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FIRM ARTICLES
August 10, 2005
RICO: Racketeering Influenced and Corrupt Organizations Act
By: Ed Martinovich Esq. & Dan Rhoads
The Gentle Don, Alphonse Frank Tieri, ascended through the ranks of the Genovese crime family by being both an effective gangster and an elusive criminal defendant. After one early conviction for robbery, Tieri was acquitted in nine consecutive trials. But in 1980, Tieri became the first person charged under the Racketeering Influenced and Corrupt Organizations (RICO) Act (the Act). He was found guilty in 1981 and sentenced to 10 years in prison, but he died less than three months later while out on bail.
After Tieris death, Anthony Fat Tony Salerno became the Genovese boss; but the RICO statute would land Salerno behind bars as well. Rudy Giuliani, then a U.S. Attorney in New York, charged Salerno, along with the leaders of all five families of the American mob, for RICO violations. The Commission trial, U.S. v. Salerno, 505 U.S. 317 (1992), lasted from 1985 until 1987, when all eight defendants were found guilty. The RICO convictions of Tieri, Salerno, and the rest marked the beginning of the drastic decline in the dominance of the American mafia.
The RICO Law
In 1970, Congress passed the RICO Act in response to a perception that traditional conspiracy law provided inadequate tools for combating sophisticated criminal enterprises. Kadish & Schulhofer, Criminal Law and Its Processes, 7th ed. (2001). Indeed, the ability of mobsters like Tieri to elude punishment frustrated lawmakers and law enforcers alike.
The RICO statute has three substantive provisions. The most prevalent of these is subsection (c), which forbids any person employed by or associated with any [interstate] enterprise . . . to conduct or participate, directly or indirectly, in the conduct of such enterprises affairs through a pattern of racketeering activity or collection of unlawful debt. 18 U.S.C. 1962(c). Subsection (a) basically prohibits laundering money generated through racketeering. Subsection (b) criminalizes the acquisition of an interest in an enterprise through racketeering or unlawful debt-collection. Subsection (d) makes it illegal to conspire to violate any of the first three.
What RICO added to conspiracy law was a substantive offense which ties together . . . diverse parties and crimes. U.S. v. Elliott, 571 F.2d 880, 902 (5th Cir. 1978). Where before RICO, the mafias activities consisted of various conspiracies with no legal connection, the Act made it illegal to participate, directly and indirectly, in the affairs of the enterprise by committing two or more predicate crimes. Id. To be found guilty, a person by his words or actions, must have objectively manifested an agreement to participate. Id., 571 F.2d at 903.
Racketeering
The predicate crimes in the original RICO law reflect the fact that the Acts original target was the mafia. They include (A) any act or threat involving murder, kidnapping, gambling, arson, robbery, bribery, extortion, dealing in obscene matter, or dealing in a controlled substance . . . and (B) bribery, counterfeiting, theft from interstate shipment, embezzlement from pension funds, extortion, gambling crimes, obstruction of justice, and fraud. 18 U.S.C. 1961. Since 1988, the Act has expanded to encompass: peonage and slavery, sexual exploitation of children, fraud relating to illegal immigration, and all manner of copyright infringement.
Pattern
A pattern of activity requires proof that the racketeering predicates are related, and that they . . . pose a threat of continued criminal activity. H.J., Inc. v. Northwestern Bell, 492 U.S. 229, 239 (1989). Criminal conduct is related if it embraces criminal acts that have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events. 18 U.S.C. 3575(e). Activity can be continuous in two different ways.
Continuity can be either close-ended or open-ended. Close-ended continuity refers to a period of time, and no case . . . has held the requirement to be satisfied by a pattern of activity lasting less than a year. Religious Technology v. Wollersheim, 971 F.2d 364, 366 (9th Cir. 1992). Open-ended continuity can be shown by either a distinct threat of long-term racketeering activity or by an ongoing entitys regular way of doing business. H.J., 492 U.S. at 242.
Enterprise
A RICO enterprise can be any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity. 18 U.S.C. 1961(4). That last phrase was critical in bringing informal organizations like the mafia under the Acts purview. To be associated in fact, a group must have: (1) a common or shared purpose; (2) some continuity of structure and personnel; and (3) an ascertainable structure distinct from that inherent in a pattern of racketeering. Atlas Pile Driving v. DiCon Financial, 886 F.2d 986, 995 (8th Cir. 1989).
Criminal Penalties
The Act allows for discretion in punishing and gives the state broad powers to seize the property of a convicted defendant. A person convicted under RICO will be either fined or imprisoned not more than 20 years (or for life if the violation is based on a racketeering activity for which the maximum penalty includes life imprisonment), or both. 18 U.S.C. 1963(a). In addition, the person must forfeit essentially anything of value that he obtained through violations of 1962. Id.
Summary
Created to fight the mafia, RICO is now useful in prosecuting members of street gangs, drug-trafficking organizations, and terrorist cells. RICO is also applied to cases of informal groups of individuals acting out a criminal purpose.
Roughly, a violation of RICO consists of (i) intentional participation (ii) in an enterprise (iii) engaging in a pattern (iv) of racketeering activity. Intentional participation is shown through a persons words and actions. An enterprise can be either a legal entity or an informal group. Relatedness and continuity form the pattern. The statute defines racketeering activity by enumerating an ever-expanding list of substantive state and federal offenses.
The Acts criminal penalties include either a fine or imprisonment or both, along with seizure of anything of value that was obtained through racketeering. RICO also includes harsh civil remedies. For example, a person injured by anothers RICO violation shall recover threefold the damages he sustains and the cost of the suit. 18 U.S.C. 1964(c).
The RICO Act is a relatively young statute that is interpreted through still-developing doctrines. Many states have enacted laws based on RICOs blueprint, but RICO itself is tried by federal prosecutors in district court. A defendant facing a RICO charge needs a defense attorney skilled in federal law who is familiar with the statute, its history, and the case law.