## Facts

- Federal prosecutors alleged corruption within the New York City Transit Police Benevolent Association (TPBA), treated as the RICO enterprise.
- Ronald Reale (TPBA president) and Richard Hartman (TPBA labor negotiator/insurance broker) were accused of arranging or receiving improper payments tied to TPBA business.
- James J. Lysaght and Peter Kramer, partners in a law firm that received substantial TPBA legal fees, were accused of paying kickbacks in exchange for that work.
- The indictment charged, among other offenses, substantive RICO violations and RICO conspiracy under 18 U.S.C. § 1962.
- The district court dismissed the substantive RICO counts against certain defendants based on the Reves “operation or management” requirement.
- After a lengthy jury trial, the appellants were convicted of RICO conspiracy; Reale and Hartman were also convicted of additional substantive offenses.
- On appeal, the government moved to correct the jury-instruction transcript due to an erroneous alteration made in chambers.

## Issues

1. Whether Reves’s “operation or management” test for substantive RICO liability limits RICO conspiracy liability under 18 U.S.C. § 1962(d) for “outsiders” who do not operate or manage the enterprise.
2. Whether, after Salinas v. United States, a § 1962(d) conviction requires proof that the defendant personally agreed to commit (or commit) two predicate acts.
3. Whether § 1962(d) requires proof that an outsider knew of and agreed to all racketeering acts committed in furtherance of the enterprise’s scheme.
4. Whether the evidence and jury instructions were sufficient and legally correct to support the § 1962(d) convictions.

## Decision

- The court granted the government’s motion to correct the trial transcript regarding the jury instructions.
- The court held that Reves limits substantive liability under § 1962(c) but does not bar conspiracy liability under § 1962(d).
- The court held that, under Salinas, § 1962(d) does not require proof that the defendant personally agreed to commit two predicate acts.
- The court held that a conspirator need not know every predicate act or participant; awareness of the conspiracy’s essential nature and agreement to further its unlawful objectives can suffice.
- The court affirmed the convictions and sentences (with a dissent raising concerns about the breadth of conspiracy liability and sufficiency of proof as to these defendants).

## Legal Principles

- Reves’s “operation or management” requirement applies to substantive RICO under 18 U.S.C. § 1962(c), not to RICO conspiracy under § 1962(d).
- After Salinas, a defendant may be guilty under § 1962(d) without personally committing, or agreeing personally to commit, two predicate acts, so long as the defendant intended to further an endeavor that would satisfy the elements of a substantive RICO violation if carried out.
- For § 1962(d), the government need not prove the defendant knew of or agreed to every racketeering act; it must prove the defendant knowingly joined an agreement whose objective was to conduct the enterprise’s affairs through a pattern of racketeering activity.
- Standard conspiracy principles apply: a defendant can be liable even with limited knowledge of details, if the defendant understood the conspiracy’s essential nature and voluntarily participated.

## Conclusion

The Second Circuit affirmed RICO conspiracy convictions arising from alleged TPBA corruption, holding that § 1962(d) conspiracy liability is not limited by Reves’s operation/management test and, after Salinas, does not require a personal agreement to commit two predicate acts or knowledge of every racketeering act, so long as the defendant knowingly joined and intended to further the enterprise’s racketeering objectives.


United States v. Zichettello, 208 F.3d 72 (2d Cir. 2000)