Racketeering

• Author: Jeffrey Lehman, Shirelle Phelps

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Traditionally, obtaining or extorting money illegally or carrying on illegal business activities, usually by ORGANIZED CRIME . A pattern of illegal activity carried out as part of an enterprise that is owned or controlled by those who are engaged in the illegal activity. The latter definition derives from the federal Racketeer Influenced and Corruption Organizations Act (RICO), a set of laws (18 U.S.C.A. § 1961 et seq. [1970]) specifically designed to punish racketeering by business enterprises.

Racketeering, as it is commonly understood, has always coexisted with business. In the United States, the term racketeer was synonymous with members of organized-crime operations.

Congress passed RICO as part of the Organized Crime Control Act of 1970. Organized crime in the United States had been increasing ever since the Twenty-First Amendment's PROHIBITION of alcohol was repealed in 1933. Crime groups and families that had been bootlegging moved on to other moneymaking crimes by controlling legitimate businesses and by using some of them as fronts for criminal activity. Over the years, Congress had enacted several statutes authorizing increased punishment for typical organized-crime activities such as illicit gambling rings, loan sharking, transportation of stolen goods, and EXTORTION. However, it had not passed legislation that specifically punishes the very act of committing organized crime.

Organized crime continued to proliferate in the 1960s. After investigating and debating organized-crime legislation for approximately 20 years, beginning with Senate committee hearings conducted in 1951 by Tennessee Senator Estes Kefauver, Congress finally passed RICO.

The specific goal of RICO is to punish the use of an enterprise to engage in certain criminal activities. A person who uses an enterprise to engage in a pattern of racketeering may be convicted under the RICO criminal statute (18 U.S.C.A. § 1963). 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." A pattern is defined as "at least two acts of racketeering activity, one of which occurred after the effective date of [RICO's passage] and the last of which occurred within 10 years ? after commission of a prior act of racketeering activity."

Racketeering activity under federal law includes a number of criminal offenses, including: BRIBERY; sports bribery; counterfeiting; felony theft from interstate shipment; EMBEZZLEMENT from PENSION and WELFARE funds; extortionate credit transactions; FRAUD relating to identification documents; fraud relating to access devices; transmission of gambling information; MAIL FRAUD; wire fraud; financial institution fraud; citizenship or naturalization fraud; obscene matter; OBSTRUCTION OF JUSTICE; obstruction of criminal investigation; obstruction of state or local law enforcement; witness tampering; retaliation against witness; interference with commerce, bribery, or extortion; interstate transportation in aid of racketeering; interstate transportation of wagering paraphernalia; unlawful welfare fund payments; prohibition of illegal gambling business; MONEY LAUNDERING; monetary transactions in property derived from unlawful activities; murder for hire; sexual exploitation of children; interstate transportation of stolen motor vehicles; interstate transportation of stolen property; sale of stolen goods; trafficking in motor vehicles and parts; trafficking in contraband cigarettes; white slave traffic; restrictions of payments and loans to labor organizations; embezzlement from union funds; BANKRUPTCY fraud; fraud in the sale of SECURITIES; felonious manufacture, importation, receiving, concealment, buying, selling, or otherwise dealing in narcotic or other dangerous drugs; and any act that is indictable under the Currency and Foreign Transactions Reporting Act.

RICO outlaws every manner in which an enterprise can be used for long-term racketeering activity. Under the law, no person may invest racketeering proceeds to acquire any interest in an enterprise; no person may acquire or maintain an interest in an enterprise through a pattern of racketeering activity; and no person associated with or employed by an enterprise may conduct that enterprise's affairs through a pattern of racketeering activity.

The punishment for violating the criminal provisions of RICO is exceptionally severe. If convicted, a defendant is fined and sentenced to not more than 20 years in prison for each RICO violation. Furthermore, the defendant must forfeit any interest, claim against, or property or contractual right over the criminal enterprise, as well as any property that constitutes the racketeering activity or that was derived from the

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racketeering activity. Finally, RICO contains civil provisions that allow a party who has been injured by a RICO defendant to recover from the defendant in...