## Facts

- The United States filed a civil RICO action in the Eastern District of New York under 18 U.S.C. §§ 1961–1968 against “The Bonanno Organized Crime Family of La Cosa Nostra,” individual alleged members and leaders, and related union entities and benefit funds.
- The complaint alleged the Bonanno Family was a New York-based organized-crime association with a hierarchical structure (boss/underboss and “crews” led by crew chiefs) and internal rules requiring permission from superiors to conduct criminal activity.
- The government alleged the Family directed and controlled racketeering activities, including extortion and labor-racketeering schemes involving Teamsters Local 814 and related benefit funds.
- On motions directed at the pleadings, the district court dismissed the RICO counts against the Bonanno Family, holding the Family was not a RICO “person.”
- The United States appealed the dismissal as to the Bonanno Family only.

## Issues

1. Whether an organized-crime “family,” as an unincorporated illicit association, is a RICO “person” under 18 U.S.C. § 1961(3) (“any individual or entity capable of holding a legal or beneficial interest in property”).
2. Whether the alleged hierarchical structure and centralized control supported treating the association as an identifiable “entity” capable of holding beneficial property interests for RICO purposes.
3. Whether naming the crime family as a RICO “person” was barred by § 1962(c)’s requirement that the “person” be distinct from the “enterprise.”

## Decision

- The Second Circuit reversed the dismissal and remanded for further proceedings.
- The court held the Bonanno Family qualifies as a RICO “person” because it is an “entity capable of holding a legal or beneficial interest in property” within the meaning of § 1961(3).
- The court concluded that informal or clandestine control over assets and proceeds can constitute a “beneficial interest” sufficient to satisfy § 1961(3), even if not held in a formal legal name.
- The court rejected limiting “person” status to entities with formal legal recognition, reasoning that RICO reaches illicit associations as well as lawful organizations.
- The court found the complaint’s allegations of a continuing hierarchical organization supported treating the Family as an identifiable entity rather than a transient conspiracy.
- The court determined the pleadings could maintain the required separation between “person” and “enterprise” by alleging distinct roles for the crime family and the broader set of infiltrated or affected institutions.

## Legal Principles

- Under 18 U.S.C. § 1961(3), a RICO “person” includes “any individual or entity capable of holding a legal or beneficial interest in property.”
- An unincorporated criminal association can qualify as a RICO “person” if it is an identifiable entity that can hold beneficial property interests through its structure and control over assets, including through nominees or informal arrangements.
- “Beneficial interest” for RICO purposes may be shown by an entity’s ability to direct, enjoy, and distribute the benefits of property, even when the interests are concealed or derived from unlawful activity.
- RICO’s “person” concept is not confined to formally recognized legal entities; it can include illicit associations consistent with RICO’s scope.
- The § 1962(c) “person” and “enterprise” concepts can remain distinct when the pleadings attribute separate roles or capacities, even if overlapping individuals are involved.

## Conclusion

The Second Circuit held that an organized-crime family alleged to function as a continuing, structured association capable of controlling and benefiting from property is a RICO “person” under § 1961(3), allowing the government to sue the association in a civil RICO action and requiring reinstatement of the dismissed claims on remand.


United States v. The Bonanno Organized Crime Family of La Cosa Nostra, 879 F.2d 20 (2d Cir. 1989)