303-837-9800

Stacks Image 1030
Stacks Image 1069

Blog

To view the archive, click here.

Search

Archives

COCCA Charges: Colorado's RICO used in Marijuana and White Collar Offenses

In the last blog post in this series we talked about the practice of prosecutors piling on COCCA charges and penalties for members of the Marijuana industry. In this post we are discussing the common COCCA charges themselves. COCCA charges are commonly used in both Marijuana and white collar criminal cases and as we discussed, carry significant prison sentences and fines. In the next blog post we will explore the offenses used as “predicate offenses” by prosecutors in order to establish “a pattern of racketeering activity”. As we discussed in the previous post, it takes two predicate offenses in order to establish a pattern of racketeering activity in order to charge the COCCA statute at all.

There are four basic COCCA charges available to prosecutors. These charges range from using proceeds of illegal activity to merely being employed by an organization engaged in a pattern racketeering activity.

The first charge available is Colorado Revised Statute section 18-17-104(1)(a), entitled "Use of Proceeds." Here is what the statute says:

“(1)(a) It is unlawful for any person who knowingly has received any proceeds derived, directly or indirectly, from a pattern of racketeering activity or through the collection of an unlawful debt to use or invest, whether directly or indirectly, any part of such proceeds or the proceeds derived from the investment or use thereof in the acquisition of any title to, or any right, interest, or equity in, real property or in the establishment or operation of any enterprise.”

What this means is that it is illegal for a person to knowingly i) receive any money that was obtained through “a pattern of racketeering activity” and ii) use that money to buy property or make any investment. If money is deemed to be proceeds of “a pattern of racketeering activity,” any use of that money for things like buying stocks, bonds, or investing in property is illegal under this statute.

This charge is often used when an enterprise or a member of an enterprise reinvests money that they obtained illegally. For instance, if a company executive is charged with securities fraud for allegedly making false statements to an investor, any money they obtained from the investment and put back into their company could be deemed unlawful under this statute.

The second charge available is Colorado Revised Statute section 18-17-104(2), entitled "Acquiring an Interest." The statute reads as follows:

“(2) It is unlawful for any person, through a pattern of racketeering activity or through the collection of an unlawful debt, to knowingly acquire or maintain, directly or indirectly, any interest in or control of any enterprise or real property.”

What this means is that it is illegal to obtain property or make an investment in property through a pattern of racketeering activity. This charge is often used when a member of an enterprise uses illegal funds to acquire property or an ownership interest in another company. For instance, if a company executive is charged with laundering money by purchasing an outside shell company, they could also be facing this COCCA charge for acquiring an interest through a pattern of racketeering activity.

The third COCCA charge available is Colorado Revised Statute section 18-17-104(3), entitled "Employed by, or Associated with, an Enterprise." The statute says the following:

“(3) It is unlawful for any person employed by, or associated with, any enterprise to knowingly conduct or participate, directly or indirectly, in such enterprise through a pattern of racketeering activity or the collection of an unlawful debt.”

What this means is that it is illegal to be employed or participate in an enterprise that engages in a pattern of racketeering activity. This charge is sometimes used against the accountants at an organization who had some knowledge that the executives were cooking the books or engaged in some other illegal activity. Charges like this are used as leverage over lower level employees to get them to turn on their bosses in a grand jury investigation.

The final COCCA charge and possibly the one used most frequently is 18-17-104(4), entitled "Conspiracy." The statue reads:

“(4) It is unlawful for any person to conspire or endeavor to violate any of the provisions of subsection (1), (2), or (3) of this section.”

This provision makes it a crime to conspire to commit any of the charges mentioned above. A person need not actually engage in the illegal activity of the first three offenses to be charged under the COCCA Conspiracy charge. For purposes of this charge, an individual might not have engaged in the pattern of racketeering activity at all. It is sufficient to charge a person under this statute if they had some verbal agreement with others who engaged in underlying fraud, money laundering, etc. So long as some party to the conspiracy took steps in furtherance of the fraud, everyone who agreed to the action can be charged.

Each count of a COCCA charge carries a presumptive prison sentence of 8-24 years and a fine of up to $25,000. Frequently, prosecutors use these charges as a negotiating chip to get corporate executives and lower level employees to turn on each other. This typically happens when the prosecutor subpoenas everyone in the company to testify in front of a grand jury. In Colorado, however, a person has a right to an attorney during the grand jury process, and competent legal representation can reduce your odds of going to prison on COCCA charges.

Our next post will discuss the common “predicate offenses” used by prosecutors to establish “a pattern of racketeering activity.”

Examples of COCCA Cases:

https://www.denverda.org/wp-content/uploads/news-release/2015/Johnson--Coombes-sentencing.pdf

https://www.denverda.org/wp-content/uploads/news-release/2010/Mazhidov-indictment.pdf

https://www.denverda.org/wp-content/uploads/news-release/2007/Romero-pleads-guilty.pdf

https://www.denverda.org/wp-content/uploads/news-release/2006/Sarrasin--Adams-and-Stesney-indictment.pdf

http://www.da5.us/2016/08/woman-pleads-guilty-and-sentenced-to-18-years-in-prison-for-racketeering-in-bank-fraud-spree-across-western-colorado/

http://denver.cbslocal.com/2014/07/30/8-indicted-in-900000-racketeering-scheme/

Disclaimer: The information in this blog is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this blog should be construed as legal advice from The Eichner Law Firm or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this blog should act or refrain from acting on the basis of any information included in, or accessible through, this blog without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country, or other appropriate licensing jurisdiction.