Minnesota Session Laws - 1989, Regular Session

  

                         Laws of Minnesota 1989 

                        CHAPTER 286-H.F.No. 837 
           An act relating to crimes; prohibiting the concealing 
          of criminal proceeds; prohibiting racketeering; 
          providing civil and criminal penalties for engaging in 
          narcotics and violent offenses as part of an 
          enterprise; authorizing the dissolution of a corporate 
          charter, revocation of a license, and injunctive 
          relief to prevent criminal activity by an enterprise; 
          authorizing fines of three times the profit gained 
          through racketeering; authorizing criminal forfeiture; 
          amending Minnesota Statutes 1988, section 541.07; 
          proposing coding for new law in Minnesota Statutes, 
          chapters 541 and 609. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
     Section 1.  Minnesota Statutes 1988, section 541.07, is 
amended to read: 
    541.07 [TWO OR THREE YEAR LIMITATIONS.] 
    Except where the uniform commercial code or this section 
otherwise prescribes, the following actions shall be commenced 
within two years: 
    (1) For libel, slander, assault, battery, false 
imprisonment, or other tort, resulting in personal injury, and 
all actions against physicians, surgeons, dentists, other health 
care professionals as defined in section 145.61, and 
veterinarians as defined in chapter 156, hospitals, sanitariums, 
for malpractice, error, mistake or failure to cure, whether 
based on contract or tort; provided a counterclaim may be 
pleaded as a defense to any action for services brought by a 
physician, surgeon, dentist or other health care professional or 
veterinarian, hospital or sanitarium, after the limitations 
herein described notwithstanding it is barred by the provisions 
of this chapter, if it was the property of the party pleading it 
at the time it became barred and was not barred at the time the 
claim sued on originated, but no judgment thereof except for 
costs can be rendered in favor of the party so pleading it; 
    (2) Upon a statute for a penalty or forfeiture, except as 
provided in section 2; 
    (3) For damages caused by a dam, other than a dam used for 
commercial purposes; but as against one holding under the 
preemption or homestead laws, the limitations shall not begin to 
run until a patent has been issued for the land so damaged; 
    (4) Against a master for breach of an indenture of 
apprenticeship; the limitation runs from the expiration of the 
term of service; 
     (5) For the recovery of wages or overtime or damages, fees 
or penalties accruing under any federal or state law respecting 
the payment of wages or overtime or damages, fees or penalties 
except, that if the employer fails to submit payroll records by 
a specified date upon request of the department of labor and 
industry or if the nonpayment is willful and not the result of 
mistake or inadvertence, the limitation is three years.  (The 
term "wages" means all remuneration for services or employment, 
including commissions and bonuses and the cash value of all 
remuneration in any medium other than cash, where the 
relationship of master and servant exists and the term 
"damages," means single, double, or treble damages, accorded by 
any statutory cause of action whatsoever and whether or not the 
relationship of master and servant exists); 
     (6) For damages caused by the establishment of a street or 
highway grade or a change in the originally established grade; 
     (7) For sales or use taxes imposed by the laws of any other 
state; 
     (8) Against the person who applies the pesticide for injury 
or damage to property resulting from the application, but not 
the manufacture or sale, of a pesticide. 
    Sec. 2.  [541.074] [CIVIL REMEDY IN RACKETEERING CASES.] 
    A civil proceeding under section 14 shall be commenced 
within five years. 
     Sec. 3.  [609.496] [CONCEALING CRIMINAL PROCEEDS.] 
    Subdivision 1.  [CRIME.] A person is guilty of a felony and 
may be sentenced under subdivision 2 if the person: 
    (1) conducts a transaction involving a monetary instrument 
or instruments with a value exceeding $5,000; and 
    (2) knows or has reason to know that the monetary 
instrument or instruments represent the proceeds of, or are 
derived from the proceeds of, the commission of a felony under 
this chapter or chapter 152 or an offense in another 
jurisdiction that would be a felony under this chapter or 
chapter 152 if committed in Minnesota. 
    Subd. 2.  [PENALTY.] A person convicted under subdivision 1 
may be sentenced to imprisonment for not more than ten years, or 
to payment of a fine of not more than $100,000, or both. 
    Subd. 3.  [MONETARY INSTRUMENT.] For purposes of this 
section, "monetary instrument" means United States currency and 
coin; the currency and coin of a foreign country; a bank check, 
cashier's check, traveler's check, money order, stock, 
investment security, or negotiable instrument in bearer form or 
otherwise in the form by which title to the instrument passes 
upon delivery; gold, silver, or platinum bullion or coins; and 
diamonds, emeralds, rubies, or sapphires. 
    Subd. 4.  [PAYMENT OF REASONABLE ATTORNEY FEES.] 
Subdivision 1 does not preclude the payment or receipt of 
reasonable attorney fees. 
    Sec. 4.  [609.497] [ENGAGING IN A BUSINESS OF CONCEALING 
CRIMINAL PROCEEDS.] 
    Subdivision 1.  [CRIME.] A person is guilty of a felony and 
may be sentenced under subdivision 2 if the person knowingly 
initiates, organizes, plans, finances, directs, manages, 
supervises, or otherwise engages in a business that has as a 
primary or secondary purpose concealing money or property that 
was gained as a direct result of the commission of a felony 
under this chapter or chapter 152, or of an offense committed in 
another jurisdiction that would be a felony under this chapter 
or chapter 152 if committed in Minnesota.  
    Subd. 2.  [PENALTY.] A person convicted under subdivision 1 
may be sentenced to imprisonment for not more than 20 years, or 
to payment of a fine of not more than $1,000,000, or both. 
     Sec. 5.  [609.901] [CONSTRUCTION OF RACKETEERING 
PROVISIONS.] 
    Sections 6 to 15 shall be liberally construed to achieve 
their remedial purposes of curtailing racketeering activity and 
controlled substance crime and lessening their economic and 
political power in Minnesota. 
    Sec. 6.  [609.902] [DEFINITIONS.] 
    Subdivision 1.  [DEFINITIONS.] As used in sections 5 to 15, 
the following terms have the meanings given them.  
    Subd. 2.  [CRIMINAL PROCEEDING.] "Criminal proceeding" 
means a criminal proceeding begun under section 7.  
    Subd. 3.  [ENTERPRISE.] "Enterprise" means a sole 
proprietorship, partnership, corporation, trust, or other legal 
entity, or a union, governmental entity, association, or group 
of persons, associated in fact although not a legal entity, and 
includes illicit as well as legitimate enterprises.  
    Subd. 4.  [CRIMINAL ACT.] "Criminal act" means conduct 
constituting, or a conspiracy or attempt to commit, a felony 
violation of chapter 152, or a felony violation of section 
297D.09; 299F.79; 299F.80; 299F.811; 299F.815; 299F.82; 609.185; 
609.19; 609.195; 609.20; 609.205; 609.221; 609.222; 609.223; 
609.2231; 609.228; 609.235; 609.245; 609.25; 609.27; 609.322; 
609.323; 609.342; 609.343; 609.344; 609.345; 609.42; 609.48; 
609.485; 609.495; sections 3 and 4; 609.498; 609.52, subdivision 
3, clause (3)(b), or clause (4)(e) or (f); 609.53; 609.561; 
609.562; 609.582, subdivision 1 or 2; 609.67; 609.687; 609.713; 
609.86; 624.713; or 624.74. 
    Subd. 5.  [PARTICIPATION IN A PATTERN OF CRIMINAL 
ACTIVITY.] A person "participates in a pattern of criminal 
activity" when the person is a principal with respect to conduct 
constituting at least three of the criminal acts included in the 
pattern and two of the acts constitute felonies other than 
conspiracy.  
    Subd. 6.  [PATTERN OF CRIMINAL ACTIVITY.] "Pattern of 
criminal activity" means conduct constituting three or more 
criminal acts that: 
    (1) were committed within ten years of the commencement of 
the criminal proceeding; 
    (2) are neither isolated incidents, nor so closely related 
and connected in point of time or circumstance of commission as 
to constitute a single criminal offense; and 
    (3) were either:  (i) related to one another through a 
common scheme or plan or a shared criminal purpose or (ii) 
committed, solicited, requested, importuned, or intentionally 
aided by persons acting with the mental culpability required for 
the commission of the criminal acts and associated with or in an 
enterprise involved in those activities. 
    Subd. 7.  [PERSONAL PROPERTY.] "Personal property" includes 
personal property, an interest in personal property, or a right, 
including a bank account, debt, corporate stock, patent, or 
copyright.  Personal property and a beneficial interest in 
personal property are deemed to be located where the trustee is, 
the personal property is, or the instrument evidencing the right 
is.  
    Subd. 8.  [PRINCIPAL.] "Principal" means a person who 
personally engages in conduct constituting a violation or who is 
criminally liable under section 609.05 for the conduct of 
another constituting a violation.  
    Subd. 9.  [PROSECUTING AUTHORITY.] "Prosecuting authority" 
means the office of a county attorney or office of the attorney 
general.  
    Subd. 10.  [REAL PROPERTY.] "Real property" means any real 
property or an interest in real property, including a lease of, 
or mortgage on, real property.  A beneficial interest in real 
property is deemed to be located where the real property is 
located.  
    Sec. 7.  [609.903] [RACKETEERING.] 
    Subdivision 1.  [CRIME.] A person is guilty of racketeering 
if the person: 
    (1) is employed by or associated with an enterprise and 
intentionally conducts or participates in the affairs of the 
enterprise by participating in a pattern of criminal activity; 
    (2) acquires or maintains an interest in or control of an 
enterprise, or an interest in real property, by participating in 
a pattern of criminal activity; or 
    (3) participates in a pattern of criminal activity and 
knowingly invests any proceeds derived from that conduct, or any 
proceeds derived from the investment or use of those proceeds, 
in an enterprise or in real property. 
    Subd. 2.  [PERMITTED ACTIVITIES.] For purposes of this 
section, it is not unlawful to: 
    (1) purchase securities on the open market with intent to 
make an investment, and without the intent of controlling or 
participating in the control of the issuer, or of assisting 
another to do so, if the securities of the issuer held by the 
purchaser, the members of the purchaser's immediate family, and 
the purchaser's accomplices in a pattern of criminal activity do 
not amount in the aggregate to five percent of the outstanding 
securities of any one class and do not confer, either in the law 
or in fact, the power to elect one or more directors of the 
issuer; 
    (2) make a deposit in an account maintained in a savings 
and loan association, or a deposit in any other financial 
institution, that creates an ownership interest in that 
association or institution; or 
    (3) purchase nonvoting shares in a limited partnership, 
with intent to make an investment, and without the intent of 
controlling or participating in the control of the partnership. 
    Sec. 8.  [609.904] [CRIMINAL PENALTIES.] 
    Subdivision 1.  [PENALTY.] A person convicted of violating 
section 7 may be sentenced to imprisonment for not more than 20 
years or to payment of a fine of not more than $1,000,000, or 
both.  
    Subd. 2.  [FINE.] In lieu of the fine authorized by 
subdivision 1, a person convicted of violating section 7, who 
received economic gain from the act or caused economic loss or 
personal injury during the act, may be sentenced to pay a fine 
calculated under this subdivision.  The maximum fine is three 
times the gross value gained or three times the gross loss 
caused, whichever is greater, plus court costs and the costs of 
investigation and prosecution reasonably incurred, less the 
value of any property forfeited under section 9.  The district 
court shall hold a hearing to determine the amount of the fine 
authorized by this subdivision.  In imposing a fine, the court 
shall consider the seriousness of the conduct, whether the 
amount of the fine is disproportionate to the conduct in which 
the person engaged, its impact on victims and any legitimate 
enterprise involved in that conduct, as well as the economic 
circumstances of the convicted person, including the effect of 
the imposition of the fine on the person's immediate family.  
For purposes of this subdivision, loss does not include pain and 
suffering. 
    Subd. 3.  [INJUNCTIVE RELIEF.] After the entry of a 
judgment that includes a fine or an order of criminal forfeiture 
under section 9, the district court may enter a restraining 
order or injunction, require the execution of a satisfactory 
performance bond, or take other action, including the 
appointment of a receiver, that the court deems proper to 
protect the interests of the prosecuting authority in collecting 
the money or forfeiture or an innocent party.  
    Subd. 4.  [DISPOSITION OF FINE PROCEEDS.] The court shall 
apply fines collected under this section to the costs and 
expenses of investigation and prosecution, including costs of 
resources and personnel incurred in investigation and 
prosecution and the balance, if any, as provided under section 
574.34.  
    Subd. 5.  [RESTITUTION.] In a settlement discussion or 
before the imposition of a sentence under this section, the 
prosecuting authority shall vigorously advocate full and 
complete restitution to an aggrieved person.  Before the 
acceptance of a plea or after a verdict but before the 
imposition of a sentence under this section, the district court 
must ensure that full and complete restitution has been duly 
effected or that a satisfactory explanation of why it is 
impractical has been made to the court.  
    Sec. 9.  [609.905] [CRIMINAL FORFEITURE.] 
    Subdivision 1.  [FORFEITURE.] When a person is convicted of 
violating section 7, the court may order the person to forfeit 
to the prosecuting authority any real or personal property 
subject to forfeiture under this section.  Property subject to 
forfeiture is real and personal property that was used in the 
course of, intended for use in the course of, derived from, or 
realized through conduct in violation of section 7.  A court may 
not order the forfeiture of property that has been used to pay 
reasonable attorney fees in connection with a criminal 
proceeding under section 7.  The term includes property 
constituting an interest in or means of control or influence 
over the enterprise involved in the violation of section 6 and 
any property constituting proceeds derived from the violation of 
section 6, including:  
    (1) a position, office, appointment, tenure, commission, or 
employment contract that was acquired or maintained in violation 
of section 7 or through which the person conducted or 
participated in the conduct of the affairs of an enterprise in 
violation of section 7 or that afforded the person a source of 
influence or control over the affairs of an enterprise that the 
person exercised in violation of section 7; 
    (2) any compensation, right, or benefit derived from a 
position, office, appointment, tenure, commission, or employment 
contract described in this section that accrued to the person 
during the period of conduct in violation of section 7; 
    (3) any interest in, security of, claim against, or 
property or contractual right affording the person a source of 
influence or control over the affairs of an enterprise that the 
person exercised in violation of section 7; and 
    (4) any amount payable or paid under any contract for goods 
or services that was awarded or performed in violation of 
section 7.  
    Subd. 2.  [OTHER PROPERTY OF DEFENDANT.] The district court 
may order criminal forfeiture of any other property of the 
defendant up to the value of the property that is unreachable if 
any property subject to criminal forfeiture under subdivision 1: 
    (1) cannot be located; 
    (2) has been sold to a bona fide purchaser for value; 
    (3) has been placed beyond the jurisdiction of the court; 
    (4) has been substantially diminished in value by the 
conduct of the defendant; 
    (5) has been commingled with other property that cannot be 
divided without difficulty or undue injury to innocent persons; 
or 
    (6) is otherwise unreachable without undue injury to an 
innocent person.  
    Sec. 10.  [609.907] [PRESERVATION OF PROPERTY SUBJECT TO 
FORFEITURE.] 
    Subdivision 1.  [TEMPORARY RESTRAINING ORDER.] (a) When an 
indictment or complaint is filed under section 7, the district 
court may take any of the following actions if the prosecuting 
authority shows by a preponderance of the evidence that the 
action is necessary to preserve the reachability of property 
subject to criminal forfeiture: 
    (1) enter a restraining order or injunction; 
    (2) require the execution of a satisfactory performance 
bond; or 
    (3) take any other reasonable action, including the 
appointment of a receiver. 
    (b) Before granting the remedies provided by this 
subdivision, the court shall hold a hearing, after notice to all 
affected persons, giving them a reasonable opportunity to 
respond.  At the hearing, the rules of evidence do not apply. 
    Subd. 2.  [PREINDICTMENT ORDER.] (a) If no indictment or 
complaint has been filed, the district court may take actions 
provided in subdivision 1 if the prosecuting authority makes the 
showing required by subdivision 1 and also shows that:  
    (1) there is probable cause to believe that the property 
with respect to which the order is sought would, in the event of 
a conviction, be subject to criminal forfeiture under section 8; 
and 
    (2) the requested order would not result in substantial and 
irreparable harm or injury to the party against whom the order 
is to be entered, or to other affected persons, that outweighs 
the need to preserve the reachability of the property.  
    (b) An order entered under this subdivision is effective 
for a maximum of 90 days unless: 
    (1) extended by the district court for good cause; or 
    (2) terminated by the filing of an indictment or complaint 
alleging that the property is subject to forfeiture. 
    Subd. 3.  [RESTRAINING ORDER WITHOUT NOTICE.] (a) On 
application by the prosecuting authority, the district court may 
grant, without notice to any party, a temporary restraining 
order to preserve the reachability of property subject to 
criminal forfeiture under section 9 if:  
    (1) an indictment or complaint alleging that property is 
subject to criminal forfeiture has been filed or the district 
court determines that there is probable cause to believe that 
property with respect to which the order is sought would, in the 
event of a conviction, be subject to criminal forfeiture under 
section 9; 
    (2) the property is in the possession or control of the 
party against whom the order is to be entered; and 
    (3) the district court makes a specific finding in writing 
that the property can be concealed, disposed of, or placed 
beyond the jurisdiction of the court before any party may be 
heard in opposition.  
    (b) A temporary restraining order granted without notice to 
any party under this subdivision expires within the time fixed 
by the court, not to exceed ten days.  The court may extend the 
order for good cause shown, or if the party against whom it is 
entered consents to an extension.  After a temporary restraining 
order is granted under this subdivision, a hearing concerning 
the entry of an order under this section shall be held at the 
earliest practicable time and before the temporary order expires.
    Sec. 11.  [609.908] [DISPOSITION OF FORFEITURE PROCEEDS.] 
    Subdivision 1.  [DISPOSITION ALTERNATIVES.] After making 
due provisions for the rights of innocent persons, the 
prosecuting authority shall, as soon as feasible, dispose of all 
property ordered forfeited under section 9 by: 
    (1) public sale; 
    (2) transfer to a state governmental agency for official 
use; 
    (3) sale or transfer to an innocent person; or 
    (4) destruction, if the property is not needed for evidence 
in a pending criminal or civil proceeding. 
    Subd. 2.  [NO REVERSION TO DEFENDANT.] An interest in 
personal or real property not exercisable by or transferable for 
value by the prosecuting authority expires and does not revert 
to the defendant.  Forfeited property may not be purchased by 
the defendant, relative of the defendant, or any person acting 
in concert with the defendant or on the defendant's behalf. 
    Subd. 3.  [SALE PROCEEDS.] The proceeds of a sale or other 
disposition of forfeited property under this section whether by 
final judgment, settlement, or otherwise, must be applied as 
follows: 
    (1) to the fees and costs of the forfeiture and sale 
including expenses of seizure, maintenance, and custody of the 
property pending its disposition, advertising, and court costs; 
    (2) to all costs and expenses of investigation and 
prosecution including costs of resources and personnel incurred 
in investigation and prosecution; and 
    (3) the balance to the appropriate agencies under section 
609.5315, subdivision 5. 
    Sec. 12.  [609.909] [ADDITIONAL RELIEF AVAILABLE.] 
    With respect to property ordered forfeited, fine imposed, 
or civil penalty imposed in a criminal proceeding under section 
7 or civil proceeding under section 14, the district court may, 
on petition of the prosecuting authority or any other person 
within 60 days of a final order: 
    (1) authorize the compromise of claims; 
    (2) award compensation to persons providing information 
that results in a forfeiture under section 9; 
    (3) grant petitions for mitigation or remission of 
forfeiture or fines; 
    (4) restore forfeited property or imposed fines to victims 
of a violation of section 7; and 
    (5) take any other action to protect the rights of innocent 
persons that is in the interest of justice and is consistent 
with the purposes of sections 5 to 15. 
    Sec. 13.  [609.910] [RELATION TO OTHER SANCTIONS.] 
    Subdivision 1.  [REMEDY NOT EXCLUSIVE.] Except as provided 
in this section, a criminal penalty, forfeiture, or fine imposed 
under section 7, 8, 9, or 14 does not preclude the application 
of any other criminal penalty or civil remedy for the separate 
criminal acts.  A prosecuting authority may not file a civil 
action under section 14 if any prosecuting authority has filed a 
previous criminal proceeding under section 7 against the same 
person based on the same criminal conduct and the charges were 
dismissed after jeopardy attached or the person acquitted.  
    Subd. 2.  [RESTITUTION.] A restitution payment to a victim 
under section 8 does not limit the liability for damages in a 
civil action or proceeding for an amount greater than the 
restitution payment. 
    Sec. 14.  [609.911] [CIVIL REMEDIES.] 
    Subdivision 1.  [RELIEF AVAILABLE.] The prosecuting 
authority may institute civil proceedings in district court 
against a person seeking relief from conduct constituting a 
violation of section 7 or to prevent or restrain future 
violations.  If the prosecuting authority proves the alleged 
violation by a preponderance of the evidence, and the court has 
made due provision for the rights of innocent persons, the court 
may: 
    (1) order a defendant to divest an interest in an 
enterprise or in real property; 
    (2) impose reasonable restrictions on the future activities 
or investments of a defendant, including prohibiting a defendant 
from engaging in the same type of endeavor as the enterprise in 
which the defendant was engaged in violation of section 7; 
    (3) order the dissolution or reorganization of an 
enterprise; 
    (4) order the suspension or revocation of a license, 
permit, or prior approval granted to an enterprise by a state 
agency; or 
    (5) order the surrender of the charter of a corporation 
organized under Minnesota law, dissolution of an enterprise, or 
the revocation of a certificate authorizing a foreign 
corporation to conduct business in Minnesota, if the court finds 
that:  
    (i) the board of directors or a managerial agent acting on 
behalf of the corporation, in conducting the affairs of the 
corporation, authorized or engaged in conduct prohibited by 
section 7; and 
    (ii) the public interest in preventing future criminal 
conduct requires the action. 
    Subd. 2.  [INJUNCTIVE RELIEF.] In a proceeding under this 
section, the court may grant injunctive relief. 
    Subd. 3.  [CIVIL PENALTY.] The prosecuting authority may 
institute proceedings against an enterprise or an individual to 
recover a civil penalty.  The penalty may be imposed in the 
discretion of the district court for conduct constituting a 
violation of section 7.  The civil penalty may not exceed 
$1,000,000 less a fine imposed under section 7.  Penalties 
collected under this section must be applied to the costs and 
expenses of investigation and prosecution, including costs of 
resources and personnel incurred in investigation and 
prosecution, and the balance, if any, to the state general fund. 
    Subd. 4.  [ATTORNEY FEES.] If the district court issues an 
injunction, or grants other relief under this section, or the 
prosecuting authority otherwise substantially prevails, the 
prosecuting authority shall also recover reasonable attorney 
fees in the trial and appellate courts and costs of 
investigation and litigation reasonably incurred.  
    Subd. 5.  [PERSONAL JURISDICTION.] Personal service of 
process in a proceeding under this section may be made on any 
person outside of Minnesota if the person was a principal in any 
conduct constituting a violation of section 7 in this state.  
The person is deemed to have submitted to the jurisdiction of 
the courts of this state for the purposes of this section. 
    Sec. 15.  [609.912] [NOTICE TO OTHER PROSECUTING 
AUTHORITIES.] 
    When a county attorney begins an investigation involving 
sections 5 to 14, the county attorney shall notify the attorney 
general.  When the attorney general begins an investigation 
involving sections 5 to 14, the attorney general shall notify 
the county attorney of each county in which a substantial part 
of the investigation is likely to be conducted. 
    Sec. 16.  [EFFECTIVE DATE.] 
    Sections 1 to 15 are effective August 1, 1989, and apply to 
crimes committed on or after that date. 
    Presented to the governor May 30, 1989 
    Signed by the governor June 1, 1989, 10:43 p.m.