racketeering

Anza v. Idea Steel Supply Corp.

 

Ideal Steel Supply Corporation and National Steel Supply Inc. were competitors for many years in the New York area, with facilities in Queens and later the Bronx. They each sold steel mill products and other hardware, and the owners were even related by marriage. As Ideal Steel’s sales in the Bronx dropped and National Steel’s increased, despite both companies charging the same price for their product, Ideal Steel became suspicious. In particular, Ideal Steel was concerned about National Steel’s “cash, no tax” policy, in which customers of National Steel that paid with cash did not have to pay the sales tax required by New York State. Ideal Steel filed a civil suit in federal district court alleging that the “cash, no tax” policy constituted racketeering under the Racketeer Influenced and Corrupt Organizations Act, in that the failure to charge state sales tax and the filing of false sales tax returns was a pattern of mail and wire fraud intended to give National Steel an unfair competitive advantage over Ideal Steel. The district court dismissed Ideal Steel’s claim, ruling that Ideal Steel failed to allege that there was a sufficient connection between National Steel’s alleged illegal conduct and the harm to its business or lost profits. The Court of Appeals for the Second Circuit reversed and ordered that the suit should proceed, ruling that it was sufficient for Ideal Steel to prove that New York State relied on National Steel’s fraudulent conduct, which allowed the scheme to continue, and ultimately led to the harms alleged. The United States Supreme Court must now examine the Racketeer Influenced and Corrupt Organizations Act and determine whether a company such as Ideal Steel is injured by such violations where the company is not directly defrauded and did not rely on the illegal acts.  

The Alleged Scheme

Respondent Ideal Steel Supply Corporation (“Ideal Steel”) and Petitioner Anza’s company, National Steel Supply Inc., are direct competitors in the business of selling steel mill products and other hardware in the Bronx and Queens, New York. Brief for Respondent at 3.

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Boyle v. United States

Issues

Does the United States need to prove the existence of a group with an identifiable structure, that goes beyond the racketeering activities at issue, in order to prove an association-in-fact enterprise under the RICO Act?

 

A jury convicted Edmund Boyle of racketeering and racketeering conspiracy under the Racketeer Influenced and Corrupt Organizations Act ("RICO") and sentenced him to 151 months in prison for his participation in a string of bank robberies. Boyle appealed his conviction to the Second Circuit, arguing that the United States misinterpreted the scope of an "enterprise" under RICO. Boyle argued that RICO did not apply because the United States could not prove that the group of bank robbers was an enterprise if it could not prove the group had a formal, ascertainable structure. The United States argued that the individuals were an enterprise and that they did not need to prove a formal structure existed under RICO. The Second Circuit affirmed the conviction. The Supreme Court granted Boyle's petition to determine a three-way circuit split over what constitutes an enterprise under the RICO statute. The outcome of this case will affect the scope of the RICO Act and will impact the ability of law enforcement to prosecute individuals under the RICO Act.

 

    Questions as Framed for the Court by the Parties

    Does proof of an association-in-fact enterprise under the RICO statute, 18 U.S.C. §§ 1962(c)-(d), require at least some showing of an ascertainable structure beyond that inherent in the pattern of racketeering activity in which it engages an exceptionally important question in the administration of federal justice, civil and criminal, that has spawned a three-way circuit split?

    Indictment and Trial

    In 2003, a New York grand jury indicted Edmund Boyle and eight other men on Racketeering Influenced and Corrupt Organizations ("RICO") Act conspiracy charges, claiming that they all participated in a series of bank robberies as members of an organization called the "Night Drop Crew." See Brief for Petitioner Edmund Boyle at 5-6,

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    RJR Nabisco v. European Community

    Issues

    Does RICO, the Racketeer Influenced and Corrupt Organizations Act, apply outside the United States?

     

    The European Community sued RJR Nabisco, a cigarette manufacturer, under the Racketeer Influenced and Corrupt Organizations (“RICO”) Act, 18 U.S.C. § 1961 et seq. RICO imposes civil and criminal penalties on racketeering activity. The European Community alleges that RJR Nabisco ran an international money laundering operation, which occurred abroad. This case presents the Supreme Court with the opportunity to determine the jurisdictional limits of RICO. RJR Nabisco maintains that RICO should not apply extraterritorially. The European Community counters that Congress clearly indicated that RICO’s reach could extend extraterritorially when the underlying offense is extraterritorial. The Court’s resolution of this case may alter the jurisdictional status of RICO and will affect business interests on both sides of the Atlantic.

    Questions as Framed for the Court by the Parties

    Whether, or to what extent, the Racketeer Influenced and Corrupt Organizations Act (“RICO”) applies extraterritorially.

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