What is the RICO law?

Why Congress passed it

By the late 1960s prosecutors could convict individual mobsters of individual crimes, but the organizations survived: leaders insulated themselves from the street-level acts, and businesses bought with criminal money kept running. RICO targeted the organization itself. It lets prosecutors tie many crimes, committed by many people over many years, into one case against those who ran or profited from the enterprise.

What has to be shown

• An enterprise — a corporation, partnership, union, government office, or an informal association of people with a common purpose, relationships among them and enough duration to pursue that purpose.
• A pattern of racketeering activity — at least two predicate acts within ten years that are related to each other and show continuity, meaning either a closed period of repeated conduct or a threat of continuing activity.
• Predicate offenses drawn from a long statutory list: bribery, extortion, mail and wire fraud, money laundering, drug trafficking, witness tampering, gambling, counterfeiting and many others.
• A connection between the defendant's conduct and the enterprise's affairs — for example, conducting its business through racketeering, using racketeering income to acquire it, or conspiring to do either.

Why the statute is powerful

It allows the government to charge an entire organization and its leadership in one case, to present evidence of crimes committed by others as part of the pattern, and to seek forfeiture of assets and interests acquired through the conduct — including businesses, real estate and bank accounts. Prosecutors can also ask for pretrial restraint of assets. Penalties reach 20 years per count, and life where a predicate offense carries it.

Who gets charged under it

Mafia families were the first targets, but RICO has since been used against street gangs, drug cartels, corrupt police units and public officials, securities fraud schemes, corporate executives and, in some states, political figures. It has also been used against labor unions, the Hells Angels and a major sporting body's officials. The common thread is organized, repeated criminal activity, not the type of organization.

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Civil RICO

Section 1964(c) gives any person injured in their business or property by a RICO violation a claim for three times their damages plus attorneys' fees. That is why the statute appears in commercial litigation, insurance fraud suits, franchise disputes and fraud cases that have nothing to do with organized crime. Courts scrutinize these claims closely and dismiss many for failing the pattern, enterprise or injury requirements. Personal injuries do not count — the loss must be to business or property. Civil RICO claims have a four-year statute of limitations running from discovery of the injury.

Defenses

Common defenses attack the structure of the case: the alleged predicate acts do not meet their own elements, they are isolated rather than a continuing pattern, the defendant did not participate in operating or managing the enterprise (the test from Reves v. Ernst & Young, 1993), or the enterprise is really just the defendant under another name. In civil cases, defendants also argue that the plaintiff's loss was not directly caused by the racketeering.

State versions

More than thirty states have their own RICO or “little RICO” statutes, with their own predicate lists and, in several states, broader reach than the federal law — some include state crimes such as theft or require fewer predicate acts. Georgia's statute is known for its breadth and has been used in high-profile public corruption and gang cases.

If RICO is mentioned in your case

Whether you are a target, a witness or a business considering a civil claim, RICO cases are document-heavy and move slowly, with very high stakes. Criminal targets need an experienced federal criminal defense lawyer, ideally before charges are filed. Businesses considering a civil RICO claim should expect a motion to dismiss and should plead the facts of each predicate act with specificity from the start.

Because forfeiture can reach assets early in a case, targets often need to address frozen accounts and property before trial.