Many states have enacted racketeering laws to prosecute organized crime, as well as otherwise legitimate businesses that participate in criminal activity. Racketeering laws allow state prosecutors to bring all of an organization's different criminal acts together in one single prosecution. These state laws, called Little RICO Acts, are often patterned on the federal Racketeer Influenced and Corrupt Organizations (RICO) law.
Little RICO Acts authorize criminal prosecutions, which can result in imprisonment and forfeiture (government seizure) of money or property obtained as a result of illegal activity. Sometimes, civil lawsuits are also possible, in which those harmed financially by the illegal activity can sue the perpetrators for damages.
In most states, to successfully prosecute the defendant(s), the prosecutor must show:
For example, if a group of people came together to cultivate and sell large amounts of marijuana and engaged in money laundering and identity fraud to further their drug sales, that would probably be considered a pattern of racketeering. In order for this group to be considered a criminal enterprise, it must have some decision-making structure, such as a leader or democratic control, and its members must work together for a period of time.
In order to establish a pattern of racketeering, the prosecutor must show that the defendant(s) committed two or more predicate crimes, which will vary depending on each state's laws.
Predicate acts can include murder, kidnapping, robbery, theft, drug crimes, and different types of fraud. The federal RICO law has a long list of federal predicate crimes. Some states have their own lists of predicate crimes. Other states limit predicate acts to crimes or felonies under state law. In some states, the defendant must have committed the crime for financial gain before in order for the offense to be considered a predicate act.
Time period. Some states follow federal law and require a minimum of two predicate crimes in ten years (not including any period of imprisonment). In other states, the time period is different.
What constitutes a pattern? In almost all states, the prosecutor must show a relationship between the different predicate acts and show that the defendant(s) did not merely commit one crime but participated in ongoing criminal activity. Some states, but not all, require that the predicate acts be committed by some of the same people.
For example, one act of insurance fraud, even if committed by a group of people, does not show a pattern. Numerous acts of insurance fraud over several years, using the same method, and committed by a revolving cast of patients and doctors, do show a pattern.
Most, but not all, state laws also require a criminal enterprise. A criminal enterprise is a separate entity (such as a corporation or partnership) or a group of individuals working together.
Usually, to constitute a criminal enterprise, the group must:
For example, two people who come together one time to bribe a judge would not constitute a criminal enterprise. However, if the same two people worked together for many months to bribe several judges in order to obtain favorable rulings in cases that affected their businesses, they might constitute a criminal enterprise.
Often, in order to be convicted of violating state RICO laws, the defendant(s) must exert some control or exercise some discretion (independent decision-making) in the management or operation of the group.
Many states also provide for forfeiture of any property earned or maintained through racketeering. This means that the government obtains legal title to the defendant's assets. For example, anything owned by a criminal enterprise, including land, vehicles, and cash, can become the property of the state government after a civil forfeiture proceeding.
In addition to criminal prosecutions, some states also permit civil suits by private citizens (plaintiffs) who have suffered financial harm because of racketeering.
One example of a plaintiff might be a doctor whose workers' compensation insurance claims were being wrongfully denied because the insurance company was working with another medical provider to produce sham examinations and deny the doctor's patient's legitimate claims. The wronged doctor could sue for the revenue lost when the insurance company refused to pay for the doctor's services.
In order to state a successful civil RICO claim, the plaintiff must show:
The link between the violation and the injury cannot be too remote or indirect.
If the plaintiff can prove a RICO violation and resulting injury, the court can order the defendant to:
Being convicted of a RICO violation or losing a civil RICO case can result in serious consequences, including imprisonment, substantial damages or fines, and forfeiture of assets. If you are charged with a RICO violation or named the defendant in a civil RICO suit, you should contact an attorney who has experience defending such suits as soon as possible. An attorney will be able to tell you how your case is likely to fare in court and help you prepare the strongest defense.