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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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NO. 93-5783
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JAGUAR CARS INC.
v.
ROYAL OAKS MOTOR CAR COMPANY, INC.;
THEODORE J. FORHECZ, SR.;
MARK FORHECZ;
THEODORE J. FORHECZ, JR.;
RICHARD KIRSH; JACK RUSHER;
EDWARD ZELLER
          Mark M. Forhecz, Appellant
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No. 93-5784
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JAGUAR CARS INC.
v.
ROYAL OAKS MOTOR CAR COMPANY, INC.;
THEODORE J. FORHECZ, SR.;
MARK FORHECZ;
THEODORE J. FORHECZ, JR.;
RICHARD KIRSH; JACK RUSHER;
EDWARD ZELLER
          Theodore J. Forhecz, Sr., Appellant
_____________________________________
On Appeal From the United States District Court
For the District of New Jersey
(D.C. Civ. No. 91-cv-02014)
_____________________________________
Argued: July 25, 1994
Before:  BECKER, ALITO, Circuit Judges,
and BRODY, District Judge.
(Filed January 18, 1995)
                         CARL J. CHIAPPA, ESQUIRE (Argued)
                         Townley & Updike
                         450 Lexington Avenue
                         New York,  NY  10174
                         Attorney for Jaguar Cars
                         GARY R. BATTISTONI, ESQUIRE (Argued)
                         Drinker, Biddle & Reath
                         1345 Chestnut Street
                         Philadelphia National Bank Bldg.
                         Philadelphia, PA  19107-3496
                         Attorney for Theodore J. Forhecz, Sr.
                         MARTIN G. MARGOLIS, ESQUIRE (Argued)
                         STUART  POBERESKIN, ESQUIRE
                         Margolis, Meshulam & Pobereskin
                         60 Pompton Avenue
                         Verona, New Jersey  07044
                         Attorney for Mark M. Forhecz
                  ____________________________
                      OPINION OF THE COURT
                  ____________________________
BECKER, Circuit Judge.
          This appeal arises out of a civil RICO action, 18
U.S.C.A.  1951 et. seq. (1984), brought by plaintiff, Jaguar
Cars, Inc. ("Jaguar"), against Theodore Forhecz, Sr., and his
sons Theodore Forhecz, Jr. and Mark Forhecz, alleging that they
had perpetrated a scheme to systematically submit fraudulent
warranty claims to Jaguar through their jointly owned Jaguar
dealership, Royal Oaks Motor Car Company, Inc. ("Royal Oaks") in
violation of RICO sections 1962(c) and (d).  A jury awarded
Jaguar damages of $1.1 million against Theodore Forhecz, Sr.
("Theodore, Sr.") and $900,000 against Mark Forhecz ("Mark").
In its final judgment, the district court molded the verdict to
reflect treble damages for the RICO violations, as required by 18
U.S.C.A.  1964(c) (1984).
          Theodore, Sr. contends that the evidence was legally
insufficient to find him liable of the RICO predicate acts of
aiding and abetting mail fraud.  Additionally, Theodore, Sr. and
Mark ("the defendants") contend that Jaguar's RICO claims were
legally insufficient because Jaguar failed to establish
sufficient distinctiveness between the defendant "persons,"
allegedly liable for the RICO violations, and the "enterprise"
through which those persons acted.  This latter contention
requires us to reconsider our interpretation of the civil RICO
statute in light of evolving Supreme Court precedent.  More
particularly, we are faced with the question whether this court's
jurisprudence concerning the distinctiveness requirement of 18
U.S.C.A.  1962(c) (1988), see Glessner v. Kenny, 952 F.2d 702,
710 (3d Cir. 1991), survived the Supreme Court's opinions in
Reves v. Ernst & Young, 113 S.Ct. 1163 (1993) and National
Organization for Women v. Scheidler, 114 S.Ct. 798 (1994).
          Because we decide that this court's application of the
distinctiveness requirement of  1962(c) to corporate officers
and directors does not survive Reves and Scheidler, and because
we are, therefore, satisfied that corporate officers/employees,
such as the defendants, may properly be held liable as persons
managing the affairs of their corporation as an enterprise
through a pattern of racketeering activity, we will affirm.
                I.  FACTS AND PROCEDURAL HISTORY
          Theodore, Sr. was the 51% owner and president of the
Royal Oaks dealership.  The remaining 49% of the dealership was
owned by Mark and Theodore, Jr.  Mark was the general manager of
Royal Oaks and ran the day-to-day operations of the dealership.
In managing Royal Oaks, Mark reported to his father, who was the
president and majority shareholder.  Theodore, Sr. was actively
involved in the operation of the dealership, earning a salary of
roughly one-half million dollars a year for his services.
Theodore, Sr. spent between twenty-five and thirty hours a week
at Royal Oaks and met with Mark on a daily basis to discuss the
dealership's operations.
          The trial record demonstrated that the Royal Oaks
dealership, through the actions of its employees, perpetrated a
widespread scheme from as early as 1987 through May 1991 to
defraud Jaguar through the submission of thousands of fraudulent
warranty claims.  Under this scheme, warranty claims were
continuously submitted to Jaguar for the cost of labor and parts
for alleged repairs that were either unnecessary, were never
actually performed, or were performed on cars that were no longer
under warranty.  The scheme included submitting fictitious time-
sheets, doctoring the warranty paperwork submitted to Jaguar, and
altering new parts to make them look old and in need of
replacement.  Additionally, an outside sublet paint-and-body
shop, Kolorworks, and its owner, Linda Kucharski, assisted the
defendants by helping them construct fraudulent warranty claims
for Royal Oaks to submit to Jaguar.
          In total, Royal Oaks defrauded Jaguar in an amount of
between one and two million dollars, enabling Royal Oaks to
generate hundreds of thousands of dollars of warranty income per
month and to maintain extremely lucrative salaries for the
defendants through periods of declining sales income even though
its work bays were often empty and its technicians idle.  The
evidence presented at trial demonstrated that actual work had
declined to a point where there were few, if any, cars in the
service department.
          Correspondingly, in order to occupy their time, the
dealership's ten service technicians regularly sat at their
workbenches reading magazines, or congregated to pitch coins,
play ping-pong, softball, or operate electronic cars.
          In October 1990, Jaguar began to suspect fraud at Royal
Oaks and, in an unprecedented move, sent a team of officials into
the dealership for an entire week to watch every repair being
made.  In order to avoid detection, the defendants placed a load
of new cars in the service areas for mock repairs, so that the
area looked full and technicians were kept busy while Jaguar's
representatives were at the dealership.  Such actions along with
other modifications and refinements to the fraudulent scheme
allowed the fraud to continue until May of 1991.
          After discovering the fraud and terminating the
dealership in May of 1991, Jaguar brought suit in the District
Court for the District of New Jersey alleging violations of RICO
sections 1962(c) and (d).  Section 1962(d) prohibits conspiring
to violate sub-section (c).  18 U.S.C.A.  1962(d) (West Supp.
1994).  Accordingly, the viability of Jaguar's section (d) claim
depends on the legal sufficiency of its  1962(c) claim.
          As noted above, the jury awarded damages against
Theodore, Sr. and Mark on Jaguar's RICO claims.  The district
--- FMail/386 1.0g
(1:2629/124)
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