Federal RICO Charges Under 18 USC 1962: Racketeer Influenced and Corrupt Organizations
So your probably facing federal RICO charges and your ABSOLUTELY SHOCKED because you thought RICO was only for mafia bosses and organized crime families. Maybe you operated business that prosecutors claim was criminal enterprise. Maybe there’s allegations you committed multiple crimes as part of ongoing organization. Or maybe prosecutors are charging you with racketeering for conduct you thought was just regular fraud or theft. Look, we get it. Your COMPLETELY TERRIFIED by RICO charges. And you should be! Because RICO under 18 USC 1962 carries 20 YEARS or LIFE in federal prison and MANDATORY forfeiture of ALL property connected to enterprise – and prosecutors use RICO far beyond traditional organized crime to target street gangs, businesses, and even protest groups!
What Is Federal RICO Under 18 USC 1962?
Let me explain the statute designed to dismantle organized crime that now targets wide range of conduct. RICO stands for Racketeer Influenced and Corrupt Organizations Act passed in 1970 to combat mafia’s infiltration of legitimate businesses! Four separate ways to violate RICO under subsections (a) through (d)!
The statute requires ENTERPRISE plus PATTERN OF RACKETEERING ACTIVITY! Enterprise is any group of individuals associated in fact – doesn’t need to be formal organization! Pattern means at least TWO predicate acts of racketeering within ten years!
Here’s what’s really scary – RICO applies to activities of enterprises affecting interstate or foreign commerce! Since almost ALL businesses affect interstate commerce, RICO has nationwide application! Local street gang? Federal RICO jurisdiction! Small business fraud? RICO applies!
Predicate acts are specific federal and state crimes listed in statute! Murder, kidnapping, gambling, arson, robbery, bribery, extortion, drug dealing, fraud, obstruction of justice – list of over 30 federal offenses plus certain state crimes! Commit two of these within ten years as part of enterprise? That’s RICO!
What Are Four Ways to Violate RICO?
Section 1962 has FOUR subsections creating different RICO violations!
Section 1962(a): Investing proceeds of racketeering in enterprise! Using money derived from pattern of racketeering to acquire interest in, establish, or operate enterprise affecting interstate commerce! Classic mafia tactic of using drug money to buy legitimate businesses!
Section 1962(b): Acquiring or maintaining interest in enterprise through racketeering! Using extortion, violence, or other racketeering acts to take control of business or organization! Forcing business owners to sell through threats!
Section 1962(c): Conducting affairs of enterprise through pattern of racketeering! Being employed by or associated with enterprise and conducting its affairs through pattern of racketeering activity! MOST commonly charged RICO violation! Running business by committing crimes!
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(212) 300-5196Section 1962(d): Conspiring to violate 1962(a), (b), or (c)! Agreeing to invest racketeering proceeds, acquire enterprise through racketeering, or conduct enterprise through racketeering! RICO conspiracy charge! Don’t need to prove pattern was completed – just agreement!
Prosecutors LOVE 1962(c) and (d)! Section (c) is substantive RICO violation requiring proof of enterprise and pattern! Section (d) is RICO conspiracy requiring only agreement! Often charge both – substantive RICO plus RICO conspiracy as separate counts!
What Is “Enterprise” Under RICO?
Broadly defined to include almost any group or organization!
Enterprise includes “any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact”! Two types: legal entities (corporations, partnerships) and associated-in-fact enterprises (informal groups)!
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Associated-in-fact enterprise is “group of persons associated together for common purpose of engaging in course of conduct”! Doesn’t need formal structure, charter, or hierarchy – just ongoing organization with common purpose! Street gang? Enterprise! Group of people committing fraud together? Enterprise!
Enterprise must have existence separate from pattern of racketeering! Can’t just be group committing crimes – must have some organizational structure or common goal beyond just criminal activity! Evidence of ongoing organization and functioning as continuing unit proves enterprise!
You ran a used car dealership for 15 years, and now federal prosecutors are claiming your business was a front for a racketeering enterprise because two of your employees were caught rolling back odometers and forging title documents on dozens of vehicles. The indictment under 18 USC 1962(c) lists wire fraud, mail fraud, and money laundering as the predicate acts, and suddenly your entire life's work is being called a 'criminal enterprise.'
How can they call my legitimate business a RICO enterprise when I didn't even know my employees were doing this?
Under 18 USC 1962(c), prosecutors must prove you conducted or participated in the conduct of an enterprise's affairs through a pattern of racketeering activity — meaning at least two predicate acts within a ten-year period. The government doesn't necessarily need to prove you personally committed every act, but they do need to show you had some role in directing or participating in the enterprise's operations. A strong defense strategy here involves challenging the 'pattern' element established in H.J. Inc. v. Northwestern Bell, which requires showing the predicate acts are related and pose a threat of continued criminal activity — not just isolated employee misconduct. We would also aggressively contest whether you had the requisite knowledge and intent, because RICO was never meant to turn an employer into a racketeer over the unauthorized actions of rogue employees.
This is general information only. Contact us for advice specific to your situation.
But courts interpret this VERY loosely! Small loose-knit groups qualify as enterprises! Five people working together to commit fraud with minimal coordination can be enterprise! Don’t need bosses, lieutenants, formal meetings!
Enterprise need NOT be criminal organization! Legitimate businesses can be enterprises for RICO purposes if operated through pattern of racketeering! Corporation engaging in mail fraud? Corporation is enterprise, fraud is racketeering activity!
