The Racketeer Influenced and Corrupt Organizations Act, or simply “RICO,” is a broad and complex statute that was originally enacted to combat organized crime syndicates and mob bosses. RICO primarily targets racketeering and profiting from illegal activity, but federal prosecutors still bring racketeering charges in a broad range of cases, from violent crimes to white-collar cases.
Signed into law by Nixon in 1970, the RICO Act was intended to be the “silver bullet” against the organized criminal enterprises dominating metropolitans nationwide. With these new RICO charges, federal prosecutors could hold gang and mob leaders criminally responsible for the criminal activity of their members, effectively enabling them fight organized crime by “cutting off the head.” Even further, the RICO Act significantly broadened the scope of asset forfeiture, effectively letting the government build momentum and turn organized crimes’ resources against them.
With the golden years of organized crime in the past, federal prosecutors now bring RICO charges against a wide range of cases, including, small cases alleging short-lived fraud schemes involving few people that otherwise haven’t seen inside a courtroom.
Under the RICO Act, 18 U.S.C. § 1962(c)),
“It shall be unlawful for anyone employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt.”
The goal of the RICO Act is to punish individuals that use an enterprise to conduct criminal activity for profit, so a person engaging in racketeering or profiting from illegal activity would likely be in violation of the RICO Act. This means that to face criminal charges for racketeering under the RICO Act, an individual must engage in a pattern of racketeering activity connected to a criminal enterprise.
The definition of enterprise under RICO is quite expansive. Under the act, basically any association between two or more individuals would be an enterprise.
More precisely, under the RICO Act, an “enterprise” is defined as “any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity.”
Because the RICO Act is a complex statute, below are some simplified steps to proving a federal racketeering or RICO charge.
There must first be a criminal enterprise for a racketeering charge. As stated above, just about anyone can create or join a criminal enterprise.
One limitation, importantly, is that the criminal enterprise itself cannot be an individual.
In other words, when bringing a RICO charge, a business can be the criminal enterprise that individuals use to commit crimes, but that business cannot be both the RICO criminal enterprise and an individual indicted with a racketeering charge based on the same criminal activity.
In short, the criminal enterprise is the vehicle for the crime. A business can be either the vehicle or an individual participant in the vehicle. It cannot be both.
The criminal enterprise must be connected to a pattern of racketeering activity, and the RICO Act defines racketeering with a list of 35 “predicate offenses” that includes:
Accordingly, to show a pattern of racketeering, the government must prove beyond a reasonable doubt that 2 or more predicate offenses within 10 years were committed through the criminal enterprise.
Here are a few examples of general conduct that may serve as the basis for a federal racketeering charge:
The Federal Bureau of Investigation (FBI), the Drug Enforcement Administration (DEA) and the Department of Justice (DOJ) are the most likely agencies investigating persons suspected of racketeering and RICO-related charges.
Other federal agencies likely investigating racketeering and RICO-related charges include the Internal Revenue Service (IRS), Securities Exchange Commission (SEC), Federal Trade Commission (FTC) Department of Health & Human Services (DHHS), and Small Business Association (SBA).
The punishment for racketeering most often includes an assessment of heavy fines and a term of imprisonment, but sentencing varies with each case’s unique set of facts, the presiding judge, and factors considered under the federal sentencing guidelines, which you can read more about here.
Yes, racketeering is a felony under federal law.
20 years is the maximum term of imprisonment for racketeering under the RICO Act.
Life imprisonment is the maximum term of imprisonment for racketeering under the RICO Act if any of the predicate crimes are punishable by life imprisonment, e.g. murder.
$250,000 or two times the amount of illegal profits earned from the racketeering charge, whichever is greater, is the maximum fine for racketeering under the RICO Act.
Every sentence in a federal case is based on the federal sentencing guidelines, which considers a multitude of factors, such as prior criminal history, use of a gun, or position of trust, to calculate a recommended range that the federal judge may use as a guide for sentencing, however the presiding judge ultimately reserves final discretion at sentencing. Thus, as long as the judge provides a reasonable basis for their decision on record, the judge may make what is called a “departure from the guidelines” and sentence the defendant to a term of imprisonment outside the recommended range. You can learn more about the sentencing under the federal sentencing guidelines here.
Possibly, as it depends on the charges you are convicted of and the unique facts of your case. Ultimately, however, final discretion remains with the judge presiding over sentencing. Factors that also will help determine whether restitution will be required include whether there are victims of the convicted charges, whether those victims suffered compensable harm, the federal sentencing guidelines, and many more.
Possibly, a person indicted with racketeering charges would likely be subject to asset seizure and forfeiture. This means that the government can lawfully take any of your property, including your money, cars, and even your interest in a business so long as it proves you used the assets to facilitate the racketeering, or the assets were “proceeds” of racketeering.
At the same time, determining assets subject to forfeiture also depends on the charges alleged in the indictment and the unique facts of your case. As mentioned above, the charges and facts alleged in the indictment shape the scope of the entire criminal proceeding, including assets subject to pre-trial seizures and final forfeiture as part of sentencing, if convicted. You can learn more about the sentencing under the federal sentencing guidelines here.
Yes, a person accused of racketeering might also find themselves defending private suits, as the RICO Act provides civil causes of action for individual persons and businesses seeking damages for harm caused by the alleged criminal enterprise.
Although a criminal conviction of racketeering does not automatically mean you would be found liable in a later civil suit for racketeering, it does increase its likelihood.
If you are found liable in a civil suit, you would look at paying up to treble damages, i.e. up to three times the actual damages found by the jury or judge in the civil proceeding.
See our news page for recent updates on COVID-19 fraud cases here.
You should only speak with law enforcement investigator regarding anything related to fraud, COVID-19 fraud, or any other related crime after you have spoken to a criminal defense lawyer. Period.
A common question from people involved in a criminal investigation is at what point can they finally clear their name and share their part of the story.
You have probably heard investigators, prosecutors, and others taking the situation out of context, bending the truth, and misunderstanding what actually happened. They are relying on people who are lying, and the whole situation is outrageous and humiliating for you.
You should know that the Fifth Amendment exists to protect anyone accused of a crime from incriminating themselves, and the truth is it takes only one split-second mistake to get unnecessarily tied up in a prolonged criminal investigation that will place a heavy financial and time-consuming burden for you and loved ones. Do not go swimming with sharks alone and without a cage.
You need to speak with a fraud or COVID-19 fraud defense attorney to obtain sound legal advice before you speak with federal fraud investigators, even if you think you have done nothing wrong.
You should contact a defense lawyer that has decades of experience handling criminal investigations before you engage with investigators. Balancing cooperation and protecting your constitutional rights and liberties requires a defense attorney that knows how to handle federal investigators.
If you have been contacted or anticipate contact from federal fraud or COVID-19 fraud investigators, then you should contact and speak with a federal fraud and COVID-19 fraud defense lawyer to protect yourself, your freedom, and financial stability. You will not be able to talk yourself out of the crosshairs – you’ll only be wound up in a web of investigation tactics.
You need a fraud defense lawyer who knows what they’re doing and has a proven track record of experience defending federal fraud cases. Schiffer law firm has over four decades of experience defending clients involved in federal criminal investigations and clients accused of federal crimes. The fraud defense lawyers at Schiffer law firm know how to handle federal fraud cases from first contact by investigators to overturning wrongful convictions on appeal.
Schiffer law firm attorneys has and continues to defend people needing fraud defense attorneys nationwide. Nobody is too small, and nowhere is too far. If you think you need to speak to a fraud defense attorney, give us a call today.