RICO

Introduction

The Racketeer Influenced and Corrupt Organizations Act (RICO) , enacted as Title IX of the Organized Crime Control Act of 1970 and codified at 18 USC §§ 1961-1968, is a federal statute designed to combat organized crime. RICO creates criminal penalties and civil remedies for acts performed as part of an ongoing criminal enterprise. The statute has been applied broadly beyond its original organized crime context, reaching commercial fraud, securities fraud, and political corruption.

The RICO Prohibitions

Section 1962 of RICO prohibits four categories of conduct: using income derived from a pattern of racketeering activity to acquire an interest in an enterprise; acquiring or maintaining an interest in an enterprise through a pattern of racketeering activity; conducting or participating in the affairs of an enterprise through a pattern of racketeering activity; and conspiring to violate any of these provisions.

A pattern of racketeering activity requires at least two acts of racketeering activity (predicate acts) within ten years. The predicate acts must be related and must demonstrate continuity. Relatedness requires that the acts have similar purposes, results, participants, victims, or methods. Continuity requires that the acts pose a threat of ongoing criminal activity.

Predicate Acts

RICO’s predicate acts are defined in § 1961(1) and include a broad range of federal and state offenses: murder, kidnapping, gambling, arson, robbery, bribery, extortion, drug trafficking, money laundering, fraud, and obstruction of justice. The list has been expanded by Congress over time and now includes dozens of state and federal offenses.

The breadth of predicate acts has made RICO applicable to a wide range of conduct beyond organized crime.

The Enterprise Element

RICO requires proof of an enterprise —a group of persons associated together for a common purpose. The enterprise may be a legal entity (a corporation or partnership) or an association in fact (any group of persons whose members function as a continuing unit). The enterprise must be separate from the pattern of racketeering activity.

The enterprise element distinguishes RICO from ordinary conspiracy: the defendant must participate in the conduct of an enterprise, not merely agree to commit crimes.

Civil RICO

Section 1964(c) creates a private right of action for any person injured in their business or property by a RICO violation. Successful plaintiffs may recover treble damages plus attorney’s fees. Civil RICO has become a powerful tool in commercial litigation, with plaintiffs alleging that business competitors or contractual counterparties operated as racketeering enterprises.

To bring a civil RICO claim, the plaintiff must prove: a RICO violation; injury to business or property; and that the injury was caused by the RICO violation. The racketeering injury requirement limits civil RICO to injuries caused by the predicate acts themselves.

RICO Defenses

Defendants in RICO cases may assert several defenses. The statute of limitations for civil RICO is four years. Defendants may argue that the alleged predicate acts are not sufficiently related or continuous to establish a pattern. The enterprise must be defined with particularity, and the defendant must have participated in the conduct of the enterprise.

Conclusion

RICO is a powerful statute that creates criminal and civil liability for participation in a pattern of racketeering activity through an enterprise. The statute’s broad definition of predicate acts and the availability of treble damages in civil cases have made RICO a versatile tool for combating organized crime, fraud, and corruption.