Tuesday, December 19th, 2006

Horizontal Relatedness for RICO Purposes May Be Proven by Evidence of Vertical Relatedness

United States v. Daidone, Docket No. 04-3784-cr (2d Cir. Dec. 15, 2006) (Newman, McLaughlin, Hall) (per curiam): This opinion does not appear to break new ground, but simply confirms that in a RICO prosecution, proof of “horizontal relatedness” between the alleged predicate acts — i.e., proof that the predicates are related to each other — may be satisfied by the same evidence used to prove “vertical relatedness” — i.e., evidence establishing that the predicates are related to the RICO enterprise. Daidone, a made guy in the Luchese family of LCN, complains on appeal that his RICO convictions under § 1962(c) & (d) must be vacated because the three predicate acts (two whackings and a long-term shylocking) “were committed years apart, by different people and for entirely different reasons,” and thus did not constitute a “pattern of racketeering activity” as required under RICO. He especially complains that the prosecution’s evidence showed, at best, that the predicates were linked to the RICO “enterprise,” i.e., the Luchese family, but did not demonstrate that the predicates were related to each other.

The Circuit rejects this argument and affirms Daidone’s conviction. It agrees, first, that under Circuit law, proof of “relatedness” among the predicate acts — derived from the statute’s reference to a “pattern of racketeering activity” — requires proof both that the acts are “related to each other (‘horizontal’ relatedness), and . . . related to the enterprise (‘vertical’ relatedness).” Op. 7 (quoting United States v. Minicone, 960 F.2d 1099, 1106 (2d Cir. 1992)); id. 8 (“To form a pattern of racketeering activity, predicate acts must be related to each other and to the enterprise.”). Second, vertical relatedness may be proven by evidence showing either that (1) “the defendant was enabled to commit the predicate offenses solely by virtue of his position in the enterprise or involvement in or control over the affairs of the enterprise,” or (2) “the predicate offenses are related to the activities of that enterprise.” Op. 7. Third, horizontal relatedness may be established by evidence showing that “each predicate act is related to the RICO enterprise.” Id. (quoting United States v. Polanco, 145 F.3d 536, 541 (2d Cir. 1998)). This is because “predicate crimes [linked to the same enterprise] will share common goals (increasing and protecting the financial position of the enterprise) and common victims (e.g., those who threaten its goals), and will draw their participants from the same pool of associates (those who are members and associates of the enterprise).” Op. 8-9.

Therefore, “the requirements of horizontal relatedness can be established by linking each predicate act to the enterprise, although the same or similar proof may also establish vertical relatedness.” Op. 7. And because the Government “sufficiently demonstrated that each of Daidone’s three predicate acts . . . were related to the Luchese enterprise,” it satisfied both aspects of the relatedness inquiry. Op. 10.

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