RICO


RICO

RICO

The Racketeer Influenced and Corrupt Organization Act is a federal Act that provides for extended criminal penalties and a civil cause of action for organized crime.  Racketeer Influenced and Corrupt Organization Act, commonly known as RICO Act, or RICO was passed in 1970.  RICO is codified in Chapter 96, Title 18, United States Code, §1961-1968.  

 RICO was intended to eliminate the ill effects of organized crime or in other words destroy the Mafia.   

The statute prohibits four separate kinds of activities: 1) investing income derived from a pattern of racketeering activity in a business engaged in interstate commerce (18 U.S.C. § 1962 (a)); 2) acquiring control of a business engaged in interstate commerce through a pattern of racketeering activity (§ 1962 (b)); 3) participating in the conduct of a business engaged in interstate commerce through a pattern of racketeering activity (§ 1962(c));  and 4) conspiring to violate any of the above (§ 1962(d)).

Section 1962(b) makes it unlawful for a person to acquire or maintain an interest in an enterprise through a pattern of racketeering activity.  Section 1962(b) is perhaps the most difficult RICO claim to express in practical terms.  Normally, a violation of section 1962(b) occurs when a victim business owner cannot make payments to a loan shark; upon default, the loan shark says: “you’re either going to die or you’re going to give me your business.” The victim transfers control of his business to the loan shark by reason of the threat to his life. Usually, the victim business owner remains the owner on paper but the loan shark controls the business and receives all income from the business. Thus, the loan shark has acquired and maintained interest or control over an enterprise (i.e. the business) through a pattern of racketeering (i.e., loan sharking and extortion).

The most useful and common civil RICO claim is found under section 1962(c), which makes it unlawful for a person to manipulate an enterprise for purposes of engaging in, concealing, or benefiting from a pattern of racketeering activity.

Section 1962(d) makes it unlawful for a person to conspire to violate subsections (a), (b) or (c) of the RICO Act. Anyone who agrees or conspires to pursue the same criminal objective can be held liable for a RICO violation. If conspirators have a plan which calls for some conspirators to commit the crime and others to provide support, the supporters are as guilty as those who actually did the crime. A conspirator must simply intend to further an endeavor which, if completed, would satisfy all elements of a civil RICO claim. Thus, there are two ways to effectively defend against a RICO conspiracy claim: 1) the defendant must prove he never intended to further the criminal endeavor; or 2) the defendant must prove that the endeavor did not satisfy the elements of a civil RICO claim.

The RICO Act differentiates between criminal and civil liability by providing for criminal penalties in Section 1963 and civil remedies in Section 1964.  Under the Act, states have ample power in defining and prosecuting crimes within their respective jurisdictions.  The Act contemplates that both the acts charged and the sentences imposed may vary according to the law of the state where the acts occurred.  Section 1961(1) provides that predicate racketeering acts include offenses under state law punishable by more than a year, and § 1963(a) provides that the maximum sentence for a RICO violation is life imprisonment if the violation is based on a racketeering activity for which the maximum penalty includes life imprisonment.

Inside RICO