By FindLaw Staff | Legally reviewed by Evan Fisher, Esq. | Last reviewed December 17, 2021
This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw’s team of legal writers and attorneys and in accordance with our editorial standards.
The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area.
Racketeering is not a single crime or a single criminal act, but an organized scheme. It may include many different crimes occurring over a period of time. When the Racketeer Influenced and Corrupt Organizations Act (RICO Act) was passed in 1970, Congress used it to fight organized crime in the traditional sense, as depicted in movies like "Scarface" and popular television shows like "The Sopranos," but the law has also been used in a variety of other ways. Many states have enacted laws similar to the federal RICO Act.
This article explains the crime of racketeering. It discusses the scope of the law used to bring racketeers to justice. It shares examples of criminals charged under RICO and the civil and criminal punishments.
According to the U.S. Department of Justice:
"It is unlawful for anyone employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt."
While this does not completely define racketeering, it identifies key requirements:
Federal racketeering charges cover crimes committed using extortion or coercion, not just physical violence.
RICO also introduced the concept of "predicate acts": criminal offenses that are used to carry out a more serious crime. Blackmail, extortion, and wire fraud, for example, may be needed to carry out a later theft crime. They are therefore predicate acts.
These crimes involve the operation or use of a business. While the business itself may be legitimate, it may be used to run an illegal scheme. The business may be a "front" for laundering money or other concealed criminal activity.
According to the Old English Dictionary, the term first appeared in England in 1810. It referred to pickpockets who used loud diversions to distract their victims. The word appeared again in the U.S. during Prohibition. It referred to a dishonest or fraudulent line of business or swindling scheme.
During Prohibition, the production and distribution of illegal alcohol created a new class of criminal mobs. Skyrocketing profits from alcohol and related crimes led to the rise of the infamous mafia families of New York: the Gambinos, Genoveses, Luccheses, Bonnanos, and Colombos.
Before Congress enacted RICO, state and federal prosecutors found it very difficult to end these rackets. They could easily convict lower-ranking members of the gangs because they were the ones who actually performed the illegal activities. However, the masterminds behind the organized crime rings were harder to prosecute because they lacked direct connections to any of the crimes.
The RICO statute was designed to change that.
In 1970, Congress enacted the Racketeer Influenced and Corrupt Organizations Act, or RICO (18 U.S.C. section 1961). It (and equivalent state laws) provided prosecutors with the tools they needed to fight organized crime. It was no longer necessary to prove that a mob leader personally committed the crime.
Racketeering charges are often used to bring down criminal operations and crime rings. The RICO Act applies to thirty-five different criminal offenses. It covers crimes frequently associated with organized crime, such as illegal gambling, prostitution, collection of unlawful debt (protection money), counterfeiting, money laundering, kidnapping, and murder for hire.
RICO extends far beyond that, covering a diverse array of federal crimes, such as:
Recently, the federal government used RICO to prosecute college test administrators involved in admissions cheating. The Justice Department even debated using RICO to charge defendants in the January 6 coup attempt on the U.S. Capital.
There are four ways to violate the criminal provisions of RICO laws.
According to the U.S. Justice Department, in order to successfully convict someone on federal racketeering charges, federal prosecutors must prove that:
Wherever there is money, there are people looking for ways to steal that money.
With the rise of labor unions in America, organized crime found ways to infiltrate unions. Using bribery, coercion, extortion, and embezzlement they gained control over employee benefit plans. This is known as labor racketeering. It deprives workers of their union rights, robs them of wages and benefits, and damages business competitiveness.
The Offices of Inspector General and the Department of Labor investigate labor racketeering and union corruption.
Organized crime evolved beyond street crime. In 1997, New York law enforcement believed that mob families were turning to healthcare fraud. Now, organized crime rings have been tied to credit card fraud and other white-collar crimes.
Organized crime families are not the only ones facing criminal charges under RICO laws. American politicians found guilty of racketeering charges include:
Law enforcement and the officials in the criminal justice system are not immune from racketeering.
RICO allows for both civil remedies and criminal punishments. Companies and individuals can use civil RICO to sue criminal enterprises to recover financial losses. The civil RICO statute allows a successful plaintiff to recover treble damages—that is, three times their losses.
Government lawsuits can achieve equitable or injunctive relief — orders that stop parties from continuing harmful activity or force them to make corrective action. For example, when tobacco companies were found in violation for misleading the public about the health risks of their products, they had to pay into a fund for victims.
When a person is charged with racketeering, they are often also charged with a variety of other crimes. They will face a criminal penalty for the racketeering charge: up to twenty years in prison and a fine of $250,000, in addition to penalties for the other criminal charges. Racketeering combined with drug trafficking or murder could easily amount to life imprisonment.
RICO also allows the Attorney General to seize the assets of both the convicted person and the criminal organization. They can seize assets or interests acquired from the use of criminal activity, including homes and businesses.
If you believe racketeering has affected your life or your business, or if you are being investigated for potential involvement in a problematic business scheme, contact a local criminal defense attorney.
Contact a qualified criminal lawyer to make sure your rights are protected.
Get tailored advice and ask your legal questions. Many attorneys offer free consultations.