Racketeer Influenced and Corrupt Organizations Act (RICO)

Definition - What does Racketeer Influenced and Corrupt Organizations Act (RICO) mean?

The Racketeer Influenced and Corrupt Organizations Act (RICO) is a federal law that criminalizes organized crime. The law targets two primary offenses. The first category punishable by the law is engaging in a pattern of racketeering activities and the second is the collection of an unlawful debt. In both instances, the activity must be conducted in furtherance of a criminal enterprise in order to be prosecuted under the RICO act. The statute broadly defines racketeering activities to include over criminal acts including murder, intimidation, embezzlement, mail fraud, human trafficking, extortion, and witness tampering. An unlawful debt is defined by the statute as one involving illegal gambling or loan sharking. Distinguishable from racketeering activities, the collection of an unlawful debt does not require proof of a pattern of ongoing activity for liability to attach.

The federal RICO law includes both criminal and civil penalties, including the seizure of assets. The law also permits victims to bring civil suits for damages against RICO offenders. Because the statute criminalizes the use of funds gained through the named activities and conspiring to engage in such activities, prosecutors can pursue actions against the leaders of a criminal organization even when those individuals did not directly commit underlying crime. Most states have also passed similar laws.

WorkplaceTesting explains Racketeer Influenced and Corrupt Organizations Act (RICO)

First established in 1970, the federal RICO statute, 18 U.S. Code § 1961, was created to address the use of legitimate businesses as covers for illegal activities. Legislative history for the law also indicates a concern that labor unions and similar organizations were being used for the furtherance of criminal acts. Too often, prosecutors were able to prosecute an individual member of an organization for a particular crime, but could not shut down the operation of the organization. The federal RICO law and subsequent state laws were drafted to address this shortcoming. While initially written to close this perceived loophole permitting organized crime bosses to escape prosecution, the RICO Act has since been applied to a number of other situations. Cartels, corrupt police departments, advocacy groups, and even corporations have been pursued both criminally and civilly under RICO statutes. The federal RICO law is limited to acts that involve commerce between states, or foreign commerce, because the U.S. Constitution limits the circumstances under which federal law can prosecute intrastate offenses. To address this limitation, many states have similar laws. State RICO laws often differ in the level and type of proof required to prosecution someone. Notably, not all states require proof of a pattern of activity for racketeering activity to impose liability.

Over one hundred criminal acts, including many state and federal felonies, are defined by the statute as racketeering activities. Under the federal RICO act, an individual who has engaged in a pattern of racketeering, usually defined as two or more acts of racketeering within a ten year period, may be targeted for RICO prosecution. Time spent in prison is not included in any calculations related to establishing a pattern. Thus, someone who was arrested and convicted for extortion and committed a second racketeering crime upon release from prison might still be guilty of a RICO offense even if more than ten years had passed between the two crimes. Additionally, anyone who conspires to engage a pattern of racketeering, participates indirectly in the crimes, or uses funds obtained directly or indirectly through these crimes, may be prosecuted under the statute. Any action to collect an illegal debt is a violation of the statute without proof of a pattern of behavior.

Because individual victims of RICO crimes may bring civil actions, RICO laws have a very broad reach. Civil actions require a lower level of proof than criminal prosecutions. Additionally, the financial penalties imposed in a civil action make them an attractive means of redress for the victim of a RICO violator. An employer or employee organization that engages in acts of intimidation, money laundering, embezzlement, or other racketeering crimes may become the target of either a civil or criminal RICO action.

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