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Date: 10-25-2021
Case Style:
United States of America v. MICHAEL KENNETH RICH, et al.
Case Number: 18-2268
Judge: Richard Allen Griffin
Court: UNITED STATES COURT OF APPEALS
Plaintiff's Attorney: Sheldon
Light, UNITED STATES ATTORNEY’S OFFICE
Defendant's Attorney:
Description:
Cincinnati, Ohio- Criminal defense lawyers represented defendants charged with their role in a RICO enterprise that trafficked large quantities of drugs (namely methamphetamine) and engaged in numerous other illegal acts (like violent crimes, illicit gambling, thefts, and obstruction of justice) charges.
The substantive RICO offense, 18 U.S.C. § 1962(c), makes it “unlawful for any person
employed by or associated with any enterprise engaged in . . . 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.” Section 1962(d) also renders it “unlawful for any person to
conspire to violate any of the provisions” of § 1962, including § 1962(c). Defendants’ juryinstruction challenge here lies in the interplay between these two provisions.
Specifically, defendants argue that the district court’s instructions were legally incorrect
because it added future-tense language into each element of the offense, as follows:
[T]o convict a defendant on the RICO conspiracy offense based on an agreement
to violate . . . 1962(c) . . . the Government must prove the following five elements
beyond a reasonable doubt:
One, the existence of an enterprise or that an enterprise would exist.
Two, that the enterprise was or would be engaged in, or its activities affected or
would affect interstate commerce.
Three, a conspirator was or would be employed by or associated with the
enterprise.
Four, a conspirator did or would conduct or would participate in, directly or
indirectly, the conduct of the affairs of the enterprise.
And five, a conspirator did or would knowingly participate in the conduct of the
affairs of the enterprise through a pattern of racketeering activity as described in
the indictment; that is, a conspirator did or would commit at least two acts of
racketeering activity.
If you find from your consideration of the evidence that each of these elements
has been proven beyond a reasonable doubt as to a particular defendant, then you
should find that defendant guilty on Count 1.
(Emphasis added). Based on these instructions, defendants claim that the jury was erroneously
“instructed that none of the elements of a RICO offense ha[d] to exist, at any time” for a
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conviction. On de novo review, United States v. Pritchard, 964 F.3d 513, 522 (6th Cir. 2020),
we disagree.
A.
We begin with United States v. Salinas, 522 U.S. 52 (1997). The issue before the
Supreme Court in that matter was similar—whether § 1962(d) applied to a defendant who had
participated in a bribery scheme but had not agreed to personally commit two of the predicate
acts that RICO forbids. Id. at 54. In a unanimous decision, the Court rejected the argument that
§ 1962(d) required a defendant to agree to commit two predicate acts and instead applied wellestablished principles of conspiracy law to conclude that § 1962(d) was satisfied where “[a]
conspirator . . . intend[ed] to further an endeavor which, if completed, would satisfy all of the
elements of a substantive criminal offense.” Id. at 65. Accordingly, while a defendant must
“adopt the goal of furthering or facilitating the criminal endeavor,” he could do so “in any
number of ways short of agreeing to undertake all of the acts necessary for the crime’s
completion.” Id. Therefore, even though Salinas did not commit acts of racketeering himself, he
“knew about and agreed to facilitate the scheme.” Id. at 66. This, the Court said, was “sufficient
to support a conviction under § 1962(d).” Id.
While Salinas did not decide the precise issue before us, several circuits have considered
similar challenges to the one we address now in light of Salinas—namely, whether the
government is required to prove the existence of the enterprise, or whether an agreement to
create a racketeering enterprise suffices. See United States v. Harris, 695 F.3d 1125, 1133 (10th
Cir. 2012); United States v. Applins, 637 F.3d 59, 73–74 (2d Cir. 2011); United States v.
Fernandez, 388 F.3d 1199, 1223 n.13 (9th Cir. 2004). The instructions given by the district
court here closely track the instructions at issue in Applins. See 637 F.3d at 72. In that matter,
the Second Circuit determined that the jury instructions “properly allowed for conviction upon
proof of an agreement to form an enterprise.” Id.; see also id. at 73–75. The Tenth Circuit’s
decision in Harris is in accord:
[Salinas’s] discussion of the difference between a § 1962(c) violation and a
§ 1962(d) violation leads us, like the Second Circuit, to conclude that just as the
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Government need not prove that a defendant personally committed or agreed to
commit the requisite predicate acts to be guilty of § 1962(d) conspiracy, neither
must the Government prove that the alleged enterprise actually existed.
695 F.3d at 1133.
We agree with the logic of our sister circuits. Section 1962(d) is a conspiracy offense,
which as Salinas reminds us, criminalizes an agreement rather than any substantive criminal
offense. In other words, an agreement to associate with and participate in a yet-to-be-formed
racketeering enterprise that would affect interstate commerce constitutes a completed offense
under § 1962(d). This is because an individual can “intend to further an endeavor which, if
completed, would satisfy all elements of a [RICO offense],” Salinas, 522 U.S. at 65, even if the
RICO enterprise is not yet formed. We heed the Supreme Court’s instruction today.
The dissent comes to a contrary conclusion. However, it offers no rejoinder to our
discussion of Salinas, which fuels our analysis. Nor does it offer any response to the
well-reasoned decisions of our sister circuits. Further, the primary case it cites, Boyle v. United
States, dealt not with whether the government must prove the existence of an enterprise to
establish a violation of § 1962(d), but instead with the proper definition of an enterprise. See
556 U.S. 938, 945 (2009) (“[T]he specific question on which we granted certiorari is whether an
association-in-fact enterprise must have ‘an ascertainable structure beyond that inherent in the
pattern of racketeering activity in which it engages?’”). Thus, we are puzzled by the dissent’s
reliance on Boyle. It is of no consequence here that the government must prove the existence of
an enterprise to gain a conviction under § 1962(c), and we have no quarrel with Boyle’s
conclusion to that effect. See id. at 947 & at n.4.
The dissent is also incorrect that the existence of an enterprise is the only thing separating
§ 1962(d) from other statutes criminalizing other conspiracies. Our first holding today is that to
convict a defendant under § 1962(d), the government may prove an agreement to form an
enterprise (rather than an existing enterprise) so long as the agreement, if completed, would
satisfy all the elements of § 1962(c). Boyle tells us that RICO enterprises have three
characteristics. 556 U.S. at 946 (“[A]n association-in-fact enterprise must have at least three
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structural features: a purpose, relationships among those associated with the enterprise, and
longevity sufficient to permit these associates to pursue the enterprise’s purpose.”). No such
thing is required by 21 U.S.C. §§ 841, 846. See, e.g., United States v. Wheaton, 517 F.3d 350,
363–64 (6th Cir. 2008) (“The elements of a drug conspiracy are (1) an agreement by two or more
persons to violate the drug laws, (2) knowledge and intent to join in the conspiracy, and
(3) participation in the conspiracy.” (citation omitted)). And under 18 U.S.C. § 371,
“a conspiracy is an inchoate crime that may be completed in the brief period needed for the
formation of the agreement and the commission of a single overt act in furtherance of the
conspiracy.” Boyle, 556 U.S. at 950. Section 1962(d), by contrast, has “no requirement” of an
overt act, and “is even more comprehensive” than § 371. Salinas, 522 U.S. at 63 (emphasis
added). Thus, the dissent incorrectly posits that a preexisting enterprise is necessary to separate
these conspiracy offenses. It is not.
Finally, we reject the dissent’s assertion that the government “suggeste[d] that it needed
to prove that defendants agreed to join an existing conspiracy in its brief[.]” It did no such thing.
The quoted language from the government’s brief addresses an evidentiary challenge mounted
by McKeoun, and not any challenge to the elements of the offense as outlined in the jury
instructions. As discussed in more detail below, we must take care not to conflate evidentiary
challenges to the sufficiency of the evidence with legal challenges to the elements of the offense.
The dissent makes that mistake.
B.
Next, our holding in United States v. Tocco, 200 F.3d 401 (6th Cir. 2000), is not to the
contrary, as defendants have suggested. In that case, we opined that “[p]roof of a charge under
§ 1962(d) requires proof that the association or enterprise existed and that the named defendants
were associated with and agreed to participate in the conduct of its affairs, which affect interstate
commerce, through a pattern of racketeering activity.” Id. at 424. Although this statement
appears at first glance to support defendants, a crucial distinction exists—there, we were
concerned with whether sufficient evidence supported the RICO-conspiracy conviction of
alleged Detroit mob boss Jack Tocco, and the parties specifically contested whether the
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government had proved the existence of an enterprise. Id. Thus, we did not contemplate the
possibility that the government need only prove an agreement to join in a yet-unformed
racketeering enterprise. It therefore does not force us to hold, erroneously, that the district
court’s jury instructions were incorrect.1
We find ourselves in good company in this regard. In both Applins and Harris, our sister
courts considered this same misconception as to the elements of § 1962(d). Applins recognized
that prior Second Circuit decisions suggested a RICO conspiracy conviction required proof of an
existing enterprise. 637 F.3d at 75 n.4. But it determined those cases did not control because the
government had “relied on evidence of the actual existence of an enterprise and pattern of
racketeering acts to prove the conspiracy,” and did not attempt to prove the conspiracy solely by
the existence of an agreement to form a racketeering enterprise. Id. Likewise in Harris, the
Tenth Circuit observed that one of its prior decisions suggested that a § 1962 conspiracy required
the government to establish the existence of an enterprise. 695 F.3d at 1132. But the Harris
court stressed that the defendant in the prior case “did not contend that existence of an enterprise
was not a necessary element of a 1962(d) violation” and had instead argued “only that the
evidence against him failed to establish the existence of an enterprise.” Id. Thus, the court
explained that its prior decision was “focused on what constituted an ‘enterprise’ under RICO,
and did not address the alternate possibility that the ‘existence of an enterprise’ might not in fact
be a necessary element at all.” Id. Accordingly, we hold that the district court correctly
1The same is true of United States v. Rios, 830 F.3d 403, 421 (6th Cir. 2016), and United States v.
Nicholson, 716 F. App’x 400, 405 (6th Cir. 2017). In Rios, we explained that gang-tattoo evidence was highly
relevant in a RICO conspiracy case because “the government was required to prove both the existence of a
racketeering enterprise and each defendant’s association with that enterprise.” But again, that case revolved around
the government’s proofs at trial—which were directed at proving the existence of the enterprise—and not any
challenge to the jury instructions. In Nicholson, we opined that “to sustain [§ 1962(d)] convictions, the government
must have shown that each defendant agreed (1) to associate with an enterprise that has activities affecting interstate
commerce; (2) to participate in the conduct of the enterprise’s affairs; and (3) that either he or another conspirator
would engage in a pattern of racketeering activity.” 716 F. App’x at 405. Our discussion likewise came in the
context of the sufficiency of the evidence; defendants “claim[ed] that the government failed to show at trial that
[their motorcycle club] is a [RICO] enterprise.” Id. Thus, the dispute was whether the club had “the required
purpose, relationships, and longevity to qualify as an enterprise,” and we did not consider whether a predicate
agreement to create such an enterprise would suffice. Id.
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instructed the jury to convict each defendant if it found that he joined an agreement that
encompassed a future violation of the substantive RICO offense.
II.
We also address whether a district court may apply a sentence enhancement for
maintaining “a premises for the purpose of manufacturing or distributing a controlled substance”
under U.S.S.G. § 2D1.1(b)(12) through the relevant conduct principles set forth in U.S.S.G.
§ 1B1.3(a)(1)(B). Here, it is undisputed that defendant Victor Castano did not personally
maintain a premises for manufacturing or distributing a controlled substance, but the district
court nonetheless applied a two-level enhancement under § 2D1.1(b)(12) based on his coconspirators’ conduct. As he did below, Castano contends that application of this enhancement
constituted an improper calculation of his Guidelines range. Because our review of this
procedural-reasonableness challenge only involves interpreting the Guidelines and applying
them to uncontested facts, our review is de novo. United States v. Paauwe, 968 F.3d 614, 617
(6th Cir. 2020).
Section 1B1.3(a)(1)(B) of the Guidelines provides for, in limited circumstances, sentence
enhancements based on the conduct of co-conspirators. “Unless otherwise specified,” it states,
the “specific offense characteristics . . . in Chapter Two . . . shall be determined on the basis of
. . . all acts or omissions of others that were—(i) within the scope of the jointly undertaken
criminal activity, (ii) in furtherance of that criminal activity, and (iii) reasonably foreseeable in
connection with that criminal activity[.]” Focusing on the introductory exception, Castano
contends that, because § 2D1.1(b)(12) says that the enhancement applies if “the defendant”
maintains a premises, the Guidelines have “otherwise specified” that it cannot apply through
jointly undertaken criminal activity under § 1B1.3(a)(1)(B). Caselaw from our circuit and the
Eleventh Circuit takes the contrary view, with which we agree.
In United States v. Holmes, the Eleventh Circuit addressed this question and concluded
that “[n]othing in § 2D1.1(b)(12) prohibits a sentencing court from imposing the premises
enhancement based on the jointly undertaken criminal activity of co-conspirators.” 767 F. App’x
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831, 839 (11th Cir. 2019). In so holding, Holmes differentiated among similar enhancements
where the Sentencing Commission had expressly made clear it was carving out the exception
Castano now desires. So, for example, it noted its prior holding in United States v. Cook,
181 F.3d 1232 (11th Cir. 1999), that § 3C1.2’s enhancement for recklessly creating “a substantial
risk of death or serious bodily injury to another person in the course of fleeing from a law
enforcement officer” could not be applied based on a co-conspirator’s conduct because that
enhancement’s application note states, “[u]nder this section, the defendant is accountable for his
own conduct and for conduct that he aided or abetted, counseled, commanded, induced,
procured, or willfully caused.” Id. at 1234 (quoting U.S.S.G. § 3C1.2 cmt. n.5). Holmes then
contrasted Cook with United States v. McClain, 252 F.3d 1279, 1288 (11th Cir. 2001), which
found relevant-conduct principles applicable to § 3B1.4’s enhancement for “if the defendant”
uses or attempts to use a minor to avoid detection or apprehension. Drawing a logical distinction
then, the Holmes court reasoned that enhancements directed at “the defendant” can be applied
via jointly undertaken criminal activity unless the Sentencing Commission “otherwise specified”
that it should not—for instance, in an application note. 767 F. App’x at 840.
This comports with our unpublished caselaw. In United States v. Patton, 9 F.3d 110,
1993 WL 432838 (6th Cir. Oct. 26, 1993) (unpublished table op.), we similarly considered
whether § 3C1.2 could be applied to co-conspirators who did not personally cause the substantial
risk of harm to another. Id. at *1 (quoting U.S.S.G. § 3C1.2). There, we held that the conduct of
a get-away driver could be “imputed” to the other defendants participating in a bank robbery
because it was reasonably foreseeable that the driver “would want to leave the scene quickly”
after the criminal activity was complete. Id. at *2. Implicit in this conclusion was an assumption
that the enhancement’s phrasing—“the defendant”—did not otherwise specify that the relevant
conduct provision was inapplicable.
We used the same logic more recently in United States v. Fritts to affirm the application
of a sentence enhancement for possessing a firearm in connection with another felony offense
under § 2K2.1(b)(6)—even though it was the defendant’s co-conspirator who had traded
oxycodone pills for a shotgun to trigger the enhancement. 557 F. App’x 476, 486 (6th Cir.
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2014). We explained that, “[b]ecause Fritts’s coconspirator brother obtained the shotgun in
exchange for drugs as part of the conspiracy,” Fritts could be “responsible for the transaction”
under § 1B1.3(a)(1)(B). Id. at 487. We were apparently unconcerned that the text of the
enhancement reads “If the defendant . . . used or possessed any firearm or ammunition in
connection with another felony offense . . . increase by 4 levels.” § 2K2.1(b)(6)(B) (emphasis
added). Thus, our caselaw, like the Eleventh Circuit’s, suggests that sentence enhancements that
are structured as conduct by “the defendant” may be applied to co-conspirators of jointly
undertaken criminal activity under § 1B1.3(a)(1)(B).
Pushing back on this conclusion, Castano urges us to instead follow United States v.
Miller, 698 F.3d 699, 706 (8th Cir. 2012). There, the Eighth Circuit “assumed”—but did not
decide—that § 2D1.1(b)(12) “requires proof that the specific defendant being sentenced
maintained the premises for the purpose of drug manufacture or distribution.” But there was no
dispute that the defendant maintained the premises; the issue on appeal was whether she
maintained the premises “for the purpose of” drug manufacture or distribution. Thus, the
language defendant relies on from Miller is dicta, and it does not aid us in assessing whether
§ 2D1.1(b)(12) falls within the general rule for relevant conduct under § 1B1.3(a)(1)(B).
At argument, Castano also directed us to United States v. Butler, 207 F.3d 839, 847–48
(6th Cir. 2000), which he said conflicts with the Eleventh Circuit’s opinion in Holmes.
However, we find Butler wholly inapplicable. There, the defendant partnered with a minor to
commit a bank robbery. The district court applied § 3B1.4 to enhance the defendant’s sentence
“on the grounds that he had encouraged” the minor to participate in the crime. Id. at 842. On
appeal, we concluded that the enhancement was improperly applied. Id. at 846–849. First, we
reminded district courts that they are to “treat the sentencing guidelines ‘as if they were a statute’
and follow ‘the clear, unambiguous language if there is no manifestation of a contrary intent.’”
Id. at 847 (citation omitted). Based on that directive, we concluded that the district court had
interpreted § 3B1.4 too broadly and “creat[ed], in effect a ‘strict liability’ enhancement” for any
defendant who participated in a crime with a minor. Id. at 848. Because our opinion does not
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mention § 1B1.3(a)(1)(B), it sheds no light on whether it reaches the premises enhancement at
issue here. It therefore cannot conflict with Holmes.
In short, we conclude that the only direct authority on the issue is Holmes, and we agree
with our sister circuit that nothing in § 2D.1(b)(12) “otherwise specifie[s]” that it cannot be
applied based on jointly undertaken criminal activity under § 1B1.3(a)(1)(B). Accordingly, the
district court correctly concluded that the premises enhancement could be applied to Castano
even though he did not personally maintain a premises for purposes of drug manufacturing or
distribution, and we affirm the application of that sentencing enhancement to him.
Outcome: For these reasons, and those set forth in our unpublished appendix to this opinion, we affirm defendants’ convictions and sentences.
Plaintiff's Experts:
Defendant's Experts:
Comments: