Racketeer influenced and corrupt organizations

• Pages: 997-1027
• Date: 01 July 2025
• Published date: 01 July 2025
• Author: Alicia Barry,Marina Catullo,Bryn Horner,Luke Jennings,Mia Plante
• Subject Matter: Derecho Penal

RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS

I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 997

II. ELEMENTS OF THE OFFENSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 999

A. RICO Def‌inition of “Person”. . . . . . . . . . . . . . . . . . . . . . . . 1000

B. Two or More Predicate Acts of “Racketeering Activity”. . . . . 1000

C. Pattern. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1002

D. Enterprise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1004

1. Types of Enterprises. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1005

2. Proving the Enterprise . . . . . . . . . . . . . . . . . . . . . . . . . . 1007

3. Person-Enterprise Rule . . . . . . . . . . . . . . . . . . . . . . . . . . 1008

E. Effect on Interstate Commerce. . . . . . . . . . . . . . . . . . . . . . . . 1008

F. Prohibited Acts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1009

1. Investment of Racketeering Proceeds . . . . . . . . . . . . . . . 1009

2. Acquisition of Enterprise Interest . . . . . . . . . . . . . . . . . . 1010

3. Conducting an Enterprise Through Racketeering Acts . . . 1010

4. Conspiracy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1011

III. DEFENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1012

A. Invalidity of One or More Predicate Acts . . . . . . . . . . . . . . . . 1012

B. Limitation of Actions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1013

C. Withdrawal from the Conspiracy . . . . . . . . . . . . . . . . . . . . . . 1014

D. “Horizontal Preemption” or “Primary Jurisdiction”. . . . . . . 1014

E. “Reverse Vertical Preemption”. . . . . . . . . . . . . . . . . . . . . . . 1016

F. Constitutional Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . 1017

IV. CRIMINAL PENALTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1019

A. Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1019

B. Sentencing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1020

C. Forfeiture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1021

1. “Seize and Freeze” Orders . . . . . . . . . . . . . . . . . . . . . . . 1021

2. Rights of Innocent Third Parties . . . . . . . . . . . . . . . . . . . 1023

3. Attorney’s Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1024

V. NON-TRADITIONAL USES OF THE RICO STATUTE . . . . . . . . . . . . . . 1024

A. College Admissions Fraud . . . . . . . . . . . . . . . . . . . . . . . . . . 1025

B. Health Care Fraud . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1025

C. Wall Street Prosecution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1026

997

I. INTRODUCTION

Congress designed the Racketeer Inf‌luenced and Corrupt Organizations Act

(“RICO”) to combat organized crime in the United States.

1

RICO enhanced sanc-

tions, constructed new legal tools for prosecutors to use in the evidence-gathering

process, and created new remedies to tackle the unlawful activities of criminal syn-

dicates.

2

Although RICO was enacted to target organized crime, Congress chose to

enact a broad statute reaching “criminal activity often operat[ing] wholly within legiti-

mate enterprises.”

3

Consistent with congressional intent,

4

courts have liberally con-

strued

5

RICO to reach even legitimate businesses

6

and organizations without a prof‌it

motive.

7

However, the “liberal construction” clause is not without limits—it is “not

an invitation to apply RICO to new purposes that Congress never intended.”

8

Prosecutors invoke RICO in a wide variety of criminal contexts.

9

Given RICO’s

broad applicability, the requisite mens rea is merely that of the “predicate acts,” or

underlying offenses.

10

Section 1963 sets out criminal penalties associated with vio-

lations of Section 1962, which includes f‌ines, imprisonment or both.

11

The maxi-

mum term of imprisonment is 20 years, except in cases where the underlying

violation carries a maximum penalty of life imprisonment, in which case the higher

maximum applies.

12

1. Organized Crime Control Act of 1970, Pub. L. No. 91-452, 84 Stat. 922, 923 (codif‌ied as amended at U.S.

C. §§ 1961–1968).

2. Id.

3. H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 248 (1989).

4. See Organized Crime Control Act § 904(a) (mandating RICO Act “be liberally construed to effectuate its

remedial purposes”).

5. See Nat’l Org. for Women, Inc. v. Scheidler (NOW I), 510 U.S. 249, 257–58 (1994) (f‌inding RICO statute

can be broadly applied to the detrimental activities of any group of individuals that “‘affect[s] interstate or

foreign commerce,” even without prof‌it-seeking motives). The breadth of RICO, however, is the subject of much

criticism. See generally Neil Feldman, Note, Spiraling Out of Control: Ramif‌ications of Reading RICO Broadly,

65 DEF. COUNS. J. 116 (1998); Douglas E. Abrams, Crime Legislation and the Public Interest: Lessons from Civil

RICO, 50 SMU L. REV. 33, 56–57 (1996).

6. Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 499 (1985).

7. NOW I, 510 U.S. at 258–59 (allowing RICO action against groups with no economic motive to proceed).

8. Reves v. Ernst & Young, 507 U.S. 170, 183 (1993); see also Att’y Gen. of Can. v. R.J. Reynolds Tobacco

Holdings, Inc., 268 F.3d 103, 129 (2d Cir. 2001) (concluding RICO’s text and legislative history do not afford a

civil remedy to a foreign nation for tax evasion by a U.S. company); Chappell v. Robbins, 73 F.3d 918, 921–23

(9th Cir. 1996) (declining to presume RICO abrogates common law legislative immunity protection absent clear

legislative intent or statutory language).

9. See generally G. Robert Blakey & John Robert Blakey, Civil and Criminal RICO: An Overview of the

Statute and Its Operations, 64 DEF. COUNS. J. 36, 43 (1997). Since the passage of RICO, thirty-three States have

adopted similar legislation to address organized crime within their respective jurisdictions. See JOHN E. FLOYD,

AM. BAR ASS’N, RICO STATE BY STATE (2d ed. 2011).

10. See infra Section II.B (def‌ining “predicate acts”); Gil Ramirez Grp., L.L.C. v. Hous. Indep. Sch. Dist., 786

F.3d 400, 412 (5th Cir. 2015); United States v. Rosenthal, 334 F. App’x 841, 843 (9th Cir. 2009); Bruner Corp. v.

R.A. Bruner Co., 133 F.3d 491, 495 (7th Cir. 1998) (noting mens rea requirement is satisf‌ied if defendant knew

predicate offense was illegal); United States v. Baker, 63 F.3d 1478, 1493 (9th Cir. 1995).

11. 18 U.S.C. § 1963.

12. Id.

998 AMERICAN CRIMINAL LAW REVIEW [Vol. 62:997