HB 1557-FN - AS INTRODUCED

1998 SESSION

98-2355

04/09

HOUSE BILL 1557-FN

AN ACT establishing the New Hampshire racketeer influenced and corrupt organizations act.

SPONSORS: Rep. Cobbin, Graf 11

COMMITTEE: Criminal Justice and Public Safety

ANALYSIS

This bill establishes the New Hampshire version of the federal racketeer influenced and corrupt organizations (RICO) statute.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

98-2355

04/09

STATE OF NEW HAMPSHIRE

In the Year of Our Lord One Thousand Nine Hundred and Ninety-Eight

AN ACT establishing the New Hampshire racketeer influenced and corrupt organizations act.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 New Chapter; Racketeer Influenced and Corrupt Organizations. Amend RSA by inserting after chapter 640 the following new chapter:

CHAPTER 640-A

RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS

640-A:1 Definitions. In this chapter:

I. "Racketeering activity" means:

(a) Any act or threat involving murder, kidnapping, gambling, arson, robbery, bribery, extortion, or dealing in narcotic or other dangerous drugs, which is chargeable under state law and punishable by imprisonment for more than one year or is chargeable civilly under applicable state or federal civil rights statutes;

(b) Any act which is indictable under any provision of federal law pursuant to 18 U.S.C. 1961(1);

(c) Abuse of office as defined by RSA 643; or

(d) Use of legal process to defraud or violate the civil rights of any person.

II. "State" means the state of New Hampshire, any political subdivision, or any department or agency thereof.

III. "Person" includes any individual or entity capable of holding a legal or beneficial interest in property.

IV. "Enterprise" includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity.

V. "Pattern of racketeering activity" requires at least 2 acts of racketeering activity, one of which occurred after the effective date of this chapter and the last of which occurred within 10 years (excluding any period of imprisonment) after the commission of a prior act of racketeering activity.

VI. "Unlawful debt" means a debt:

(a) Incurred or contracted in violation of the laws of the United States, or the laws of New Hampshire or, which is enforceable under state or federal laws in whole or in part as to principal or interest because of the laws relating to usury, and

(b) Which was incurred in violation of the laws of the United States, the laws of New Hampshire, or the business of lending money or a thing of value at a rate usurious under state or federal law, where the usurious rate is at least twice the enforceable rate.

VII. "Racketeering investigator" means any attorney or investigator so designated by the attorney general and charged with the duty of enforcing or carrying into effect this chapter.

VIII. "Racketeering investigation" means any inquiry conducted by any racketeering investigator for the purpose of ascertaining whether any person has been involved in any violation of this chapter or of any final order, judgment, or decree of any court of New Hampshire, duly entered in any case or proceeding arising under this chapter.

IX. "Documentary material" includes any book, paper, document, record, recording, or other material.

X. "Attorney general" includes the attorney general of New Hampshire, deputy attorney general of New Hampshire, any assistant attorney general of New Hampshire, or any employee of the department of justice or any employee of any department or agency of New Hampshire so designated by the attorney general to carry out the powers conferred on the attorney general by this chapter. Any department or agency so designated may use in investigations authorized by this chapter either the investigative provisions of this chapter or the investigative powers of such department or agency otherwise conferred by law.

640-A:2 Prohibited Activities.

I. It shall be unlawful for any person who has received any income derived, directly or indirectly, from a pattern of racketeering activity or through collection of an unlawful debt in which such person has participated as a principal to use or invest, directly or indirectly, any part of such income, or the proceeds of such income, in acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce. A purchase of securities on the open market for purposes in investment, and without the intention of controlling or participating in the control of the issuer, or of assisting another to do so, shall not be unlawful under this paragraph if the securities of the issuer held by the purchaser, the members of the immediate family, and their accomplices in any pattern or racketeering activity or the collection of an unlawful debt after such purchase do not amount in the aggregate to one percent of the outstanding securities of any one class, and do not confer, either in law or in fact, the power to elect one or more directors of the issuer.

II. It shall be unlawful for any person through a pattern of racketeering activity or through collection of an unlawful debt to acquire or maintain, directly or indirectly, any interest in or control of any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce.

III. It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.

IV. It shall be unlawful for any person to conspire to violate any of the provisions of paragraphs I through III.

640-A:3 Criminal Penalties.

I. Whoever violates any provision of RSA 640-A:2 shall be guilty of a class A felony and, notwithstanding RSA 651:2, fined not more than $25,000 or imprisoned not more than 20 years, or both, and shall forfeit to the state:

(a) Any interest such person has acquired or maintained in violation of RSA 640-A:2 and

(b) Any interest in, security of, claim against, or property or contractual right of any kind affording a source of influence over, any enterprise which such person has established, operated, controlled, conducted, or participated in the conduct of, in violation of RSA 640-A:2.

II. In any action brought by the state of New Hampshire under this section, the superior courts of the state shall have jurisdiction to enter such restraining orders or prohibitions, or to take such other actions, including, but not limited to, the acceptance of satisfactory performance bonds, in connection with any property or other interest subject to forfeiture under this section, as the court shall deem proper.

III. Upon conviction of a person under this section, the court shall authorize the attorney general to seize all property or other interest declared forfeited under this section upon such terms and conditions as the court shall deem proper. If a property right or other interest is not exercisable or transferable for value by the state, it shall expire, and shall not revert to the convicted person. All provisions of law relating to the disposition of property, or the proceeds from the sale thereof, or the remission or mitigation of forfeitures for violation of New Hampshire laws, and the compromise of claims and the award of compensation to informers in respect of such forfeitures shall apply to forfeitures incurred, or alleged to have been incurred, under the provisions of this section. Such duties as are imposed upon any person with respect to the disposition of property shall be performed under this chapter by the attorney general. The state shall dispose of all such property as soon as commercially feasible, making due provision for the rights of innocent persons.

640-A:4 Civil Remedies.

I. The superior courts of the state shall have jurisdiction to prevent and restrain violations of RSA 640-A:2 by issuing appropriate orders, including, but not limited to:

(a) Ordering any person to divest of any interest, direct or indirect, in any enterprise;

(b) Imposing reasonable restrictions on the future activities or investments of any person, including, but not limited to, prohibiting any person from engaging in the same type of endeavor as the enterprise engaged in, the activities of which affect interstate or foreign commerce; or

(c) Ordering dissolution or reorganization of any enterprise, making due provision for the rights of innocent persons.

II. The attorney general may institute proceedings under this section. Pending final determination, the court may at any time enter such restraining orders or prohibitions, or take such other actions, including the acceptance of satisfactory performance bonds, as it shall deem proper.

III. Any persons injured in their business or property by reason of a violation of RSA 640-A:2 may sue in any appropriate superior court and shall recover threefold the damages sustained and the cost of the suit, including reasonable attorneys fees, except that no person shall rely upon any conduct that would have been actionable as fraud in the purchase or sale of securities to establish a violation of RSA 640-A:2. This exception shall not apply to an action against any person who is criminally convicted in connection with the fraud, in which case the statute of limitations shall start to run on the date on which the conviction is final.

IV. A final judgment or decree rendered in favor of the state in any criminal proceeding brought by the state under this chapter shall estop the defendant from denying the essential allegations of the criminal offense in any subsequent civil proceeding brought by the state.

640-A:5 Venue and Process.

I. Any civil action or proceeding under this chapter against any person may be instituted in the superior court of the county in which such person resides, is found, has an agent, or transacts business.

II. In any action under RSA 640-A:4 of this chapter in any superior court of the state in which it is shown that the ends of justice require that other parties residing in other counties be brought before the court, the court may cause such parties to be summoned, and process for that purpose may be served in any county of the state by the sheriff thereof.

III. In any civil or criminal action or proceeding instituted by the state under this chapter in any superior court of the state, subpoenas issued by such court to compel the attendance of witnesses may be served in any other county, except that in any civil action or proceeding no such subpoena shall be issued for service upon any individual who resides in another county at a place more than 100 miles from the place at which such court is held without approval given by a judge of such court upon a showing of good cause.

IV. All other process in any action or proceeding under this chapter may be served on any person in any county in which such person resides, is found, has an agent, or transacts business.

640-A:6 Expedition of Action. In any civil action instituted under this chapter by the state in any superior court of the state, the attorney general may file with the clerk of such court a certificate stating that in the attorney general's opinion the case is of general public importance. A copy of that certificate shall be furnished immediately by such clerk to the chief judge or, if the chief judge is absent, to the presiding district judge of the district in which such action is pending. Upon receipt of such copy, such judge shall designate immediately a judge of that district to hear and determine action.

640-A:7 Evidence. In any proceeding ancillary to or in any civil action instituted by the state under this chapter the proceedings may be open or closed to the public at the discretion of the court after consideration of the rights of affected persons.

640-A:8 Civil Investigative Demand.

I. Whenever the attorney general has reason to believe that any person or enterprise may be in possession, custody, or control of any documentary materials relevant to a racketeering investigation, the attorney general may, prior to the institution of a civil or criminal proceeding thereon, issue in writing, and cause to be served upon such person, a civil investigative demand requiring such person to produce such material for examination.

II. Each such demand shall:

(a) State the nature of the conduct constituting the alleged racketeering violation which is under investigation and the provision of law applicable thereto.

(b) Describe the class or classes of documentary material produced thereunder with such definiteness and certainty as to permit such material to be fairly identified.

(c) State that the demand is returnable immediately or proscribe a return date which will provide a reasonable period of time within which the material so demanded may be assembled and made available for inspection and copying or reproduction; and

(d) Identify the custodian to whom such material shall be made available.

III. No such demand shall:

(a) Contain any requirement which would be held to be unreasonable if contained in a subpoena duces tecum issued by a court of the state in aid of a grand jury investigation of such alleged racketeering violation, or

(b) Require the production of any documentary evidence which would be privileged from disclosure if demanded by a subpoena duces tecum issued by a court of the state in aid of a grand jury investigation of such alleged racketeering violation.

IV. Service of any such demand or any petition filed under this section may be made upon a person by:

(a) Delivering a duly executed copy thereof to any partner, executive officer, managing agent, or general agent thereof, or to any agent thereof authorized by appointment or by law to receive service of process on behalf of such person, or upon any individual person.

(b) Delivering a duly executed copy thereof to the principal office or place of business of the person to be serviced, or

(c) Depositing such copy in the United States mail, by registered or certified mail duly addressed to such person at its principal office or place of business.

V. A verified return by the individual serving any such demand or petition setting forth the manner of such service shall be prima facie proof of such service. In the case of service by registered or certified mail, such return shall be accompanied by the return post office receipt of delivery of such demand.

VI.(a) The attorney general shall designate a racketeering investigator to serve as racketeer document custodian, and such additional racketeering investigators as shall be determined from time to time to be necessary to serve as deputies to such officer.

(b) Any person, upon whom any demand issued under this section has been duly served shall make such material available for inspection and copying or reproduction to the custodian designated therein at the principal place of business of such person, or at such other place as such custodian and such person may agree and prescribe in writing or as the court may direct, pursuant to this section on the return date specified in such demand, or on such later date as such custodian may prescribe in writing. Such person may upon written agreement between such person and the custodian substitute for copies of all or any part of such material originals of the material.

(c) The custodian to whom any documentary material is so delivered shall take physical possession thereof, and shall be responsible for the use made thereof and for the return thereof pursuant to this chapter. The custodian shall cause the preparation of such copies of such documentary material as are required for official use under rules adopted pursuant to RSA 541-A by the attorney general. While in the possession of the custodian, no material so produced shall be available for examination, without the consent of the person who produced such material, by any individual other than the attorney general. Under such reasonable terms and conditions as the attorney general shall prescribe, documentary material while in the possession of the custodian shall be available for examination by the person who produced such material or any duly authorized representatives of such person.

(d) Whenever any attorney has been designated to appear on behalf of the state before any court or grand jury in any case or proceeding involving any alleged violation of this chapter, the custodian shall deliver to such attorney such documentary material in the possession of the custodian as such attorney determines to be required for use in the presentation of such case or proceeding on behalf of the state. Upon the conclusion of any such case or proceeding, such attorney shall return to the custodian any documentary material so withdrawn which has not passed into the control of such court or grand jury through the introduction thereof into the record of such case of proceeding.

(e) Upon the completion of:

(1) The racketeering investigation for which any documentary material was produced under this chapter, and

(2) Any case or proceeding arising from such investigation, the custodian shall return to the person who produced such material all such material other than copies made by the attorney general pursuant to this paragraph which have not passed into the control of any court or grand jury through the introduction of such material into the record of such case or proceeding.

(f) When any documentary material has been produced by any person under this section for use in any racketeering investigation, and no such case or proceeding arising therefrom has been instituted within a reasonable time after completion of the examination and analysis of all evidence assembled in the course of such investigation, such person shall be entitled, upon written demand made upon the attorney general, to the return of all documentary material other than copies of material made pursuant to this paragraph.

(g) In the event of the death, disability, or separation from service of the custodian of any documentary material produced under any demand issued under this section or the official relief of such custodian from responsibility for the custody and control of such material, the attorney general shall promptly:

(1) Designate another racketeering investigator to serve as custodian thereof, and

(2) Transmit notice in writing to the person who produced such material as to the identity and address of the successor so designated.

Any successor so designated shall have with regard to such materials all duties and responsibilities imposed by this section upon the predecessor in office with regard thereto, except that the successor shall not be held responsible for any default or dereliction which occurred before the successor's designation as custodian.

VII. Whenever any person fails to comply with any civil investigative demand duly served upon such person under this section or whenever satisfactory copying or reproduction of any such material cannot be done and such person refuses to surrender such material, the attorney general may file, in the superior court of the state for any county in which such person resides, is found, or transacts business, and serve upon such person a petition for an order of such court for the enforcement of this section, except that if such person transacts business in more than one such county such petition shall be filed in the county in which such person maintains a principal place of business, or in such other county in which such person transacts business as may be agreed upon by the parties to such petition.

VIII. Within 20 days after the service of any such demand upon any person, or at any time before the return date specified in the demand, whichever period is shorter, such person may file, in the superior court of the state for the county within which such person resides, is found, or transacts business, and serve upon such custodian a petition for an order of such court modifying or setting aside such demand. The time allowed for compliance with the demand in whole or in part as deemed proper and ordered by the court shall not run during the pendency of such petition in the court. Such petition shall specify each ground upon which the petitioner relies in seeking such relief, and may be based upon any failure of such demand to comply with the provisions of this section or upon any constitutional or other legal right or privilege of such person.

IX. At any time during which any custodian is in custody or control of any documentary material delivered by any person in compliance with any such demand, such person may file, in the superior court of the state for the county within which the office of such custodian is situated, and serve upon such custodian a petition for an order of such court requiring the performance by such custodian of any duty imposed by this section.

X. Whenever any petition is filed in any superior court of the state under this section, such court shall have jurisdiction to hear and determine the matter so presented, and to enter such order or orders as may be required to carry into effect the provisions of this chapter.

2 Effective Date. This act shall take effect January 1, 1999.

LBAO

98-2355

12/16/97

HB 1557-FN - FISCAL NOTE

AN ACT establishing the New Hampshire racketeer influenced and corrupt organizations act.

FISCAL IMPACT:

The Administrative Office of the Courts, Judicial Council, Department of Corrections and Department of Justice have stated this bill may increase state expenditures by an indeterminable amount in FY 1999 and each year thereafter. There will be no impact on county and local expenditures or state, county and local revenues.

METHODOLOGY:

The Administrative Office of the Courts states that to the extent this bill creates a new category of Class A felony offense, the caseload at the superior court will increase. The AOC estimates a Class A felony will result in an average one week trial. However, it is impossible to estimate the number of criminal cases that might potentially be brought to trial. Therefor, the AOC is unable to predict the additional costs to the Judicial Branch although it is reasonable to assume additional costs associated with judge and administrative staff time due to increased criminal caseload. In addition, the bill provides for civil remedies with jurisdiction in the superior court. This bill provides for expedited civil trials in some cases. It is reasonable to assume additional costs associated with judge and administrative time in these civil cases.

The Judicial Council does not expect a large number of cases to arise under the provisions of this bill, where the party would be indigent. This bill provides for forfeiture of assets, and the defendants usually have sufficient assets to obtain their own counsel. If, however, any case were brought, the standard contract attorney rate of $605 would apply for both public defender and contract attorneys. Otherwise, the court rate of $60 per hour for assigned counsel attorneys apply. A case of this nature due to its complexities could result in the contract attorney being eligible for extraordinary case credit.

The Department of Corrections is unable to predict how many, if any, people would be incarcerated as a result of this legislation. The average cost of incarceration for FY 1997 was $19,056 per inmate. The average cost of probation/parole for FY 1997 was $825 per offender.

The Department of Justice has stated that although this bill places requirements on the attorney general, they are unable to determine if this could be done by existing staff or if new staff would be necessary.