40 Facts About Racketeering

What is Racketeering?

Racketeering is a term that often brings to mind images of organized crime and shady dealings. But what exactly does it entail? Here are some essential facts to get you started.

1. Definition of Racketeering: Racketeering involves engaging in a pattern of illegal activities for profit. This can include fraud, extortion, and coercion, often carried out by organized groups.

2. History of the Term: The term "racketeer" originated in England, describing street gang members who distracted victims with loud noises while pickpocketing. It gained prominence during Prohibition in the U.S., referring to those involved in illegal alcohol production and distribution.

The RICO Act: A Game Changer

The Racketeer Influenced and Corrupt Organizations (RICO) Act has been a powerful tool in combating organized crime since its inception in 1970. Let's dive into its key aspects.

3. RICO Act: Signed into law on October 15, 1970, the RICO Act aims to combat organized crime by targeting not just individual crimes but also the broader organizational structures behind them.

4. Predicate Acts: RICO cases rely on predicate acts, specific crimes like blackmail, extortion, and wire fraud, which, when committed in a pattern, can lead to more serious charges.

5. Pattern of Racketeering Activity: A pattern is defined as more than two racketeering crimes committed within a 10-year period, related to an enterprise, which can be a legitimate business or an illegitimate organization.

6. Enterprise Defined: Under RICO, an enterprise can be any legitimate or illegitimate business, association, or legal entity with an ongoing structure engaged in or affecting interstate or foreign commerce.

Relationships and Penalties

Understanding the relationships between defendants and enterprises, as well as the penalties involved, is crucial in grasping the full scope of racketeering.

7. Investment of Proceeds: One relationship involves investing the proceeds of racketeering activity into the enterprise.

8. Acquisition or Maintenance of Interest: Another involves acquiring or maintaining an interest in or control of the enterprise through racketeering activity.

9. Conducting Affairs: This relationship entails conducting or participating in the affairs of the enterprise through racketeering activity.

10. Conspiracy: The fourth relationship involves conspiring to do one of the above.

11. Penalties for Racketeering: Those found guilty can be fined up to $25,000 and sentenced to 20 years in prison per racketeering count. Additionally, they must forfeit all ill-gotten gains and interests in any business gained through racketeering activity.

Asset Seizure and Impact

The RICO Act has provisions for asset seizure and has significantly impacted organized crime and other illegal activities.

12. Asset Seizure: Prosecutors can seek a pre-trial restraining order or injunction to temporarily seize a defendant's assets, ensuring something to seize in the event of a guilty verdict.

13. Impact on Organized Crime: The RICO Act has disrupted organized crime, targeting members of the Five Families in New York City and leading to significant convictions.

14. First RICO Conviction: The first documented RICO conviction was of Frank Tieri, a La Cosa Nostra boss in New York City, in 1980.

Expansion and Applications

The RICO Act has expanded over the years to include various forms of illegal activities and organizations.

15. Expansion of RICO: The act now includes any group conducting illegal activity under the racketeering umbrella, such as corrupt police officers, politicians, street gangs, and businesses.

16. Labor Racketeering: This involves organized crime infiltrating labor unions through bribery, coercion, extortion, and embezzlement.

17. Healthcare Fraud: By the 1990s, organized crime evolved to engage in healthcare fraud, including billing for services not provided.

18. White-Collar Crimes: RICO has been used to prosecute white-collar crimes like bank fraud, wire fraud, and embezzlement.

Notable Cases and Scandals

RICO has been instrumental in prosecuting some of the most notorious cases and scandals in recent history.

19. Enron/Arthur Andersen Scandal: Enron executives and its auditing company falsified financial statements, coerced employees to contribute to fake stock, and stole over $2.1 billion in pension plans.

20. Credit Card Fraud: Organized crime rings have engaged in credit card fraud, using stolen identities and credit card information for unauthorized transactions.

21. Corrupt Public Officials: RICO charges have targeted corruption involving public officials, such as the "Kids for Cash" scandal in Pennsylvania.

22. Police Corruption: In 2017-18, eight Baltimore police officers were convicted of racketeering, robbery, extortion, and overtime fraud.

23. College Admissions Scandal: The 2019 college admissions scandal involved nearly 50 individuals in a network created by William (“Rick”) Singer, who accepted money from parents to bribe college officials.

RICO in Various Sectors

RICO has been applied in various sectors, from politics to education, law enforcement, and street gangs.

24. RICO in Politics: Politicians have faced racketeering charges, such as Robert Asher, convicted of perjury, racketeering, conspiracy, and bribery in 1987.

25. RICO in Law Enforcement: State judges have faced federal RICO charges for accepting kickbacks from developers of private juvenile prisons.

26. RICO in Street Gangs: RICO charges have been applied to street gangs, such as the 2011 crackdown on the Five Families, leading to nearly 125 arrests.

27. RICO in Business: Businesses involved in illegal activities like money laundering and embezzlement have faced racketeering charges.

Penalties and Asset Forfeiture

The penalties for racketeering and the provisions for asset forfeiture are severe, ensuring that those involved in illegal activities face significant consequences.

28. RICO Penalties: Convictions can result in a 20-year sentence, with defendants forced to forfeit all property, businesses, and money gained from the crime.

29. Asset Forfeiture: Defendants must forfeit all ill-gotten gains and interests in any business gained through racketeering activity.

30. Pre-Trial Restraint: Prosecutors can seek a pre-trial restraining order or injunction to temporarily seize a defendant's assets.

31. Performance Bond: An injunction or performance bond ensures something to seize in the event of a guilty verdict, preventing defendants from absconding with assets.

Impact on Society

The RICO Act has had a profound impact on society, providing a powerful tool for prosecutors to combat various forms of racketeering.

32. Impact on Business: The act has made it easier to prosecute those involved in organized crime, leading to a decrease in criminal infiltration into legitimate businesses.

33. RICO in Healthcare: Healthcare providers have faced racketeering charges for engaging in fraudulent billing practices and other medical insurance scams.

34. RICO in Labor: Labor unions have been targeted under RICO for bribery, coercion, extortion, and embezzlement.

35. RICO in Education: The 2019 college admissions scandal involved racketeering charges against individuals who bribed college officials.

36. RICO in Politics: Politicians have been charged with racketeering for engaging in corrupt practices like bribery and extortion.

37. RICO in Law Enforcement: Law enforcement officials have faced RICO charges for accepting kickbacks from developers of private juvenile prisons.

38. RICO in Street Gangs: Street gangs have been targeted under RICO, such as the 2011 crackdown on the Five Families.

39. RICO in Business: Companies involved in money laundering and embezzlement have faced racketeering charges.

40. Impact on Society: The RICO Act has disrupted mob activity, targeted corruption, and ensured severe penalties for those involved in illegal activities.

The Impact of Racketeering and RICO

Racketeering has a long, complex history, deeply intertwined with organized crime. The RICO Act, introduced in 1970, revolutionized how authorities combat these illegal activities. By targeting not just individual crimes but the broader organizational structures, RICO has been a game-changer. From disrupting mob activities to tackling white-collar crimes, its reach is vast. Cases like the Enron scandal and the college admissions scandal highlight its versatility. Penalties under RICO are severe, including hefty fines, long prison sentences, and asset forfeiture. This ensures that those involved in racketeering face significant consequences. The act's impact on society is profound, providing a powerful tool for prosecutors. Whether it's corrupt officials, street gangs, or fraudulent businesses, RICO has made it clear: crime doesn't pay. Understanding these facts about racketeering and RICO underscores the importance of continued vigilance and enforcement.