Citation[edit | edit source]
Racketeer Influenced and Corrupt Organizations Act (RICO), Title IX of the Organized Crime Control Act of 1970, Pub. L. No. 91-452, 84 Stat. 941 (Oct. 15, 1970), codified at 18 U.S.C. Ch. 96, §§1961-1968.
Overview[edit | edit source]
On October 15, 1970, the Organized Crime Control Act of 1970 became law. Title IX of the Act is the "Racketeer Influenced and Corrupt Organizations Act," commonly referred to as the "RICO" statute. The purpose of the RICO statute is "the elimination of the infiltration of organized crime and racketeering into legitimate organizations operating in interstate commerce." However, the statute is sufficiently broad to encompass illegal activities relating to any enterprise affecting interstate or foreign commerce.
RICO allows for the prosecution of anyone who participates or conspires to participate in a criminal enterprise/organization through two acts of “racketeering activity” within a 10-year period of time. The predicate offenses for racketeering include various state and federal crimes listed in the U.S. Code. Since its enactment, RICO has been one of the dominant tools used in organized crime prosecutions.
Elements of a RICO claim[edit | edit source]
RICO makes it a federal crime for any person to:
- 1. conduct or participate, directly or indirectly, in the conduct of
- 2. the affairs of an enterprise
- 3. engaged in or the activities of which affect, interstate or foreign commerce
- 4. A. through the collection of an unlawful debt, or
- B. through a pattern of racketeering activity.
"To establish the elements of a substantive RICO offense, the government must prove (1) that an enterprise existed; (2) that the enterprise affected interstate or foreign commerce; (3) that the defendant associated with the enterprise; (4) that the defendant participated, directly or indirectly, in the conduct of the affairs of the enterprise; and (5) that the defendant participated in the enterprise through a pattern of racketeering activity by committing at least two racketeering (predicate) acts. . . . To establish the charge of conspiracy to violate the RICO statute, the government must prove, in addition to elements one, two and three described immediately above, that the defendant objectively manifested an agreement to participate . . . in the affairs of the enterprise."
This statement of the elements addresses the more common RICO prosecution involving a pattern of racketeering activity (i.e., predicate offenses), but the government is under no obligation to prove a pattern if the underlying misconduct is "the collection of an unlawful debt."
The "person" who commits a RICO offense need not be a human being, but may be "any individual or entity capable of holding a legal or beneficial interest in property." The “enterprise” element is defined with comparable breadth, embracing “any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity.” In spite of their sweeping scope, the elements are distinct and a single defendant may not be simultaneously charged as both the "person" and the "enterprise" under 18 U.S.C. §1962(c). Subject to this limitation, however, a RICO enterprise may be formal or informal, legal or illegal. In order for a group associated in fact to constitute a RICO enterprise, it must be characterized by "an ongoing organization . . . and . . . evidence that [its] various associates function as a continuing unit."
The "interstate commerce" element of the RICO offense may be established either by evidence that the enterprise has conducted its affairs in interstate commerce or foreign commerce or has engaged in activities that affect interstate commerce or foreign commerce.
The "pattern of racketeering activity" element demands the commission of at least two predicate offenses, which must be of sufficient relationship and continuity to be described as a "pattern." Related crimes, for pattern purposes, are marked by “the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events.”
The "continuity" of predicate offenses may be shown in two ways, either by prove of the regular occurrences related misconduct over a period of time in the past (closed ended) or by evidence of circumstances suggesting that if not stopped by authorities they would have continued in the future (open ended). The courts have been reluctant to find the continuity required for a RICO pattern for closed ended enterprises (those with no threat of future predicate offenses) unless the enterprise’s activities spanned a fairly long period of time. Open-ended continuity (found where there is a threat of future predicate offenses) is nowhere near as time sensitive and is often found where the predicates consist of murder, drug dealing or other law-ignoring crimes or is part of the enterprise’s regular way of doing business.
Accomplice and Conspiracy Liability[edit | edit source]
The RICO conspiracy and accomplice branches of the law are notable for at least two reasons. RICO conspiracies are outlawed in a subsection of Section 1962, that imposes no overt act requirement. The crime is complete upon the agreement to commit a RICO offense. Second, at least in some circuits, RICO accomplices are not subject to RICO tort liability.
References[edit | edit source]
- S. Rep. No. 617, 91st Cong., 1st Sess. 76 (1969).
- See 18 U.S.C. §1961 for a comprehensive list of the predicate offenses for racketeering. Offenses include, but are not limited to, crimes such as murder, kidnapping, gambling, arson, robbery, bribery, extortion, dealing in obscene matter, dealing in a controlled substance or listed chemical, counterfeiting, theft from interstate shipment, embezzlement from pension and welfare funds, embezzlement from union funds, fraud and related activity in connection with identification documents or access devices, mail fraud, wire fraud, financial institution fraud, procurement of citizenship or nationalization unlawfully, obstruction of justice or criminal investigations, tampering with or retaliating against a witness, false statements or forgery in application and use of a passport or other documents, peonage, slavery, trafficking in persons, interference with commerce, and money laundering|laundering of monetary instruments]].
- United States v. Darden, 70 F.3d 1507, 1518 (8th Cir. 1995) (full-text); see also United States v. Parise, 159 F.3d 790, 794 (3d Cir. 1998) (full-text); Cofacredit, S.A. v. Windsor Plumbing Supply Co., 187 F.3d 229, 242 (2d Cir. 1999) (full-text); United States v. Pipkins, 378 F.3d 1281, 1288 (11th Cir. 2004) (full-text).
- United States v. Tocco, 200 F.3d 401, 426 (6th Cir. 2000) (full-text) (indictment based on the collection of illegal gambling proceeds).
- 18 U.S.C. §1961(3).
- Id. §1961(4).
- Wagh v. Metris Direct, Inc., 363 F.3d 821, 830 (9th Cir. 2003) (full-text); Whalen v. Winchester Production Co., 319 F.3d 225, 229 (5th Cir. 2003) (full-text); United States v. Fairchild, 189 F.3d 769, 777 (8th Cir. 1999) (full-text); Anatian v. Coutts Bank (Switzerland) Ltd., 193 F.3d 85, 88-89 (2d Cir. 1999) (full-text); Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 161 (2001) (full-text) (holding, however, that the "person" and the individual through whom a corporate enterprises acts may be the same and need not be distinct).
- United States v. Lee, 374 F.3d 637, 647 (8th Cir. 2004) (full-text); United States v. Pipkins, 378 F.3d 1281, 1289 (11th Cir. 2004) (full-text); United States v. Morales, 185 F.3d 74, 80 (2d Cir. 1999) (full-text), quoting United States v. Turkette, 452 U.S. 576, 583 (1981) (full-text); see also United States v. Torres, 191 F.3d 799, 805-06 (7th Cir. 1999) (full-text) ("A RICO enterprise is an ongoing structure of persons associated thought time, joined in purpose, and organized in a manner amenable to hierarchical or consensual decision-making . . . The continuity of an informal enterprise and the differentiation among roles can provide the requisite structure to prove the elements of the enterprise"); United States v. Richardson, 167 F.3d 621, 625 (D.C. Cir. 1999) (full-text).
- United States v. Robertson, 514 U.S. 669, 671 (1995) (full-text); proof of even a de minimis effect on interstate commerce is sufficient where the enterprise is engaged in economic activity, Waucaush v. Untied States, 380 F.3d 251, 256 (6th Cir. 2004) (full-text); United States v. Cianci, 378 F.3d 71, 83 (1st Cir. 2004) (full-text); United States v. Rodriguez, 360 F.3d 949, 955 (9th Cir. 2004) (full-text); United States v. Gray, 137 F.3d 765, 773 (4th Cir. 1998) (full-text).
- 18 U.S.C. §1961(5).
- "A pattern is not formed by sporadic activity. . . . [A] person cannot be subjected to the sanctions [of RICO] simply for committing two widely separate and isolated criminal offenses. Instead, the term 'pattern' itself requires the showing of a relationship between the predicates and of the threat of continuing activity. It is this factor of continuity plus relationship which combines to produce a pattern." H.J., Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229, 239 (1989) (full-text); United States v. Polanco, 145 F.3d 536, 541 (2d Cir. 1998) (full-text); United States v. Cianci, 378 F.3d 71, 88 (1st Cir. 2004). Prior conviction of a predicate offense, however, is not required or even usual, BancOklahoma Mortgage Corp. v. Capital Title Co., 194 F.3d 1089, 1102 (10th Cir. 1999); cf. Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 488-93 (1985) (a private cause of action under RICO does not require the prior conviction of a defendant).
- H.J., Inc. v. Northwestern Bell Tel. Co., 492 U.S. at 240, quoting 18 U.S.C. §3575(e); United States v. Keltner, 147 F3.d 662, 669 (8th Cir. 1998); United States v. Torres, 191 F.3d 799, 806 (7th Cir. 1999); United States v. Bruno, 383 F.3d 65, 83-84 (2d Cir. 2004).
- H.J., Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229, 241 (1988) ("'continuity' is both a closed- and open-ended concept, referring either to a closed end period of repeated conduct, or to past conduct that by its nature projects into the future with a threat of repetition"); First Capital Asset Management v. Satinwood, Inc., 358 F.3d 159, 180 (2d Cir. 2004); Turner v. Cook, 362 F.3d 1219, 1229 (9th Cir. 2004).
- First Capital Asset Management v. Satinwood, Inc., 358 F.3d at 181-82 (2d Cir. 2004) (this Court has never found a closed-ended pattern where the predicate acts spanned fewer than two years”); Primary Care Investors, Seven v. PHP Healthcare Corp., 986 F.2d 1208, 1215 (8th Cir. 1993) (holding predicate offenses over 10-11 months insufficient and citing cases finding several years sufficient but several periods of less than a year insufficient).
- United States v. Torres, 191 F.3d 799, 808 (7th Cir. 1999) (“As other courts of appeals have noted, in cases where the acts of the defendant or the enterprise were inherently unlawful, such as murder or obstruction of justice, and where in pursuit of inherently unlawful goals, such as narcotics trafficking or embezzlement, the courts generally have concluded that the requisite threat of continuity was adequately established by the nature of the activity, even though the period spanned by the racketeering activity was short”). Open-ended continuity may also be found where the evidence suggests that only the intervention of law enforcement authorities closed down the enterprise. United States v. Richardson, 167 F.3d 621, 626-27 (D.C. Cir. 1999); Jackson v. Bellsouth Telecomms., 372 F.3d 1250, 1267 (11th Cir. 2004); United States v. Connolly, 341 F.3d 16, 30 (1st Cir. 2003).
- 18 U.S.C. §1962(d).
- Salinas v. United States, 522 U.S. 52, 63 (1997).
- Rolo v. City Investing Co. Liquidating Trust, 155 F.3d 644, 656-68 (3d Cir. 1998); Jubelirer v. MasterCard International, Inc., 68 F.Supp. 1049, 1053-54 (D. Wis. 1999) (dismissing RICO claim against credit card company, bank and Internet casino on the grounds, among others, that there is no RICO civil liability for those who aid and abet a RICO violation); In re MasterCard Int'l, Inc., Internet Gambling Litigation, 132 F.Supp.2d 468, 493-95 (E.D. La. 2001) (same), aff’d, 313 F.3d 257 (5th Cir. 2002); but see American Automotive Accessories, Inc. v. Fishman, 991 F.Supp. 987, 993 (N.D. Ill. 1998) (“to be held liable as an aider and abettor, a person must in some sort associate himself with the venture, participate in it as something he wishes to bring about, and seek by his action to make it succeed”) (noting that the Seventh Circuit has yet to “comment on the possibility of aiding and abetting liability in civil RICO actions”); Simon v. Weaver, 327 F.Supp.2d 258, 262 (S.D.N.Y. 2004) (“In order to properly allege a claim for aiding and abetting [a RICO violation], plaintiffs must show . . .”).