## Facts

- Richard W. Suter operated National Investment Publishing Company, an investment advisory and coin-purchasing business.
- Utica National Bank, as trustee for R.D. McCullough II’s self-employed retirement plan, sent Suter $23,000 to purchase coins for the account.
- Suter claimed he purchased coins but delivered only three coins worth under $10,000.
- McCullough and Utica sued, alleging Suter used his business to defraud coin investors and sought civil remedies under RICO.
- In related criminal proceedings, Suter pleaded guilty to two counts of mail fraud involving coin investors.
- After a bench trial, the district court found plaintiffs suffered $14,000 in losses, and it awarded treble damages and attorney’s fees under 18 U.S.C. § 1964(c).

## Issues

1. Whether a sole proprietorship can qualify as a RICO “enterprise” under 18 U.S.C. §§ 1961(4) and 1962(c) such that its proprietor can be “associated with” it and liable for conducting its affairs through racketeering activity.

## Decision

- The Seventh Circuit affirmed the judgment for plaintiffs.
- The court held that a sole proprietorship may constitute a RICO “enterprise” for purposes of § 1962(c).
- The court rejected Suter’s argument that his sole proprietorship could not be distinct enough from him to satisfy § 1962(c)’s “person” and “enterprise” framework.
- Because the remaining elements (pattern of racketeering activity, conduct of the enterprise’s affairs, and causation of plaintiffs’ injury) were not meaningfully disputed on appeal, the civil RICO judgment and fee award stood.

## Legal Principles

- RICO’s definition of “enterprise” in 18 U.S.C. § 1961(4) is broad and can include a one-person business operated as a sole proprietorship.
- For 18 U.S.C. § 1962(c), an individual may be the liable “person” who conducts the affairs of a business “enterprise” through a pattern of racketeering activity, even if the business is a sole proprietorship.
- Civil RICO plaintiffs who prove injury to business or property “by reason of” a § 1962 violation may recover treble damages and reasonable attorney’s fees under 18 U.S.C. § 1964(c).

## Conclusion

The Seventh Circuit upheld treble damages and attorney’s fees under civil RICO, ruling that an individual’s sole proprietorship can be treated as the RICO “enterprise” whose affairs the individual conducted through racketeering activity, including mail fraud.


McCullough v. Suter, 757 F.2d 142 (7th Cir. 1985)