JAMES C. HILL, Circuit Judge:
We granted rehearing en banc in this case to decide whether the term "interest" as used in 18 U.S.C. § 1963(a)(1), the criminal
The facts surrounding the indictment, prosecution, and conviction of the various defendants are set out in detail in the panel opinion, 648 F.2d at 378-80, 409-11 app. Briefly, the evidence showed that a group of individuals associated for the purpose of committing arson with the intent to defraud insurance companies. This association in fact enterprise,
Id. at 380. These activities formed the basis for an indictment charging twenty-three defendants with mail fraud,
Resolution of this issue of statutory construction must begin with an analysis of the language of the statute itself. Bread Political Action Committee v. Federal Election Commission, 455 U.S. 577, ___, 102 S.Ct. 1235, 1237, 71 L.Ed.2d 432 (1982) (quoting Dawson Chemical Co. v. Rohm & Haas Co., 448 U.S. 176, 187, 100 S.Ct. 2601, 2608, 65 L.Ed.2d 696 (1980)). In the absence of "a clearly expressed legislative intention to the contrary," the plain language of the statute controls its construction. ___ U.S. ___, 102 S.Ct. at 1238 (quoting Consumer Product Safety Comm'n v. GTE Sylvania, 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980)). Under 18 U.S.C. § 1963(a), a defendant who
On its face, § 1963(a)(1) does not limit forfeitable interests to those in an enterprise. Rather, the statute speaks broadly of "any interest" which is the product of violating RICO's prohibitory provision, section 1962. Significantly, § 1963(a)(2) expressly limits forfeitable interests to those in an enterprise. Guiding our efforts at statutory construction in the past has been the presumption that "where Congress includes particular language in one section of a statute but omits it in another section of the same Act, ... Congress acts intentionally and purposely in the disparate inclusion or exclusion." United States v. Wong Kim Bo, 472 F.2d 720, 722 (5th Cir. 1972).
No definition of the term "interest" appears in RICO. We must assume "that the legislative purpose is expressed by the ordinary meaning of the words used." Richards v. United States, 369 U.S. 1, 9, 82 S.Ct. 585, 7 L.Ed.2d 492 (1962). The common or dictionary definition of the term includes "right, title, or legal share in something; participation in advantage, profit, and responsibility." Webster's Third New International Dictionary 1178 (1971). It has also been defined as "[t]he most general term that can be employed to denote a right, claim, title, or legal share in something." Black's Law Dictionary 729 (5th ed. 1979). The concept is therefore broad enough to include profits or income. Indeed, this understanding comports with the House Report's definition of "interest" as inclusive of "all property and interests, as broadly described, which are related to the violations." H.R.Rep.No.1549, 91st Cong., 2d Sess. 57, reprinted in  U.S.Code Cong. & Ad.News 4007.
Not only is the concept of profits or proceeds within the plain meaning of "interest," but the proceeds in question in this case were "acquired ... in violation of section 1962," as § 1963(a)(1) requires. The insurance proceeds were the product of the defendants' violation of § 1962(c). That section makes it unlawful for "any person ... associated with any enterprise ... to conduct or participate ... in the conduct of such enterprise's affairs through a pattern of racketeering activity...." In this case, members of the arson ring conducted the affairs of that enterprise through the racketeering offenses of arson and mail fraud. Thus the unambiguous language of § 1963(a)(1) supports the view that profits derived from a pattern of racketeering activities are subject to forfeiture.
Second, the argument of defendants and amicus misconstrues the function of the reference in § 1963(a)(1) to § 1962. To be sure, the reference serves a kind of limiting function, but that function is not to define the type of forfeitable interests, as defendants and amicus assume. Rather, the reference merely identifies the illegal activities which trigger the forfeiture penalty, supplying the nexus between the RICO violation and the forfeitable property which the government must establish at trial.
Third, reading an enterprise limitation into § 1963(a)(1) renders that section surplusage. Section 1963(a)(2) on its face requires forfeiture of "any interest in ... any enterprise which [the defendant] has established, operated, controlled, conducted, or participated in the conduct of, in violation of section 1962." The establishment, operation, and control language clearly refers to violations of §§ 1962(a) and (b). Section 1963(a)(1) would merely be duplicative of this provision if, as defendants contend, it reaches only interests in an enterprise
The cure for these defects in reasoning lies in an examination of the effect of § 1963(a)(1) on a § 1962(c) violation. Section 1962(c) makes conducting an enterprise through a pattern of racketeering unlawful. The forfeiture resulting therefrom, under § 1963(a)(1), is the interest (or interests) acquired through or as a result of that unlawful conduct. Forfeiture of defendant's interest in the enterprise is governed by the impact of § 1963(a) (1) and (2) upon § 1962(a) and (b). If § 1962(c) results in any forfeiture at all — and § 1963(a) provides for forfeiture if one violates any § 1962 section — it must provide for forfeiture of something more than § 1962(a) or (b) or be mere surplusage. This interpretation restores § 1963(a)(1) to a role in the penalty scheme different from that played by § 1963(a)(2) and accords with the unambiguous language of the former section.
Turning now from the language of the statute itself to expressions of legislative intent, we find confirmation for our view that § 1963(a)(1) reaches profits derived from racketeering activity.
Organized Crime Control Act of 1970, Pub.L.No.91-452, 84 Stat. 922-23 (1970) (emphasis added). Having identified the problem, Congress also determined the cause for the criminal justice system's failure to make inroads on organized crime and its economic power base and proposed the cure it envisioned the new Act to embody.
S.Rep.No.617, 91st Cong., 1st Sess. 79 (1969) (emphasis added). Simply put, Congress' express objective in RICO is to take the profit out of organized crime.
The criminal forfeiture provisions of § 1963(a) are central to this remedial objective. Section 1963(a) launches a two-pronged attack on the sources of economic power which feed the coffers and activities of organized crime. It demands both divestiture of power over the enterprise itself
From the debates on the Organized Crime Control Act, it is clear that the target of Congress' attack included racketeering operations in which the chief type of property interest obtained by organized crime would be something other than an ownership or proprietary interest.
In addition, when as here the RICO enterprise is an association in fact, rather than a legal entity, and the alleged RICO violation is conducting the affairs of this enterprise through racketeering methods, there often may be no forfeitable property other than the ill-gotten proceeds. Such may be the case not only with arson-for-profit rings but also with narcotics trafficking or pornography operations. It would certainly be contrary to Congress' stated intention to attack organized crime's source of economic power "on all available fronts," S.Rep.No.617, 91st Cong., 1st Sess. 79 (1969), to insulate from forfeiture the sole product of many racketeering activities. Excluding proceeds from the reach of § 1963(a)(1) would provide an incentive, not a deterrent, to bankruptcy schemes and to other forms of racketeering which yield primarily cash revenues.
Still further support for a broad interpretation of § 1963(a)(1) is found in the legislative history.
S. 1861, 91st Cong., 1st Sess. (1969). In mid-October, however, the Senate Judiciary Committee began a revision of RICO. Out of the revision developed a section 1963(a) containing two subparts. Section 1963(a)(2) retained the concept of limiting forfeiture to a defendant's interest in an enterprise. On the other hand, section 1963(a)(1) dropped the enterprise limitation altogether. We find it persuasive that Congress considered limiting all forfeitures under RICO to enterprise interests but, after extensive legislative work, ultimately opted to delete this across-the-board restriction.
Finally, in examining the legislative history we must address one of the chief reasons cited by the panel for its conclusion that § 1963(a)(1) does not reach the insurance proceeds at issue here. In August 1969 Congress received a letter from then Deputy Attorney General Richard P. Kleindienst commenting upon RICO's forfeiture provision. It expressed the views of the Justice Department as follows:
Measures Relating to Organized Crime, Hearings Before the Subcomm. on Criminal Laws and Procedures of the Senate Comm. on the Judiciary, 91st Cong., 1st Sess. 407 (1969) (emphasis added). The panel viewed the letter as indicative of congressional intent strictly to limit forfeitures. This interpretation of the letter's significance, however, ignores its context.
First, Congress was aware that it was entering new territory with the enactment of RICO; there was concern particularly over the constitutionality of the sanction of in personam criminal forfeiture.
Our more limited interpretation of the meaning of the Kleindienst letter finds support in the Justice Department's comments in subsequent House hearings on S. 30 as it passed the Senate.
Hearings on S. 30 Before Subcomm. No. 5 of the House Comm. on the Judiciary, 91st Cong., 2d Sess. 171 (1970) (emphasis added). Notably, the Justice Department's comments on S. 30 do not describe § 1963(a) forfeitures as limited to interests in an enterprise.
Our holding today squarely conflicts with that of the Ninth Circuit in United States v. Marubeni America Corp., 611 F.2d 763 (9th Cir. 1980).
In Marubeni the Ninth Circuit focused much of its attention on the "1% investment exception" in § 1962(a). Id. at 766-67. To the general prohibition in § 1962(a) on investment of income derived from a pattern of racketeering activity Congress added an exception.
18 U.S.C. § 1962(a) (1976). From this the Ninth Circuit reasoned: "Congress would not have established rules for the investment of racketeering income, enforced by the penalty of criminal forfeiture, if it intended the government to seize that income regardless of how it was used." 611 F.2d at 767. Our interpretation of § 1963(a)(1) does not, as the Ninth Circuit's comment would imply, render § 1962(a)'s 1% investment exception meaningless. We believe that the court in Marubeni obscured the separate functions of the prohibitory and penalty provisions of RICO.
The 1% investment exception evidences Congress' choice not to criminalize the investment of illegally derived income when the total investment is de minimis and thus would not grant the racketeer control over the business entity. So understood the exception functions as a practical limit, exempting from prosecution what otherwise would constitute illegal activity under § 1962(a). If the investment of illegally derived income constitutes less than 1% of the issuer's outstanding shares, that investment alone violates no criminal proscription and hence triggers no forfeiture at all. The exception thus limits the definition of what is illegal. It does not immunize from forfeiture the fruits of activities that are made illegal under other provisions of § 1962; it "does not create a class of investment of illicit income exempt from forfeiture."
The court in Marubeni also points to the use of the term "profits" in the forfeiture provision of the Comprehensive Drug Abuse Prevention and Control Act of 1970, 21 U.S.C. § 848(a)(2)(A),
At oral argument a question was raised as to whether the government has an obligation
RICO is a powerful and flexible weapon designed to break the economic power of organized crime and hence to undermine its ability to disrupt and drain the national economy. We acknowledge that its breadth supplies a potential for great abuse. The harshness of the statute's impact, however, cannot dictate the proper construction of its provisions. Congress was aware of the far-reaching measures it was enacting to deal with the unprecedented problem of organized crime. The plain language of the statute, its remedial and deterrent purposes, and the legislative history all compel the conclusion that § 1963(a)(1) encompasses forfeiture of the income or proceeds of racketeering activity.
The judgment of the district court on the forfeiture issue is
POLITZ, Circuit Judge, joined by ALVIN B. RUBIN, VANCE, TATE, THOMAS A. CLARK, JERRE S. WILLIAMS and GARWOOD, Circuit Judges, dissenting:
Respectfully, I dissent, regretting that I cannot join my colleagues in one of the last cases decided en banc by the Former Fifth Circuit. I am unable to concur in the holding that a payment made under a fire insurance policy necessarily constitutes a forfeitable "interest" under 18 U.S.C. § 1963(a)(1), being of the opinion that the language, structure and purpose of the Racketeer Influenced and Corrupt Organization Act direct a different conclusion.
The issue posited by the court today is whether the term "interest," as used in § 1963(a)(1), "includes income or profits derived from a pattern of racketeering activity." That is the larger issue, but perhaps the more precise issue at bar is whether, under the RICO forfeiture provisions, a money judgment may be rendered against a defendant, in a sum equal to the amount paid under a fire insurance policy, for a loss occasioned by arson in a setting violative of RICO.
Just as nature abhors a vacuum, historically our society has abhorred forfeitures. As Judge Hill notes in footnote 23, the framers of the Constitution demonstrated their repudiation of the harsh English tradition of criminal forfeiture, and our very first Congress forbade the forfeiture of an estate because of a criminal conviction. Further, a forfeiture with an in personam application, as we have before us, is to be most charily assessed. It is from this perspective that I address the inquiry before the en banc court.
RICO is Title IX of the Organized Crime Control Act of 1970, Congress's solar plexus blow to organized crime. The Act and its legislative history reflect Congress's determination to counter the takeover of legitimate businesses, as well as to combat organized, illegal activities. In enacting RICO, Congress ordained a criminal statute of vast scope and stern consequences, aimed at punishing and deterring those who would wreak havoc in the social and economic fabric of our society.
The penalties to which Congress subjected a violator of RICO, as set forth in § 1963, include a fine of up to $25,000, imprisonment of up to 20 years, and the forfeiture to the United States of:
18 U.S.C. § 1963(a)(1) & (2).
The court today concludes that the word "interest," as here used, includes income or profits derived from a pattern of racketeering activity. I do not share that conclusion, adhering to the view expressed in the panel opinion that the term "interest," as used in § 1963(a)(1), applies only to an interest in the enterprises envisioned in §§ 1962(a), (b) and (c) and not to income derived from illegal activity. Whether this distinction is wise, prudent or appropriate is, as I perceive it, a matter best left to the legislative branch, for it represents a significant policy decision.
The interests to be forfeited under § 1963(a)(1) are those acquired or maintained
I am persuaded that the forfeiture sanction intended by § 1963(a)(1) relates to interests in a business acquired with tainted money (§ 1962(a)), and interests in any enterprise acquired or maintained by racketeering activity or unlawful debt collection, (§ 1962(b)). I am further persuaded that § 1963(a) (2) relates primarily to an interest in an enterprise which is involved in conduct violative of § 1962(c). To me, the text of these sections clearly reflects that Congress made interests in enterprises the grist of forfeiture. The sections seek to prevent the use of ill-gotten gains to corrupt businesses, to prevent the acquiring and maintaining of an interest in an enterprise through illegal activities, and to prevent the involvement of enterprises in illegal activities.
There are other reasons to believe that Congress did not intend "income" to be synonymous with "interest" for the purposes of forfeiture under § 1963. Although the definitional section, § 1961, does not include the specific meaning to be ascribed to "interest" or "income," the term "any interest" and the word "interest" appear in several places throughout the statute. Section 1961(3) refers to a "legal or beneficial interest in property." Section 1962(a) refers to "any interest in ... any enterprise." Section 1962(b) repeats the words "any interest in ... any enterprise." Further, § 1964(a), the civil remedies section, prescribes that the court may order a person "to divest himself of any interest, direct or indirect, in any enterprise." In each instance the meaning is clear — an "interest" is an interest in an enterprise.
The panel found persuasive the analysis of our colleagues of the Ninth Circuit in United States v. Marubeni America Corp., 611 F.2d 763 (9th Cir. 1980), who concluded that the forfeiture in RICO extends only to interests in an enterprise and does not include income or proceeds from a pattern of racketeering activity. I continue to be of that view and also find persuasive the discussion in United States v. Thevis, 474 F.Supp. 134 (N.D.Ga.1979) and United States v. Meyers, 432 F.Supp. 456 (S.D.Pa.1977).
The majority concludes that "reading an enterprise limitation into § 1963(a) (1) renders that section surplusage." I disagree. One example underscores the error in this suggestion. Hypothesize that an individual uses income from racketeering activity to purchase 2% of the stock of a corporation listed on the stock exchange. The investment is totally passive; no element of control or influence envisioned by § 1963(a)(2) is involved. This interest would not be forfeitable under § 1963(a)(2), but it would be forfeitable under § 1963(a) (1) since the acquisition violates § 1962(a). The recognition of an enterprise limitation in § 1963(a)(1) does not, therefore, render that section surplusage.
The court today is not impressed with a portion of the legislative history cited by the panel, specifically the August 1969 letter from Deputy Attorney General Richard P. Kleindienst, in part because the letter specifically addressed another pending RICO proposal, S. 1861. Although acknowledging that the Kleindienst letter is cited in the Senate Report on S. 30, the enacted bill, the opinion maintains that the letter provides little meaningful guidance on the scope of the legislation as finally adopted. I disagree.
(Emphasis added.) Id. at 160. Accord, id. at 34.
We find similar language in the House Report which speaks to forfeiture of interest "in an enterprise." H.R.Rep.No.91-1549, 91st Cong., 1st Sess. 35 and 57 (1970), reprinted in 1970 U.S.Code Cong. & Admin.News, 4007, 4010.
The essence of the forfeiture grounds a further reason for my disagreement with the en banc court's conclusion that § 1963 allows for forfeiture of monies received as insurance proceeds. Although general forfeitures are historically disfavored, Congress has frequently used the onus of specific forfeitures in combating illegal activities. See, e.g., 15 U.S.C. § 11 (forfeiture of property acquired in violation of anti-trust laws); 15 U.S.C. § 1177 (forfeiture of property used in connection with illegal gambling); 16 U.S.C. §§ 65, 117(d), 128, 171, 256c, 4081 (forfeiture of guns and other equipment used unlawfully in national parks); 18 U.S.C. § 924 (forfeiture of firearms used illegally); 18 U.S.C. § 1082 (forfeiture of property used in connection with illegal gambling); 18 U.S.C. § 3612 (forfeiture of bribe monies illegally received by public officials); 18 U.S.C. § 3615 (forfeiture of property used in connection with liquor violations); 18 U.S.C. § 3617(d) (forfeiture of vehicles and aircraft seized for a violation of liquor laws); 18 U.S.C. §§ 3618 & 3619 (forfeiture of conveyances used to introduce intoxicants into Indian territories); 19 U.S.C. § 1306 (forfeiture of unwholesome imported meat); 19 U.S.C. §§ 1453 & 1492 (forfeiture of property seized in violation of customs laws); 21 U.S.C. § 334 (forfeiture of adulterated food); 31 U.S.C. § 490 (forfeiture of funds illegally withheld by public official); 49 U.S.C. §§ 781 & 782 (forfeiture of vessels, vehicles and aircraft used to transport contraband). In each of these instances, the forfeiture statutes provided for in rem actions against things put to illegal use. Although RICO prescribed an in personam forfeiture, it does not provide an unlimited sanction but is, I believe, restricted to the forfeiture of a specific interest in an enterprise which was acquired, or over which the defendant exercised control, contrary to § 1962. If Congress had intended otherwise, I am convinced it would have said so clearly and unequivocally.
No strangers to forfeitures generally, Congress is also no stranger to forfeitures of fruits and profits. If Congress meant to impose a forfeiture of income and proceeds in RICO, I suggest Congress could and would have done so in unmistakeable language. Congress knows how to decisively direct the forfeiture of profits. The same Congress which adopted RICO, in a matter of days adopted the Comprehensive Drug Abuse Prevention and Control Act of 1970. 21 U.S.C. § 848(a)(2) states: "Any person who is convicted under paragraph (1) of engaging in a continuing criminal enterprise shall forfeit to the United States — (A) the profits obtained by him in such enterprise...." (emphasis added). That is the kind of specification one would expect Congress to use when creating our first in personam forfeiture statute.
The court today would distinguish this variance in Congressional approach by observing that narcotics trafficking typically involves cash transactions while RICO violations result in interests which take a variety of forms. I disagree with so light a rejection of what I see as a meaningful, instructive variant.
Based on the foregoing, I am of the view that Congress did not intend to include in
Finally, accepting the proposition that insurance proceeds are forfeitable, I question whether the forfeiture sanction is applicable to Russello and Rodriguez. These two defendants owned and insured buildings before the advent of the RICO arson ring. They later participated and feloniously burned their properties. The insurance proceeds may be taken as a different manifestation of a pre-RICO violation asset. If so, are the insurance payments truly income, fruits, revenue or profits of racketeering activities?
Regardless, these proceeds, based on arson and the payments of which were induced by fraud, are very likely to be defeasible. One would expect that under the insurance contract, and controlling state law, the insurer would be entitled to recapture the payments. In that event, what happens to the forfeiture decrees which are non-asset oriented money judgments, collectible from the defendants and their estates? Assuming recapture by the insurer, or diversion of all or a portion to an innocent third party such as a mortgage holder, will the United States still have an enforceable money judgment against the defendant and his estate? Presumably so, and if that presumption is correct, what about the concept of divestiture of ill-gotten gains and the separation of the convicted defendant from the fruits of his illegal labors? Will this matter not in fact resolve into the forfeiture becoming an additional fine? Did Congress really intend to establish a latent fine with a potential for exceeding the maximum statutorily stated fine ten-fold, twenty-fold or one hundred-fold?
I suggest that this type of difficulty is inherent in today's decision and is a direct concomitant of our holding that the forfeitable interest under § 1963(a)(1) extends beyond a present, discernible interest in an existing enterprise.
I respectfully dissent.
18 U.S.C. §§ 1962(a), (b) (1976).
Thevis, 474 F.Supp. at 142. That the enterprise concept is the overriding concept in RICO, distinguishing a RICO prosecution from an ordinary prosecution for the predicate acts of racketeering, does not necessarily mean that the enterprise concept is also a limitation on the type of property interests subject to forfeiture under § 1963(a)(1).
This court has also recognized that the purpose of the forfeiture provision is to "deprive those convicted of racketeering activity of their economic base so that they could not easily continue illegal activities." United States v. L'Hoste, 609 F.2d 796, 814 (5th Cir.), cert. denied, 449 U.S. 833, 101 S.Ct. 104, 66 L.Ed.2d 39 (1980).
U.S.Const.art. III, § 3, cl. 2. The first Congress also enacted a provision barring corruption of the blood or forfeiture of estate upon conviction. Act of Apr. 30, 1790, 1 Stat. 117, ch. 9 § 24 (codified in 18 U.S.C. § 3563).
We affirm the order of forfeiture of Martino's interest in his two companies because it falls squarely within the language of § 1963(a)(2) which provides for the forfeiture of any interest affording a source of influence over the enterprise. Both of Martino's companies were active in the enterprise. They provided funds for the arson and fraud ventures. The M & S Investment Corporation purchased property with the intent to burn it, but sold the property to someone else who then burned it. Martino was an active participant; he played an important role within the enterprise, a role made even more effective because of the companies he managed. The Act requires forfeiture of his interest in these companies.