The term racketeering broadly refers to criminal acts involving extortion or other illegal schemes aimed at extracting illegal profits. A racket refers to an organized scheme set up to generate illicit gain. Typically, racketeering is related to patterns of illegal activity specified in the Racketeer Influenced and Corrupt Organizations (RICO) Act—an influential U.S. federal law enacted to combat organized crime. This law criminalizes the acquisition or control of a business through specified crimes or income derived from those crimes.
Federal crimes under RICO include bribery, fraud, gambling offenses, money laundering, obstructing justice, and murder for hire. At the state level, racketeering can involve crimes such as murder, kidnapping, arson, robbery, bribery, extortion, and drug crimes, provided they match the criteria defining state offenses at the time RICO was enacted.
Key Takeaways
- Racketeering involves acquiring, operating, or using a business to commit illegal acts.
- The U.S. government introduced the RICO Act in October 1970 to address racketeering.
- Racketeering cases can be prosecuted at both federal and state levels.
- Federal racketeering crimes encompass bribery, gambling offenses, money laundering, and more.
- State crimes related to racketeering include murder, kidnapping, gambling, and drug trafficking.
Exploring the Nature of Racketeering
Organized groups often conduct illegal businesses, known as rackets. These groups may either directly operate in illegal industries such as prostitution, human trafficking, drug trafficking, illegal weapons trade, and counterfeiting, or they may divert funds from legal businesses to fund illegal activities.
Forms of Racketeering
Racketeering can manifest in multiple forms, including:
- Cyber Extortion: Involves hackers introducing malware into computers to block access and demanding payment to restore service.
- Protection Rackets: Criminal entities threaten businesses or individuals with harm unless protection fees are paid.
- Kidnapping: Detaining individuals illegally and demanding ransom for their release.
- Fencing Racketeer: Involves purchasing stolen goods from thieves and reselling them for profit to unaware buyers.
- Drug Trafficking: Producing, smuggling, and selling illegal drugs.
- Illegal Gambling Activities: Conducting underground casinos, sports books, or card rooms where profits are illicit.
Labor unions have also been prominent targets for racketeering claims, where organized crime groups often use these unions to extort money from companies or control workers. The Italian-American mafia, particularly La Cosa Nostra, was notorious for manipulating labor unions for such purposes.
To curb such illegal activities, the U.S. government implemented the RICO Act, which allows law enforcement to target individuals or groups behind these crimes. Convictions under this act can lead to severe penalties, including 20-year prison sentences and substantial fines.
Special Considerations in Racketeering
Corporations can be involved in racketeering too. An example includes drug manufacturers bribing doctors to oversupply medicines or lenders engaging in predatory practices that force borrowers into bad loans for profit. Even well-known firms can be accused of racketeering, like in the case where State Farm faced allegations of illegally funding a judge’s election campaign to influence litigation outcomes. They eventually settled for $250 million.
The RICO Act: An Overview
The Department of Justice stipulates that to be found guilty under RICO, proof is required beyond a reasonable doubt that:
- An enterprise existed.
- The enterprise impacted interstate commerce.
- An individual was associated with a criminal enterprise.
- The defendant engaged in racketeering activity.
- There were at least two distinct racketeering acts committed.
Initially focused on combatting organized crime, RICO efficiently allows prosecutors to tackle entire criminal enterprises and seize their assets, addressing ongoing criminal behavior over extended durations.
Federal vs. State Racketeering Offenses
Prosecution under RICO can follow committing at least two qualifying racketeering acts, with national and various state law enforcement agencies being involved in the investigations of federal and serious statewide crimes. For breaches of state laws, local and county police take precedence over such cases, which include crimes like kidnapping and robbery within state boundaries, often receiving comparatively lenient sentences.
Noteworthy Cases of Racketeering
The DOJ’s notable cases involve substantial charges and penalties, including the indictment of South Carolina gang members in 2020, opioid manufacturer lawsuits in Kansas and Missouri in 2018, and high-profile convictions like those of FIFA officials and notorious street and police gangs involved in extensive criminal enterprises.
FAQs on Racketeering
Is Racketeering a Felony?
Yes, racketeering is characterized by committing, conspiring to commit, or soliciting others into specified felony crimes, including gambling, extortion, drug, weapon offenses, bribery, and more.
Is Racketeering the Same as Money Laundering?
While related, money laundering—distorting illegal funds to appear legitimate—can be a form of racketeering as part of broader criminal activities.
How Long Can You Go to Jail for Racketeering?
Penalties for convicted racketeers can start from a 20-year sentence, with enhancements for crimes involving higher severity, alongside significant fines.
Is The RICO Act Effective?
Absolutely, the RICO Act has proven instrumental, equipping law enforcement with effective measures to combat and dismantle organized criminal activities thoroughly.
Related Terms: extortion, money laundering, fraud, bribery, illegal activities.
References
- United States Sentencing Commission. “Primer: RICO Offenses (Racketeer Influenced and Corrupt Organizations)”, Pages 1-5.
- U.S. Department of Justice. “Infiltrated Labor Unions”.
- U.S. Department of Justice. “9-110.000 - Organized Crime And Racketeering”, Select 9-110.100 - Racketeer Influenced and Corrupt Organizations (RICO).
- United States Sentencing Commission. “Primer: RICO Offenses (Racketeer Influenced and Corrupt Organizations)”, Page 8.
- American Bar Association. “Judge Allows Class Action Claiming State Farm Secretly Orchestrated Illinois Justice’s Campaign”.
- United States District Court for the Southern District of Illinois. “Mark Hale, Todd Shadle, and Laurie Loger, on behalf of themselves and all others similarly situated, Plaintiffs, v. State Farm Mutual Automobile Insurance Company, Edward Murnane, and William G. Shepherd, Defendants”, Page 3.
- Office of the Law Revision Counsel, United States Code. “18 USC §1964 Civil Remedies”.
- State Farm. “State Farm, Plaintiffs Reach Compromise in Hale Class Action”.
- U.S. Department of Justice. “109. Rico Charges”.
- United States Sentencing Commission. “Primer: RICO Offenses (Racketeer Influenced and Corrupt Organizations)”, Pages 1, 8.
- United States Sentencing Commission. “Primer: RICO Offenses (Racketeer Influenced and Corrupt Organizations)”, Page 6.
- U.S. Department of Justice. “Federal Investigative Agencies”.
- INTERPOL. “What is INTERPOL?”
- LV Criminal Defense. “Racketeering RICO”.
- U.S. Department of Justice. “40 Charged in Largest Federal Racketeering Conspiracy in South Carolina History”.
- The Kansas City Star. “Counties File Federal Racketeering Cases Against Opioid Companies”.
- U.S. Department of Justice. “Nine FIFA Officials and Five Corporate Executives Indicted for Racketeering Conspiracy and Corruption”.
- U.S. Department of Justice. “Gang Leader Sentenced to 25 Years in Federal Prison in RICO Case”.
- U.S. Department of Justice. “Seven Baltimore City Police Officers Arrested for Abusing Power in Federal Racketeering Conspiracy”.
- Chicago Sun-Times. “Black Souls Leaders Hit with Multiple Life Sentences in Racketeering Case”.
- CT Office of Legislative Research. “Definition of Racketeering”.
