Justice Breyer, delivered the opinion of the Court.
The Racketeer Influenced and Corrupt Organizations Act (RICO or Act), 18 U. S. C. § 1961 et seq., makes it "unlawful for any person employed by or associated with any enterprise . . . to conduct or participate . . . in the conduct of such enterprise's affairs" through the commission of two or more statutorily defined crimes—which RICO calls "a pattern of racketeering activity." § 1962(c). The language suggests, and lower courts have held, that this provision foresees two separate entities, a "person" and a distinct "enterprise."
This case focuses upon a person who is the president and sole shareholder of a closely held corporation. The plaintiff claims that the president has conducted the corporation's affairs through the forbidden "pattern," though for present purposes it is conceded that, in doing so, he acted within the scope of his authority as the corporation's employee. In these circumstances, are there two entities, a "person" and a separate "enterprise"? Assuming, as we must given the posture of this case, that the allegations in the complaint are true, we conclude that the "person" and "enterprise" here are distinct and that the RICO provision applies.
Petitioner, Cedric Kushner Promotions, Ltd., is a corporation that promotes boxing matches. Petitioner sued Don King, the president and sole shareholder of Don King Productions, a corporation, claiming that King had conducted the boxing-related affairs of Don King Productions in part through a RICO "pattern," i. e., through the alleged commission of at least two instances of fraud and other RICO predicate
Other Circuits, applying § 1962(c) in roughly similar circumstances, have reached a contrary conclusion. See, e. g., Brannon v. Boatmen's First Nat. Bank of Okla., 153 F.3d 1144, 1148, n. 4 (CA10 1998); Richmond v. Nationwide Cassel L. P., 52 F.3d 640, 647 (CA7 1995); Jaguar Cars, Inc. v. Royal Oaks Motor Car Co., 46 F.3d 258, 265, 269 (CA3 1995); Sever v. Alaska Pulp Corp., 978 F.2d 1529, 1534 (CA9 1992). We granted certiorari to resolve the conflict. We now agree with these Circuits and hold that the Second Circuit's interpretation of § 1962(c) is erroneous.
We do not quarrel with the basic principle that to establish liability under § 1962(c) one must allege and prove the existence of two distinct entities: (1) a "person"; and (2) an "enterprise" that is not simply the same "person" referred to by a different name. The statute's language, read as ordinary English, suggests that principle. The Act says that it applies to "person[s]" who are "employed by or associated with" the "enterprise." § 1962(c). In ordinary English one speaks of employing, being employed by, or associating with others, not oneself. See Webster's Third New International Dictionary 132 (1993) (defining "associate"); id., at 743 (defining
The Government reads § 1962(c) "to require some distinctness between the RICO defendant and the RICO enterprise." Brief for United States as Amicus Curiae 11. And it says that this requirement is "legally sound and workable." Ibid. We agree with its assessment, particularly in light of the fact that 12 Courts of Appeals have interpreted the statute as embodying some such distinctness requirement without creating discernible mischief in the administration of RICO. See St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425, 445 (CA5 2000); United States v. Goldin Industries, Inc., 219 F.3d 1268, 1270 (CA11) (en banc), cert. denied, 531 U.S. 1102 (2000); Begala v. PNC Bank, 214 F.3d 776, 781 (CA6 2000), cert. denied, 531 U.S. 1145 (2001); Doyle v. Hasbro, Inc., 103 F.3d 186, 190 (CA1 1996); Richmond, supra, at 646-647; Gasoline Sales, Inc. v. Aero Oil Co., 39 F.3d 70, 72-73 (CA3 1994); Confederate Memorial Assn., Inc. v. Hines, 995 F.2d 295, 299-300 (CADC 1993); Board of Cty. Comm'rs, San Juan Cty. v. Liberty Group, 965 F.2d 879, 885 (CA10), cert. denied, 506 U.S. 918 (1992); River City Markets, Inc. v. Fleming Foods West, Inc., 960 F.2d 1458, 1461 (CA9 1992); Busby v. Crown Supply, Inc., 896 F.2d 833, 840 (CA4 1990); Atlas Pile Driving Co. v. DiCon Financial Co., 886 F.2d 986, 995 (CA8 1989); Bennett v. United States Trust Co. of New York, 770 F.2d 308, 315, and n. 2 (CA2 1985), cert. denied, 474 U.S. 1058 (1986); see also Semiconductor Energy Laboratory Co. v. Samsung Electronics Co., 204 F.3d 1368, 1383, n. 7 (CA Fed. 2000) (approving of distinctness requirement in dicta), cert.
While accepting the "distinctness" principle, we nonetheless disagree with the appellate court's application of that principle to the present circumstances—circumstances in which a corporate employee, "acting within the scope of his authority," 219 F. 3d, at 117, allegedly conducts the corporation's affairs in a RICO-forbidden way. The corporate owner/employee, a natural person, is distinct from the corporation itself, a legally different entity with different rights and responsibilities due to its different legal status. And we can find nothing in the statute that requires more "separateness" than that. Cf. McCullough v. Suter, 757 F.2d 142, 144 (CA7 1985) (finding either formal or practical separateness sufficient to be distinct under § 1962(c)).
Linguistically speaking, an employee who conducts the affairs of a corporation through illegal acts comes within the terms of a statute that forbids any "person" unlawfully to conduct an "enterprise," particularly when the statute explicitly defines "person" to include "any individual . . . capable of holding a legal or beneficial interest in property," and defines "enterprise" to include a "corporation." 18 U. S. C. §§ 1961(3), (4). And, linguistically speaking, the employee and the corporation are different "persons," even where the employee is the corporation's sole owner. After all, incorporation's basic purpose is to create a distinct legal entity, with legal rights, obligations, powers, and privileges different from those of the natural individuals who created it, who own it, or whom it employs. See United States v. Bestfoods, 524 U.S. 51, 61-62 (1998); Burnet v. Clark, 287 U.S. 410, 415 (1932); 1 W. Fletcher, Cyclopedia of the Law of Private Corporations §§ 7, 14 (rev. ed. 1999).
Further, to apply the RICO statute in present circumstances is consistent with the statute's basic purposes as this Court has defined them. The Court has held that RICO both protects a legitimate "enterprise" from those who would use unlawful acts to victimize it, United States v. Turkette, 452 U.S. 576, 591 (1981), and also protects the public from those who would unlawfully use an "enterprise" (whether legitimate or illegitimate) as a "vehicle" through which "unlawful . . . activity is committed," National Organization for Women, Inc., supra, at 259. A corporate
Conversely, the appellate court's critical legal distinction— between employees acting within the scope of corporate authority and those acting outside that authority—is inconsistent with a basic statutory purpose. Cf. Reves, supra, at 184 (stating that an enterprise is "`operated,' " within § 1962(c)'s meaning, "not just by upper management but also by lower rung participants in the enterprise who are under the direction of upper management " (emphasis added)). It would immunize from RICO liability many of those at whom this Court has said RICO directly aims—e. g., high-ranking individuals in an illegitimate criminal enterprise, who, seeking to further the purposes of that enterprise, act within the scope of their authority. Cf. Turkette, supra, at 581 (Congress "did nothing to indicate that an enterprise consisting of a group of individuals was not covered by RICO if the purpose of the enterprise was exclusively criminal").
Finally, we have found nothing in the statute's history that significantly favors an alternative interpretation. That history not only refers frequently to the importance of undermining organized crime's influence upon legitimate businesses but also refers to the need to protect the public from those who would run "organization[s] in a manner detrimental to the public interest." S. Rep. No. 91-617, at 82. This latter purpose, as we have said, invites the legal principle we endorse, namely, that in present circumstances the statute requires no more than the formal legal distinction between "person" and "enterprise" (namely, incorporation) that is present here.
In reply, King argues that the lower court's rule is consistent with (1) the principle that a corporation acts only through its directors, officers, and agents, 1 Fletcher, supra, § 30, (2) the principle that a corporation should not be liable
For these reasons, the Court of Appeals' judgment is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.