HB442 By Representative Hill (J) RFD Judiciary Rd 1 17-MAR-16

SYNOPSIS: This bill would create the Alabama RICO (Racketeer Influenced and Corrupt Organizations) Act to provide criminal penalties and other sanctions for those who engage in racketeering activity or patterns of racketeering activity.

This bill would prohibit a person, through a pattern of racketeering activity or proceeds derived therefrom, from acquiring or maintaining, directly or indirectly, any interest in or control of any enterprise, real property, or personal property of any nature, including money, and would prohibit a person employed by or associated with any enterprise to conduct or participate in, directly or indirectly, an enterprise through a pattern of racketeering activity.

This bill would allow courts to enjoin certain violations of the act to protect the rights of innocent persons and would provide that all property of every kind used or derived from a pattern of racketeering activity is subject to forfeiture.

This bill would also provide for the enforcement of RICO judgments in other states.

Amendment 621 of the Constitution of Alabama of 1901, now appearing as Section 111.05 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, prohibits a general law whose purpose or effect would be to require a new or increased expenditure of local funds from becoming effective with regard to a local governmental entity without enactment by a 2/3 vote unless: it comes within one of a number of specified exceptions; it is approved by the affected entity; or the Legislature appropriates funds, or provides a local source of revenue, to the entity for the purpose.

The purpose or effect of this bill would be to require a new or increased expenditure of local funds within the meaning of the amendment. However, the bill does not require approval of a local governmental entity or enactment by a 2/3 vote to become effective because it comes within one of the specified exceptions contained in the amendment.

A BILL TO BE ENTITLED AN ACT

Relating to racketeering; to provide criminal penalties and other sanctions for those who engage in racketeering activity or patterns of racketeering activity; to provide for criminal and civil penalties; to authorize courts to enjoin certain racketeering activities; to provide for the forfeiture of property used or derived from a pattern of racketeering activity; to provide for the enforcement of RICO judgments in other states; to provide for the venue of criminal proceedings; to provide that the act does not create a private cause of action; and to create the Criminal Organized Activity/RICO Fund; and in connection therewith would have as its purpose or effect the requirement of a new or increased expenditure of local funds within the meaning of Amendment 621 of the Constitution of Alabama of 1901, now appearing as Section 111.05 of the Official Recompilation of the Constitution of Alabama of 1901, as amended.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. This act shall be known and may be cited as the Alabama RICO (Racketeer Influenced and Corrupt Organizations) Act.

Section 2. The Legislature finds and declares the following:

(1) A severe problem is posed in this state by the increasing sophistication of various criminal elements and the increasing extent to which the state and its citizens are harmed as a result of the activities of these elements.

(2) The intent of this act is to impose sanctions against those who violate this act. It is not the intent of the Legislature that isolated incidents of misdemeanor conduct or acts of civil disobedience be prosecuted under this act. It is the intent of the Legislature, however, that this act apply to an interrelated pattern of criminal activity motivated by or the effect of which is pecuniary gain or economic or physical threat or injury. This act shall be liberally construed to effectuate the purposes embodied in its operative provisions.

Section 3. For the purposes of this act, the following terms shall have the following meanings:

(1) CIVIL PROCEEDING. Any civil action commenced by an investigative agency under any provision of this act.

(2) CRIMINAL PROCEEDING. Any criminal prosecution commenced by an investigative agency under any provision of this act.

(3) DOCUMENTARY MATERIAL. Any book, paper, document, writing, drawing, graph, chart, photograph, phonorecord, magnetic tape, computer printout, or other data compilation from which information can be obtained or from which information can be translated into usable form or other tangible item.

(4) ENTERPRISE. Any person, sole proprietorship, partnership, corporation, business trust, union chartered under the laws of this state, or other legal entity; or any unchartered union, association, or group of individuals associated in fact although not a legal entity. The term includes illicit as well as licit enterprises and governmental as well as other entities.

(5) INVESTIGATIVE AGENCY. The Attorney General or the office of any district attorney.

(6) PATTERN OF RACKETEERING ACTIVITY. Any three or more persons engaging in either of the following:

a. At least two acts of racketeering activity in furtherance of one or more incidents, schemes, or transactions that have the same or similar intents, results, accomplices, victims, or methods of commission or otherwise are interrelated by distinguishing characteristics and are not isolated incidents, provided at least one of such acts occurred after July 1, 2016, and that the last of the acts occurred within four years, excluding any periods of imprisonment, after the commission of a prior act of racketeering activity.

b. Any one or more acts of domestic terrorism as described in Sections 13A-10-151 through 13A-10-154, Code of Alabama 1975.

(7) RACKETEERING. Any act or threat involving murder, kidnapping, gambling, arson, robbery, theft, receipt of stolen property, bribery, extortion, obstruction of justice, dealing in narcotic or dangerous drugs, or dealing in securities which is chargeable under the laws of the United States or any of the several states and which is punishable by imprisonment for more than one year or the commission, attempt to commit, solicitation, coercion, or intimidation of another person to commit the following crimes which are chargeable by indictment under the following laws of this state:

a. Offenses chargeable as a felony under Alabama law.

b. Any one or more acts of domestic terrorism as described in Sections 13A-10-151 through 13A-10-154, Code of Alabama 1975.

c. Offenses set forth in Articles 1, 1A, 2, 2A, 3B, 4, 5A, and 6 through 10, Chapter 8, Title 13A, Code of Alabama 1975.

d. Promotion of prostitution.

e. Offenses defined in Alabama law relating to the security of state or county or juvenile correctional facilities.

f. Any criminal offense committed in violation of the laws of the United States or its territories, dominions, or possessions, any of the several states, or any foreign nation which, if committed in this state, would be considered criminal racketeering activity under Section 4.

(8) PERSON. Any natural person or any business entity.

(9) REAL PROPERTY. Any real property situated in this state or any interest in the real property, including, but not limited to, any lease of or mortgage upon the real property.

Section 4. (a) It is unlawful for any person, through a pattern of racketeering activity or proceeds derived therefrom, to acquire or maintain, directly or indirectly, any interest in or control of any enterprise, real property, or personal property of any nature, including money.

(b) It is unlawful for any person employed by or associated with any enterprise to conduct or participate in, directly or indirectly, such enterprise through a pattern of racketeering activity.

(c) It is unlawful for any person to conspire or attempt to violate any of the provisions of subsection (a) or (b).

Section 5. (a) Any person convicted of the offense of engaging in activity in violation of Section 4 is guilty of a Class A felony.

(b) In lieu of any fine otherwise authorized by law, any person convicted of the offense of engaging in conduct in violation of Section 4 shall be sentenced to pay a fine that does not exceed the greater of sixty thousand dollars ($60,000) or three times the amount of any pecuniary value gained by him or her from the violation, with the funds being paid into the Criminal Organized Activity/RICO Fund. If an adverse ruling is made in a forfeiture case against a person convicted of violating Section 4, the fine shall be offset by the amount of the forfeiture awarded to the investigative agency or other governmental entity in the forfeiture action.

(c) The court shall hold a hearing to determine the amount of the fine authorized by subsection (b).

(d) For the purposes of subsection (b), "pecuniary value" means either of the following:

(1) Anything of value in the form of money, a negotiable instrument, a commercial interest, or anything else, derived from the racketeering activity.

(2) Any other property or service that has a value in excess of one hundred dollars ($100) derived from the racketeering activity.

Section 6. (a) Upon a proceeding brought by an investigative agency, any circuit court, after making due provisions for the rights of innocent persons, may enjoin violations of Section 4 by issuing appropriate orders and judgments including, but not limited to, the following:

(1) Ordering any defendant to divest himself of any interest in any enterprise, real property, or personal property.

(2) Imposing reasonable restrictions upon the future activities or investments of any defendant including, but not limited to, prohibiting any defendant from engaging in the same type of endeavor as the enterprise in which he or she was engaged in violation of Section 4.

(3) Ordering the dissolution or reorganization of any enterprise.

(4) Ordering the suspension or revocation of any license, permit, or prior approval granted to any enterprise by any agency of the state.

(5) Ordering the forfeiture of the charter of a corporation organized under the laws of this state or the revocation of a certificate authorizing a foreign corporation to conduct business within this state upon a finding of all of the following:

a. That the corporation was organized primarily to engage in activity in violation of Section 4 rather than legal activity.

b. That the board of directors or a managerial agent acting on behalf of the corporation, in conducting affairs of the corporation, has authorized or engaged in conduct in violation of Section 4.

c. That, for the prevention of future criminal activity, the public interest requires that the charter of the corporation be forfeited and that the corporation be dissolved or the certificate be revoked.

(b) The investigative agency may institute a civil proceeding under subsection (a) against the person charged with a violation of Section 4. In the proceeding, relief shall be granted in conformity with the principles that govern the granting of injunctive relief from threatened loss or damage in other civil cases, provided that no showing of special or irreparable damage shall have to be made. Upon the execution of proper bond against damages for an injunction improvidently granted and a showing of immediate danger of significant loss or damage, a temporary restraining order and a preliminary injunction may be issued in any such action before a final determination on the merits.

(c) Any injured person shall have a right or claim to property forfeited under Section 7 or to the proceeds derived therefrom superior to any right or claim asserted by the investigative agency or other governmental entity, other than for costs, that the defendant has in the same property or proceeds. To enforce such a claim, the injured person must have been a victim in the criminal proceeding, or have the legal authority to assert the rights of the victim, but such designation does not require being listed as a victim in an indictment.

(d) A conviction in any criminal proceeding under this act shall estop the defendant in any subsequent civil action or proceeding as to all matters proved in the criminal proceeding.

Section 7. (a) All property of a defendant in a criminal prosecution under Section 4 of every kind used or intended for use in the course of, derived from, or realized through a pattern of racketeering activity proved by the investigative agency is subject to what shall be known as a RICO forfeiture to the state.

(b) Any property, whether real or personal, and any funds or monetary instruments for which the defendant transferred ownership interest in to another person, may be forfeited if the investigative agency proves both of the following and the circuit court makes due provisions for the rights of innocent persons:

(1) The transfer occurred within the previous three years from the date of arrest for a violation of Section 4 or the institution of forfeiture proceedings pursuant to this act, whichever occurs first.

(2) The defendant retained substantial access to, use of, or control over such property, funds, or instruments.

(c) A RICO forfeiture proceeding shall be governed by Article 4, Chapter 5, Title 15, Code of Alabama 1975, except to the extent that special rules of procedure are stated in this act.

(d) The interest of an owner or lienholder, that is not a defendant in a criminal prosecution under Section 4, in any property otherwise subject to forfeiture, shall not be forfeited unless the investigative agency proves by clear and convincing evidence that the owner or lienholder had both actual knowledge of and knowingly consented to the racketeering activity subject to the criminal prosecution.

(e) Prior to commencing forfeiture proceedings or as soon as reasonably practical thereafter, the investigative agency shall use reasonable efforts to determine the ownership of the property subject to forfeiture and the existence of any mortgage, security interest, or other lien affecting the property or part thereof. Notice of the forfeiture proceeding shall be served upon each affected owner and lienholder.

(f) Upon motion of any party, a proceeding initiated under this act shall be stayed pending the disposition of the underlying criminal action.

Section 8. Notwithstanding any other provision of law, a criminal or civil action or proceeding brought by an investigative agency under this act may be commenced up until five years after the conduct in violation of a provision of this act terminates or the cause of action accrues. Additionally, the running of this period of limitations, with respect to any action brought by the investigative agency under subsection (b) or (c) of Section 6, shall be suspended during the pendency of the prosecution by the investigative agency and for one year thereafter. The limitation of actions set forth in this section does not apply to any criminal or civil action other than as specifically described in this section.

Section 9. This act does not create or establish a private cause of action. This act does not affect any statutory or common law right that otherwise exists. Civil remedies that may be brought by an investigative agency under this act are supplemental and not mutually exclusive.

Section 10. (a) Notwithstanding any other provision of law, a valid judgment rendered by a court of a jurisdiction having a law substantially similar to this act will be recognized and enforced by the courts of this state to the extent that a judgment rendered by a court of this state pursuant to this act would be enforced in the other jurisdiction.

(b) The Attorney General is authorized to enter into reciprocal agreements with the attorney general or chief prosecuting attorney of any jurisdiction having a law substantially similar to this act so as to further the purposes of this act.

Section 11. In any criminal proceeding brought pursuant to this act, the crime shall be considered to have been committed in any county in which an incident of racketeering occurred or in which an interest or control of an enterprise or real or personal property is acquired or maintained.

Section 12. (a) There shall be established as part of the Office of Prosecution Services, the Criminal Organized Activity/RICO Fund. The fund shall be allowed to accept contributions from public officials, law enforcement agencies, advocacy groups, individuals, governmental entities as well as private and charitable entities. Further, the fund may apply for any applicable grants.

(b) If funds are available, the Attorney General, district attorneys, Secretary of the Alabama State Law Enforcement Agency (ALEA), chiefs of police, or sheriffs, may request funds to assist with RICO investigations, training on RICO matters, expenses associated with the prosecution of RICO cases, and the posting of up to a five thousand dollar ($5,000) reward for information leading to the arrest and conviction of any person involved in criminal organized RICO activity which leads to the death or maiming of another person, terrorism or funding of terrorism, or human trafficking. Funds awarded pursuant to the imposition of fines or through civil judgments may also be expended to pay restitution amounts owed to victims.

(c) Twenty-five percent of all fines or civil judgments shall go the State General Fund and the remainder to the Criminal Organized Activity/RICO Fund.

(d) All funds shall be subject to audits by the Alabama Examiners of Public Accounts.

Section 13. Although this bill would have as its purpose or effect the requirement of a new or increased expenditure of local funds, the bill is excluded from further requirements and application under Amendment 621, now appearing as Section 111.05 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, because the bill defines a new crime or amends the definition of an existing crime.

Section 14. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.

Crimes and Offenses

Criminal Law and Procedure

Racketeering

Law Enforcement

Searches and Seizures

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