Racketeering is a crime related to businesses that engage in illegal activity. The Racketeer Influenced and Corrupt Organizations Act (RICO) is a federal law aimed at prosecuting organized crime. The Act, passed in 1970, gave the federal law enforcement the power to prosecute an entire criminal organization, rather than be limited to charging a single individual with a crime. It is possible for multiple members of a criminal organization to be charged with racketeering even if individually they did not personally commit the offense.
Although RICO was originally conceived of as a way to prosecute Mafia style organizations, it has since been used against any kind of enterprise engaged in criminal activity, including sports organizations, politicians, and police departments. As a number of white collar crimes are included under RICO, the act has been an increasingly common method of prosecuting this kind of illegal activity. RICO charges are serious federal crimes with possible life imprisonment, plus seizure of assets and restitution payments.
RICO covers a wide variety of criminal acts, for a total of 35 crimes. RICO violations are defined under 18 U.S.C. § 1962(a)and include:
- Dealing in obscene matter
- Dealing in a controlled substance
- Theft from interstate shipment
- Embezzlement from pension and welfare funds
- Fraud in connection with identification documents
- Mail fraud
- Wire fraud
- Financial institution fraud
- Obstruction of justice
- Retaliating against a witness
- Human trafficking
- Money laundering
- Sexual exploitation of children
- Interstate transportation of stolen motor vehicles
- Media piracy
- Contraband cigarette trafficking
- Biological, chemical and nuclear weapons trafficking
It is also illegal to conspire to commit racketeering under RICO. Even if the crimes that could lead to a racketeering conviction were not actioned, the defendants can still be charged with violating RICO if they intended to complete an act that results in a racketeering crime.
Investigating RICO Charges
On suspicion of illegal activity, both government agencies or private enterprises can be involved in investigating acts of racketeering. For example, the FBI, Justice Department, or state law enforcement may discover a pattern of illegal activity when investigating a single crime. Criminal activity that involves other countries may be investigated by INTERPOL. Companies may also suspect criminal activities by their employees. If a financial institution such as a bank suspects one of its customers is laundering money, they may contact law enforcement. A business may investigate one of their employees and discover they are embezzling funds, and report the crime to the authorities.
Prosecuting RICO Charges
In order for the prosecution to convict under RICO, it must be proven that the defendant demonstrates a pattern of racketeering activity. This is defined as at least two acts of racketeering activity (called predicate acts) committed within ten years of each other. The government must prove that the predicate acts were not isolated events, but were related to the same purpose, methods, participants, and/or victims, and constitute continued criminal activity. The predicate acts must also be connected to an enterprise of some kind, whether it is illegal (a criminal gang) or legal (a corporation).
For an individual to be convicted of a RICO charge, the prosecution must prove beyond a reasonable doubt:
- The presence of an enterprise;
- The enterprise’s activities affected commerce;
- The defendant was employed or associated with the enterprise;
- The defendant knowingly participated in the enterprise;
- The defendant knowingly engaged in a pattern of racketeering on the enterprise’s behalf.
Without proving all of the five elements of the defendant’s involvement in the enterprise and the pattern of predicate acts, the government can not prove their case that the defendant engaged in racketeering.
Penalties of a RICO Conviction
A RICO conviction can result in serious penalties, including jail time and financial consequences, which are designed to be punitive enough to deter others from criminal activity that can be prosecuted under RICO. Violations under RICO are punishable by up to 20 years in prison, but also up to life imprisonment if a criminal act that makes up the pattern of racketeering is serious enough to warrant a life sentence. The defendant may also be liable for fines of up to $250,000, or pay restitution of up to twice the amount gained financially from the criminal activity.
The defendant’s assets can also be frozen before going to trial, in order to prevent the accused from diverting assets gained through criminal activity before the conclusion of the trial. And if the defendant is convicted, all of the assets earned through the enterprise have to be forfeited to the government. This means the potential loss of a business, real estate, personal property, and bank accounts. The defendant may be prohibited from certain activities or investments, meaning their financial future may be permanently compromised.
A defendant may also be ordered to pay civil damages – for example, if the defendant is found guilty of embezzling funds from an investor, the victim can file a lawsuit. The penalty may be up to three times the amount of actual damages.
Defending Against RICO Charges
There are a number of ways to argue a defense against RICO charges. One possible defense is to argue that the predicate acts the prosecution claims are a pattern of criminal activity were in fact unrelated. The defense can also argue that the criminal activity was not directed by a criminal organization, or that the group of people under investigation for RICO charges do not constitute an enterprise. Mistaken identity is also a potential defense.
Evidence of racketeering used against the defendant must also be obtained legally. The defense may be able to file a motion to suppress any evidence obtained through unlawful search and seizure. If the court allows the motion to pass, there could be insufficient evidence for a conviction.
RICO charges are potentially very serious and can result in long prison sentences and significant loss of property. If you are charged under RICO, you need an experienced legal team that can expertly lead your defense. Contact us today for a free consultation.