy to commit any of the above [18 U.S.C. § 1962(d)].

 While the legislative history demonstrates that one of the targets of Congress in enacting this law was the infiltration of legitimate business by racketeers, it was, as indicated above, not its only concern. Because Congress intended to deal generally with organized crime's influence on the American economy, it gave a very broad meaning to the term "enterprise," which it defined to "include any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity." 18 U.S.C. § 1961(4). United States v. Parness, 503 F.2d 430, 439 (2d Cir. 1974). In reality, this issue has been decided by authorities which have held that the term is not limited to domestic corporations and encompasses illegitimate as well as legitimate enterprises or business. United States v. Parness, supra; United States v. Cappetto, 502 F.2d 1351 (7th Cir. 1974). In the latter case the court found § 1962 to be applicable to the gaining control of an illegal gambling enterprise in the following language:

 
"There is nothing in the language of subsection (b) or (c) or in the definition section of the Act, Section 1961, to suggest that the enterprise must be a legitimate one." Id. at 1358.

 Accordingly, we conclude that the enterprise need not be a legitimate one to fall within the ambit of § 1962(c).

 Nor do we find any merit in defendants' argument that the statute, as construed above, is unconstitutionally vague, in that it does not give adequate and fair warning that illegitimate as well as legitimate enterprises are covered by it. The test of constitutionality for vagueness is not whether there are marginal cases in which its clarity may be in doubt but whether it conveys an adequate warning in a specific situation. Williams v. United States, 341 U.S. 97, 104, 95 L. Ed. 774, 71 S. Ct. 576 (1951); United States v. Petrillo, 332 U.S. 1, 91 L. Ed. 1877, 67 S. Ct. 1538 (1947); United States v. Parness, supra, at 442. It is clear to us that the statute's language is not vague in including not only legitimate business but also illegitimate business. United States v. Cappetto, supra.

 II

 Defendants also move, pursuant to Rule 14 of the Federal Rules of Criminal Procedure, for severance of counts three through fourteen. The indictment charges Paul Castellano (counts 3 through 6), Paul F. Castellano (counts 7 and 8), and Scarpulla (counts 9 and 10) with income tax fraud. In addition, Paul F. Castellano is charged in count eleven with obstruction of justice by attempting to influence a witness before the grand jury, and defendants Herko (count 12), Granato (count 13) and Li Pari (count 14) are charged with perjury before the grand jury. The disposition of this motion is within the discretion of the trial court, to be determined upon a balancing of interests to avoid multiple litigation on the one hand, and to afford the defendants a fair trial on the other hand. Schaffer v. United States, 362 U.S. 511, 4 L. Ed. 2d 921, 80 S. Ct. 945, rehearing denied, 363 U.S. 858, 4 L. Ed. 2d 1739, 80 S. Ct. 1605 2 (1960); United ...


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