Brilliant: RICO Now Being Used Against Cybercriminals

The Racketeer Influenced and Corrupt Organizations Act (RICO) was enacted in order to battle organized crime, specifically the mafia. But as of late, it has become quite the versatile tool, being employed in combating gang crime in Chicago and even more intriguingly, cyber crime.

Now, the government has its test case, in the form of a pudgy-faced, relatively low-level criminal named David Ray Camez. Though Camez is already serving a seven-year state prison term, federal RICO charges could lengthen that sentence greatly. Most of his co-defendants have already taken plea deals. He refuses, however, arguing that there was no organization -- only individual criminals selling on a website akin to craigslist or eBay.

The Sting

It was called Operation Open Market. Wired was the first outlet to report the specifics of the operation. After a low-level purchaser of fake IDs and stolen credit card information was caught at a Whole Foods in 2007, the U.S. Secret Service appropriated his online moniker and reputation to become a trusted vendor on other underground websites, eventually selling more than 100 fake IDs to criminals worldwide, many of which have not yet been recovered.

The most brilliant part? For each transaction, the government has the photo of the suspect (for the ID), as well as a shipping address. Plus, according to Wired, some of these fake IDs, specifically those from Nevada, were created with the DMV's cooperation. While the information on the cards may be fake, the cards themselves are real -- and apparently indistinguishable from official IDs.

As for the alleged criminals, 22 of the 28 who have identified and arrested are low-level suspects like Camez. Out of the 27 charged vendors, only six were based in the United States and have been identified, arrested, and charged. Eight are only known by their online nicknames, while 13 more are located in foreign jurisdictions.

The Law

The strength of RICO is that it holds every member of the conspiracy responsible for the acts of the whole. In other words, Camez, as well as any apprehended co-defendants, can be held liable for every single transaction that ever occurred on the forum.

In order to prove RICO charges, there has to be an overlying enterprise, as well as predicate offenses. According to Wired's reports of the opening statements, the defense's strategy seems to be arguing that there was no overall conspiracy, enterprise, or organization -- only dozens of independently-acting criminals, meeting, wheeling, and dealing. It should be interesting to see if the site's escrow system (to prevent rip-offs) and user feedback system are enough to convince the jury that this was more than a criminal craigslist.

As for predicate offenses, that should be the easy part: forging official documents and running an unlicensed money transmitting business both qualify, as does engaging in monetary transactions in property derived from specified unlawful activity.

The Effect

RICO's biggest effect on organized crime, arguably, came from the cooperation of criminal defendants facing lengthy sentences. While ordinary charges may result in six or seven years in prison, RICO can result in decades or more behind bars. Faced with such a lengthy sentence, defendants are far more likely to cut deals and cooperate, helping the government to take down entire underground websites.

In short, if RICO works here, it may become the federal government's biggest asset in battling cybercrime.

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Related Resources:

• It's Baaaack: Silk Road 2.0 Is Here (FindLaw's Technologist Blog)
• Sloppiness, Social Media Led to Silk Road Founder's Capture (FindLaw's Technologist Blog)
• Real Life 'Breaking Bad'? Silk Road Founder Indicted, Site Seized (FindLaw's Technologist Blog)
• FindLaw's Legal Technology Center (FindLaw)