Racketeering and RICO

The Racketeer Influenced and Corrupt Organizations Act, or RICO, was originally developed to prosecute the Mafia and others involved in organized crime. Since RICO was enacted, it has been used more broadly, including charges against companies and even police departments. Racketeering generally involves commission of some criminal activities, related to a group or enterprise. A racketeering charge has serious consequences, and understanding this crime can help to avoid any wrongdoing.

What is Racketeering?

Racketeering usually involves some illegal activities that are carried out as part of an enterprise that is controlled by people who are engaged in the illegal activity. Traditionally, it involves organized crime. There are a number of illegal activities included under the RICO act. These include bribery, embezzlement, counterfeiting, witness tampering, illegal gambling, money laundering, and extortion, among many others.

When there is a pattern of these crimes, and they are committed by, or controlled by an enterprise, then the criminal penalties can prosecuted under the RICO Act.

What is an "Enterprise" Under RICO?

Under the language of the RICO statute, a person who uses an enterprise to engage in a pattern of racketeering may be convicted under the RICO criminal statute. While enterprise is very broadly defined as, "any individual, partnership, corporation, association, or other legal entity, and any union group of individuals associated in fact although not a legal entity."

This definition may appear to include just about anyone involved in illegal activity. While RICO was initially utilized against the Mafia and organized crime, it has since found broader application. In 1984, the Key West Police Department was declared a criminal enterprise under RICO related to charges of a protection racket and cocaine smuggling. In 1989, Michael Milken, a business man with no ties to organized crime, was indicted as an individual under RICO. An enterprise could be a business, a police department, a health care provider, or even an individual for the purposes of the RICO Act.

What is a "Pattern of Racketeering" Under RICO?

A pattern of racketeering is defined as at least two acts of racketeering activity within a 10 year period. Generally, when the alleged racketeering acts were committed as part of a single scheme, it may not be a pattern because there is not evidence of a continued threat.

Who Prosecutes RICO and Racketeering Cases?

Racketeering can be both a state and a federal crime. Although RICO was developed as a federal law, a number of states have enacted similar laws, sometimes called, "little RICO," or "baby RICO," statutes.

A number of federal agencies can be involved in investigating and prosecuting RICO cases. The Justice Department often prosecutes RICO cases, assisted by other federal investigators, including the Federal Bureau of Investigation (FBI), the Department of the Treasury, Secret Service, and even the US Postal Inspection Service.

State can also prosecute racketeering cases, with participation and investigation by federal, state and local law enforcement.

Additionally, the RICO Act also provides for civil lawsuits in connection with the criminal acts.

What are the Penalties for Racketeering?

Under federal law, depending on the racketeering, individuals can face up to 20 years in prison. However, an individual can face life in prison if violating the underlying racketeering activity has a maximum penalty of life imprisonment.

Money and property associated with the crimes may be seized, including houses and entire businesses. Fines of up to twice the proceeds of the offense, may also be assessed.

State penalties vary by state, and can also vary by degree.

Civil penalties under the RICO Act provide for multiplied damages.

What Types of Activity are Targeted Under RICO?

By combining the "pattern" with the "enterprise," RICO has successfully targeted a number of powerful criminal organizations. But even white collar criminals are just as vulnerable to RICO prosecution. A wide variety of "racketeering activity" can be targeted for RICO prosecution. More than 30 crimes are enumerated under the law, which include: robbery, arson, drug trafficking, terrorism, mail fraud, passport or visa fraud, kidnapping, murder, and counterfeiting movies.

More information on the RICO Act can be found here.

How to Avoid RICO or Racketeering Prosecution?

Participation in any of the number of prohibited activities could subject someone to RICO prosecution. Whether as part of a criminal organization, a small group, or even an individual committing racketeering activities may be brought under RICO charges. Helping someone else to commit racketeering activities can also be a crime.

Who Reports Racketeering Suspicions?

Because there are so many activities that comprise RICO actions, any number of sources may report suspicious activity. Banks or financial institutions could report financial crimes. Companies may report counterfeiting activities. Police investigations may lead from a single criminal investigation to a broader racketeering charge. Some people may report illegal activity in order to get a cash reward.

What to do When You Learn of an Racketeering Investigation?

Racketeering is a very serious crime, and can inflict severe penalties. If you become the target of a RICO investigation, or upon receiving a subpoena, you may not know how to respond. Once you become aware of an investigation, legal counsel can help to make the difficult decisions of what the next step should be.

The question of cooperation with the government is a critical decision, which could lead to resolution or could expose the individual to criminal and civil liability. Often times, individuals are given the opportunity to cooperate with investigators to reduce potential penalties.

Defending Charges of Racketeering?

Defenses can include arguing that the individual was not part of a criminal enterprise, or did not know that their actions would further that enterprise. Other defenses might include arguing there was no continuity to establish a pattern of crimes, or that the crime was part of only a single scheme. But again, because of the broad range of crimes associated with the RICO Act, potential defenses can vary.

However, with the number of activities, laws and agencies involved in racketeering investigations, the legal issues involved can be complicated. Additionally, because of the penalties involved, each decision carries significant consequences. An experienced attorney focused in this area will be able to clarify the issues facing a client investigated by a state or federal agency for racketeering. A dedicated lawyer can help identify the elements required to prosecute a RICO case, and defend their client.