The RICO Act, 18 U.S.C. §§ 1961–68, provides for criminal  prosecution of racketeering activities as part of an ongoing criminal organization. As noted in its legislative history, RICO is designed to address the infiltration of legitimate enterprises by organized crime and other illegal ventures. Some examples provided in the legislative history include the infiltration of legitimate businesses, such as laundry services, retail stores, restaurants and nightclubs, or labor unions, to commit gambling, money laundering, loan sharking, or extortion. Leaders of criminal organizations can be held liable under RICO for crimes they order others to commit, or assist in committing, in furtherance of the ongoing criminal organization. As discussed below, section 1962 sets forth three substantive offenses and makes it a crime to conspire to commit any of the three, section 1961 defines terms used in the RICO statute, and section 1963 establishes criminal penalties, including imprisonment, fines, and criminal forfeiture.


Section 1962(a), (b), and (c) sets forth the substantive prohibited activities. Section 1962(d) makes it unlawful to conspire to commit any such prohibited activities. Each of the prohibited activities requires, as a necessary element, proof of a “pattern of racketeering activity” or “collection of an unlawful  debt.” The circuits that have addressed the issue differ on whether the existence of an enterprise is an element of a section 1962(d) conspiracy, with the Second, Sixth, Ninth, and Tenth Circuits holding that the government is not required to prove the existence of the enterprise and the Seventh Circuit holding that the government must prove the enterprise’s existence.

Person lying face down on pavement, being handcuffed.

Under section 1962(a), it is a crime to “use or invest” any income derived from a “pattern of racketeering activity” or through “collection of an unlawful debt” to establish, acquire an interest in, or operate “any enterprise” engaged in or affecting interstate commerce. To establish an offense under section 1962(a), the government must show that the defendant had derived income from a pattern of racketeering or collection of unlawful debt, and then used or invested some of that income to establish or operate an enterprise engaged in or affecting interstate commerce. For example, a drug dealer violates section 1962(a) by using the proceeds of a pattern of drug trafficking crimes to

invest in or operate a legitimate business.


Section 1962(b) prohibits acquiring or maintaining an interest in, or control of, any enterprise that is engaged in or affects interstate commerce “through a pattern of racketeering activity or through collection of an unlawful debt.” This provision makes it

unlawful to take over an enterprise that affects interstate commerce through a pattern of racketeering activity or collection of unlawful debt. For example, an organized crime figure violates section 1962(b) by taking over a legitimate business through a pattern of extortionate and loansharking acts designed to intimidate the owners into selling the

business.


Section 1962(c) makes it unlawful for any person “employed by or associated with any enterprise engaged in” or affecting 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.”


Section 1962(c) requires the existence of two distinct entities: “a ‘person’ and an ‘enterprise’ that is not simply the same ‘person’ referred to by a different name.” Criminal liability depends on showing that the person “conducted or participated in the conduct of the enterprise’s affairs.” For purposes of RICO, a corporate employee (a natural person) is distinct from the corporation itself, a legally different entity with different rights and responsibilities due to its different legal status, even where the employee is the corporation’s sole owner. Likewise, the existence of an enterprise is separate from the pattern of racketeering activity in which the enterprise engages. The enterprise is “proved by evidence of an ongoing organization . . . and by evidence that the various associates function as a continuing unit,” while the pattern of racketeering activity is proved by evidence of at least two racketeering acts committed by participants in the enterprise. However, evidence establishing the pattern of racketeering activity and evidence establishing an enterprise “may in particular cases coalesce.”


Section 1962(d) provides that “[i]t shall be unlawful for any person to conspire to violate any of the provisions of subsection (a), (b), or (c) of this section.” Unlike the general conspiracy statute applicable to federal crimes, which requires proof that at least one of the conspirators committed an “act to effect the object of the conspiracy,” section 1962(d) does not require the commission of an “overt” or specific act in furtherance of a RICO conspiracy. The RICO conspiracy provision focuses on the “act of agreement.” Therefore, a defendant who conspires to commit a substantive offense under section 1962(a), (b), or (c) can be convicted of a RICO conspiracy, even without personally committing or agreeing to commit a racketeering activity or collection of unlawful debt, as would be required for conviction of an underlying substantive offense. Nor does a RICO conspiracy require proof that an enterprise actually existed or that a pattern of racketeering activity actually occurred. Rather, it requires only that the conspirator “intend[s] to further an endeavor which, if completed, would satisfy all of the elements” of a substantive criminal offense.

RICO defines “racketeering activity” as any crime enumerated in paragraphs A through G of subsection (1). The listed crimes often are referred to as “predicate acts,” because committing an enumerated crime is the foundation for a RICO offense. Criminal acts committed outside of the United States can serve as RICO predicate offenses, “but only to the extent that the predicates alleged in a particular case themselves apply extraterritorially.” Subdivision A includes “any act or threat involving” certain state offenses, including murder, kidnapping, gambling, arson, robbery, bribery, extortion, dealing in a controlled substance, and other serious crimes, punishable by imprisonment for more than one year. This definition does not list specific state statutes. Rather, the Supreme Court has held that a state statutory offense may constitute a racketeering act under subdivision A provided it substantially conforms to the “generic” definition of the state offense referenced at the time RICO was enacted.


Further, the statute restricts the listed offenses to those “chargeable under state law,” meaning that the offense must have been chargeable under state law at the time the underlying conduct was committed. Subdivisions B, C, E, F, and G include “any act which is indictable under” certain federal statutes. These provisions are narrower than subdivision A because the act must have been “indictable under” one of the listed federal statutes at the time the subdivision was enacted. Attempts and conspiracies may not be used as racketeering acts unless they are expressly included within the terms of the statute. For example, a conspiracy to violate the Hobbs Act may be used as a predicate racketeering act under subdivision B because the Hobbs Act statute expressly makes conspiracy a crime.


Subdivision D includes “any offense involving” listed categories of federal offenses. Unlike in subdivisions B, C, E, F, and G, the phrase “any offense involving” in subdivision D includes attempts and conspiracies.


A “pattern of racketeering activity” requires “at least two acts of racketeering activity,” one of which occurred after the effective date of the RICO statute and the last of which occurred within ten years after the commission of a prior racketeering act. The ten-year limitation excludes any period of imprisonment. The Supreme Court has held that establishing a pattern of racketeering activity requires more than simply proving two racketeering acts within a statutorily prescribed time period; there also must be proof that the racketeering acts are related and amount to, or pose a threat of, continued criminal activity.


The RICO Act establishes criminal penalties for a violation of section 1962. Pursuant to section 1963(a), a violation of section 1962 is punishable by a fine, a term of imprisonment not to exceed 20 years, or both. However, if the RICO violation is based on racketeering activity that is charged as a predicate act and has a maximum penalty of life imprisonment, the maximum penalty for the RICO violation is also life imprisonment, provided that the predicate act is proven beyond a reasonable doubt.56


The Double Jeopardy Clause prohibits successive prosecutions or punishments for the same offense. Two offenses are separate if each contains an element not contained in the other. In the RICO context, double jeopardy issues may be triggered in two ways: (1) a defendant is prosecuted for a RICO conspiracy and a substantive RICO offense; and (2) a defendant is prosecuted for a substantive RICO offense and for offenses charged as racketeering acts underlying the RICO offense.


One effective method to attack a RICO case is to attack the predicate offenses. By showing the offenses are too remote in time, or, quite often, were not part of an ongoing criminal enterprise. These cases are complex and difficult to prosecute. The government has prosecutors specializing in these cases. Contact me to discuss how to attack the government’s case with RICO defense solutions.