RICO Charges: Types You Need To Be Aware Of

RICO charges

The Racketeer Influenced and Corrupt Organizations Act, or RICO Act, is a federal statute that greatly enhances criminal and civil penalties for criminal conduct that engages in an “enterprise” of “racketeering activities.” Passed in 1970, its legislative history and early implementation was focused on the five mafia families of New York City. It was needed to combat their infiltration into legitimate businesses and unions. The RICO Act, however, encompasses a wide variety of blue and white-collar activities.

The Federal Government has ample resources to investigate crimes, and RICO penalties are significant. They carry $25,000 fines and 20 years imprisonment per RICO conviction, as well as forfeiture of all ill-gotten gains. RICO also allows triple damages to any successful claimant in a civil action. The steep penalties of RICO often lead to the defendant pleading out to lesser crimes and offering to cooperate.

RICO Charge Elements

A “racketeering activity” is defined by the statue. They include breaking state laws such as murder, gambling, bribery, extortion, kidnapping, drug dealing, or arson. They also include federal crimes like bankruptcy fraud, embezzlement, money laundering, human trafficking or slavery, and terrorism. While not an exhaustive list, it is clear the scope of a RICO charge can touch many activities, but the state or plaintiff must still show it was an enterprise.

An enterprise is evidenced by a “pattern” and “continuity” of actions. A pattern, as defined by the RICO statute, requires two racketeering activities occurring within ten years of each other, excluding prison time. These are called “predicates.” The exception to the two predicate rule is the collection of an unlawful debt, which is enough by itself.

It is not enough that simply two predicates were committed within ten years to show an enterprise. They must be continuous or related. Evidence of a relationship can be the same method of crime, same victim, for the same purpose, or anything that can show the predicates were not isolated events.

Continuity can be extended beyond an ongoing enterprise. Past behavior that suggests future behavior may be enough. For example, the ex-mobster in witness protection, which starts mafia-type activity in their new community, may meet the continuous requirement.

Notable Examples Of RICO Charges

A variety of real-life examples can illuminate the scope and possible applicability of RICO charges. Frequently, the accused plead guilty to lesser charges or offer cooperation than risk-taking on RICO’s harsh penalties of 20 years per count. RICO also requires disgorgement of any ill-gotten gains. In pursuit of this, a RICO indictment can immediately freeze the defendant’s assets, which can further incentivize the accused to plead out or cooperate.

Mafia – The prominence of the mafia in RICO’s creation and application demands one of its cases be highlighted. The Bonanno crime family’s boss, Joseph Massino, faced 11 RICO counts in May 2004. The RICO charges were predictable for a mafia case. They included murder, extortion, loan sharking, arson, and money laundering. Immediately after the conviction, Massino contacted the judge and offered his cooperation, becoming the first mafia boss ever to cooperate with authorities.

Other Gangs – Likewise, RICO charges have been levied against gangs like the Hell’s Angels and Latin Kings for similar crimes and drug dealing, with mixed success. In the Hell’s Angel’s case, the government failed to show the acts were part of the Hell’s Angel’s enterprise; therefore, higher-ups in the organization were not liable for the acts of the underlings.

Politicians – While being the Louisiana Commissioner of Agriculture and Forestry, Gil Dozier required companies doing business with his agency to make political contributions. He was convicted of five RICO counts for extortion and racketeering, serving four years before a presidential pardon in 1986.

Insider Trading and Wire Fraud – Michael Milken was accused of 98 counts of racketeering and fraud related to manipulating stock and bond prices. He was one of the first non-organized crime figures to face RICO charges. As is often the case when facing RICO charges, Mr. Milken pleaded guilty to six lesser counts and served 22 months in jail.

Securities fraud and Ponzi schemes – In 1995, Congress amended the RICO Act to exclude securities fraud. Both Scott Rothstein and Bernie Maddoff, convicted of securities fraud and running Ponzi schemes, were indicted on RICO charges. While Rothstein pleaded guilty to lesser charges and cooperated, Maddoff appealed the applicability of RICO. Upon review, the appellate court agreed that securities fraud had been excluded from RICO, and those charges were dropped.

Contact An Experienced RICO Defense Attorney Today

Are you being investigated or indicted on a RICO charge? The level of expertise and resources of the Federal Government combined with the steep penalties of RICO charges, can be downright scary. Hire a top Houston area defense law firm of Vinas & Graham. As former felony prosecutors, they understand RICO and can help protect your future and your assets. Contact us today, and please feel free to follow on Facebook.