How do RICO charges take down organized white collar operations?

How RICO Charges Take Down Organized White Collar Operations

The Racketeer Influenced and Corrupt Organizations Act (RICO) is a federal law that provides for extended penalties for criminal acts performed as part of an ongoing criminal organization. RICO has been used to go after all kinds of organized criminal operations, including white collar crime rings.

RICO allows prosecutors to charge the leaders of a criminal organization for crimes that their subordinates committed as part of the criminal enterprise. This allows them to attach severe criminal penalties to the leaders for their role in orchestrating the criminal scheme.

Key Elements of a RICO Charge

For a RICO charge to stick, prosecutors must prove these elements:

• There was an ongoing criminal organization (doesn’t have to be mafia-like)
• The organization engaged in a “pattern” of criminal activity
• The crimes were committed to aid the organization in some way, shape or form
• The defendant participated in the operation or management of the organization

The “pattern” element requires that prosecutors show the criminal organization committed at least two criminal acts within 10 years of each other. The crimes can involve fraud, theft, embezzlement, money laundering, bribery, and more.

Using RICO Against White Collar Operations

RICO allows prosecutors to tie leaders of an organization to crimes they ordered others to commit or helped facilitate. This works well for going after sophisticated white collar criminal organizations.

For example, if a CEO directs his executives to bribe officials, falsify financial reports, or shred documents, he could be on the hook for a RICO conspiracy charge even if he didn’t directly engage in those acts himself.

Famous White Collar RICO Cases

• Enron Executives – For directing employees to commit accounting fraud & hide losses
• FIFA Officials – For orchestrating years of bribery & kickbacks
• Gambino Crime Family – For infiltrating a credit card processing company and stealing millions

RICO allows prosecutors to attach 20 year sentences, asset forfeiture, & heavy fines on leaders found guilty of racketeering conspiracy. This provides more leverage to take down criminal organizations operating sophisticated white collar schemes.

Using RICO to Target Assets

Another aspect that makes RICO charges so dangerous to white collar operations is that they allow prosecutors to seize assets obtained through illegal activity. This money laundering provision is key for dismantling complex criminal organizations.

The government can seize property, bank accounts, vehicles, businesses, and more that were derived from the criminal activity or helped facilitate it. This immediately cuts off resources allowing criminal leaders to flee prosecution or continue operating.

Asset Forfeiture in Action

In one case, federal officials seized over $5.5 million worth of assets from an outsourcing company that had defrauded its clients. The seizures included:

• 3 luxury vehicles – Maserati, Lamborghini, Rolls Royce
• 5 luxury watches – Rolex, Cartier
• $2 million in stock shares
• 10 bank accounts
• 2 commercial properties

This immediate seizure of assets often leads criminal leaders to seek plea deals rather than face trial and the possibility of losing millions more.

Challenges of Using RICO Against White Collar Crime

While RICO can be extremely effective at dismantling criminal organizations, building a successful RICO case has its challenges:

• Complex paper trail – Hard to trace money and connect dots across shell companies
• Expensive investigations – Wiretaps, informants, forensic accounting all costly
• Long investigations – Developing pattern of crime requires years of probing
• Bogged down courts – Huge paper trails lead to extremely lengthy, complex trials

Despite these difficulties, the prospects of getting enhanced sentences, seizing assets, and racketeering headlines has led more prosecutors to deploy RICO against white collar criminal organizations.

Famous White Collar Criminal Defenses

White collar criminals accused of racketeering often raise these defenses in attempting to fight the charges:

• No criminal intent – Argue the criminal acts were accidental or mistakes
• Rogue employees – Blame misconduct on low-level employees going rogue
• Statute of Limitations – Argue the criminal acts fall outside the 5 year limit
• Free Speech – For public corruption cases, argue that campaign contributions are protected political speech

However, RICO cases stem from lengthy investigations building patterns of criminal activity so these defenses are often overcome by prosecutors.

Implications of Using RICO Against White Collar Crime

The increased use of RICO against white collar crime rings brings important implications:

• Restores public trust by punishing corporate corruption harshly
• Complex investigations and trials drain government resources
• Business uncertainty as executives fear increased liability
• Potential overreach as prosecutors target fringe criminal activity

Despite some drawbacks, RICO remains one of the most potent weapons for dismantling deeply rooted criminal organizations – whether they wear suits or tracksuits.

References

Definition of racketeering activity
FIFA officials charged with corruption
Executives assets seized in RICO case