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Racketeer Influenced And Corrupt Organizations (RICO)

RICO’s civil cause of action permits private plaintiffs to recover treble damages where the plaintiff’s business or property is injured because of the defendant’s RICO violation.  Most commonly, a civil RICO claim alleges damages resulting from an enterprise in which the defendants were associated and in the conduct of which the defendants participated, through a pattern of two or more racketeering activities.  More traditional racketeering activities such as bribery, robbery, extortion, and illegal gambling operations are included.  Critical to business plaintiffs, however, is that mail, wire, tax, bank, and bankruptcy fraud, as well as money laundering, are also included racketeering activities.

Primarily enacted as a criminal statute, the Racketeer Influenced and Corruption Organizations Act (RICO) includes a civil provision within Title IX of the Organized Crime Control Act of 1970. This section authorizes private treble-damage actions, which permits courts to award three time the amount of damages that a plaintiff requests.

For years since the passing of this law, the civil provision has rarely been used. However, claims are being filed to use this provision in contexts that are far removed from the original vision of addressing racketeering and organized crime.

 

What is RICO Law?

RICO law is the prosecution and defense of individuals who participate in organized crime activities. The RICO law was passed by Congress in 1970 as a way to combat Mafia groups. Since that time, the law has greatly expanded. Now, it is also used to target organizations ranging from motorcycle gangs to police corruption.

One thing that distinguishes RICO from other criminal or civil laws is the way it is applied. Rather than pursue an isolated criminal act, a pattern of wrongdoing is sought among individuals who are members of an alleged criminal enterprise.

The collection of RICO laws include severe consequences when the economic activities of criminal organizations involve illegal activity, known as racketeering. Being convicted for a RICO violation includes heavy fines, financial restitution for victims and up to 20 years in prison. Conviction also calls for the dissolution of the organization.

The following illegal activities qualify as racketeering and are listed in federal and state statutes:

  • Counterfeiting
  • Drug trafficking
  • Embezzlement
  • Fraud
  • Gambling
  • Kidnapping
  • Murder
  • Theft

Anyone who is injured by a RICO violation, whether it is their business or property, can file a civil suit. They have the right to seek a compulsory award that is three times the damages, costs and attorney’s fees for the lawsuit.

Proving a Civil RICO Claim

To have a successful civil RICO claim, the plaintiff must be able to prove two thing:

  1. The plaintiff suffered an injury to his or her business or property
  2. The injury was caused because the defendant violated the RICO statute

Being a defendant in a civil RICO claim does not mean that you were also criminally convicted. However, the plaintiff must prove there was concrete financial loss.

Elements of a RICO Claim

Liability for a violation of RICO requires the individual to be involved in an organization that has a pattern of racketeering activity. To prove this, there are specific elements that apply: enterprise, predicate acts, a pattern of racketeering activity and continuity.

Enterprise

Determining the enterprise is the first step for a RICO case. The enterprise involved in a RICO claim can either be legitimate or illegitimate. Additionally, it may also be a loosely associated group or a corporate entity.

Other technicalities such as defendant/enterprise distinction and the essential connection to predicate acts must be part of the plaintiff’s strategy. A defense attorney will attempt to deconstruct an alleged enterprise that does not "fit in to the box" of these technicalities.

Predicate Acts

Predicate acts is another element required in all RICO claims. These acts of racketeering activities are independently illegal crimes. Some of the offenses include in this group are:

  • Bribery
  • Extortion
  • Kickbacks
  • Wire or mail fraud
  • Money laundering
  • Illegal gambling

Plaintiffs must define predicate acts while also making sure the actions occurred within the statute of limitations. An attorney for the defendant must question whether certain predicates were sufficiently pled according to Rule 9(b) of the federal law’s Rules of Civil Procedure.

Pattern of Racketeering Activity

For a RICO claim to be successful, predicate acts of racketeering must show a pattern where multiple instances happened. Generally, the alleged enterprise must have committed the predicate acts or the plaintiff must show that money or other proceeds from those acts were connected to the enterprise.

Continuity

Continuity, means the activity has occurred over a substantial period of time, or continues in the present. There are a few ways for this to be established, including the fact that racketeering is the enterprise’s way of conducting business.

Contact us today so we can have the opportunity to help you establish a case. We have no upfront fees and operate on a contingency basis, which means you owe us nothing unless we win your case.