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Racketeer Influenced and Corrupt Organizations Act (RICO)

Racketeer Influenced and Corrupt Organizations Act (RICO)

RICO stands for the Federal Racketeer Influenced and Corrupt Organization Act.  The act was passed by Congress with the intent to stop people from engaging in a pattern of criminal activity.

RICO was originally applied primarily to organized crime, providing a way for the federal government to convict mobsters or gangsters for being a part of organized crime when they were unable to convict the defendants of specific crimes carried out by the mafia groups that they were a part of.

RICO and other laws criminalizing organized crime are a very complicated area of law that is very vague and ambiguous, so it is often left up to the courts to interpret what exactly the Racketeer Influenced and Corrupt Organization Act is supposed to mean.


Racketeering, broadly defined, is the operation of an illegal business (racket). This usually involves organized crime.

Criminal rackets may include the importation and sale of illegal drugs, prostitution rings, gambling, and other activities associated with money laundering or bribery. “Protection rackets” involve some criminal organization extorting money from businesses for “protection” against crimes, which would be committed by the criminal organization itself.

RICO and Racketeering: How Do They Relate?

Under federal law, racketeering is covered by the Racketeer Influenced and Corrupt Organizations Act (RICO). This law is so broad in scope that almost any criminal who commits multiple crimes can be charged under it. The law lists 35 crimes (murder, illegal gambling, drug dealing, kidnapping, etc.). Any person or group who commits 2 of those crimes in a 10 year period with the same purpose or effect, in a way that affects interstate commerce, can be charged with racketeering. 

Gang Affiliation Laws

In the United States, it cannot be a crime to be a member of a gang, because the First Amendment of the United States Constitution guarantees freedom of assembly. Every U.S. citizen has the right to join any group or club, no matter how offensive its espoused values may be.

However, many states have enacted laws focusing on gang affiliation to discourage the criminal behavior of gangs. The definition of a gang varies from state to state, especially when it comes to youth gangs. In general, however, the law in most states provides that a gang is an organization, group, or association of at least three people that has:

  • A common name that the group uses to identify itself and its members;
  • Identifying symbol(s);
  • Identifying sign(s), for example, hand gestures or the like;
  • Members who actively participate in crimes and may draw others into criminal activity.

Generally speaking, gang affiliation laws target people who might not necessarily be confirmed, card-carrying members of a criminal gang. However, they might be subject to criminal penalties due to their association with gangs, gang members or gang activity.

For instance, if a person is caught writing graffiti that is associated with a certain gang, that person's sentence for the crime of tagging might be enhanced because it is gang-related.

Federal Laws against Gang Affiliation

The federal government currently does not have any particular laws against gang affiliation per se. However, it does prosecute the members of criminal gangs or groups under the powerful federal law known as the Racketeer Influenced and Corrupt Organizations Act (RICO). The Racketeer Influenced and Corrupt Organizations Act is designed to fight organized crime. It enables prosecutors to seek criminal conviction and civil penalties as well for racketeering activity that is done as part of the operation of an ongoing criminal enterprise.

Racketeering is defined as operating an unlawful, criminal business. This sort of crime is typically associated with the mafia and other organized criminal enterprises.

Criminal penalties for a RICO conviction are 20 years in prison, but the term of imprisonment can be for life if the crime committed carries a maximum penalty of life imprisonment. Penalties also include forfeiture of any assets that the perpetrator acquired through their racketeering or gang activity. Civil penalties for a RICO criminal conviction depend on the individual or business in which the perpetrator engaged. Compensation is three times the damages suffered. Of course, participation in a racketeering crime under RICO also involves gang affiliation or gang membership.

Conviction under RICO requires the government to show that the perpetrator engaged in two or more instances of racketeering activity and that the defendant directly invested in, maintained an interest in, or participated in a criminal enterprise affecting interstate or international commerce. Among the criminal activities that can form the basis for a RICO conviction are committing or threatening murder, kidnapping, gambling, arson, robbery, bribery, extortion, dealing in controlled substances, and other crimes as well.

Do States Have Laws Against Gang Affiliation?

Many states have enacted their own state laws that are modeled on RICO. For example, the state of Georgia has its own Racketeer Influenced and Corrupt Organizations Act, modeled on the federal law and having a similar purpose and similar provisions. These laws provide penalties including imprisonment for criminal convictions and civil forfeiture of assets acquired through criminal activity.

An example of the type of criminal enterprise targeted by RICO and state RICO laws would be a group of people who associate together to cultivate and sell large amounts of marijuana, In addition they may engage in money laundering and identity fraud in order to promote their drug sales. The group must have some form of decision-making structure, with a leader and its members must work together for some period of time to operate the enterprise.

In order to combat growing gang violence many state legislatures have also enacted laws, such as California's law on Gang Affiliation Enhancement, that are designed to discourage gang affiliation and criminality. These laws aim to limit gangs and gang activity by enhancing the punishment for felony convictions. Even if a perpetrator is not a gang member but only participates in a crime committed by a game member, the gang sentencing enhancement could turn a three- to five-year prison sentence into a term of twenty years or more.

Some states, such as Georgia, make it unlawful for anyone to be employed by or associated with a criminal street gang to conduct or participate in criminal gang activity through the commission of any offense specified in the law; among the prohibited conduct is stalking, statutory rape, escape from imprisonment, criminal damage to property, any crime involving violence, possession of a weapon or use of a weapon and more;

The term “criminal street gang” is defined to include any organization, association, or group of three or more people who are associated together and engaged in criminal gang activity. The existence of a gang may be established by evidence showing that the group has a common name or common identifying signs, symbols, tattoos, graffiti, clothing or other distinguishing characteristics, such as common activities, customs, or ritual behavior.

In Texas, the state RICO laws authorize harsh penalties for violations. For any offense committed while a person is engaging in organized criminal activity, the offense is classified as a higher degree of offense than the most serious offense that was committed. For example, if the crime committed would be a Texas “Class A” misdemeanor, it would become a state felony punishable by a term in state prison. So, for example, if a person is a member of a criminal gang and commits a burglary of a home, the person would be charged with a first degree felony since burglarizing a home normally carries a charge of second degree felony.

Many states have laws that prohibit elementary and secondary students from wearing gang-related clothing while on school grounds. This type of law does not include school uniforms but refers to any type of clothing which indicates gang membership through the wearing of certain colors, for example, or types of clothing.

Many states also make it illegal for anyone to recruit a person to participate in a criminal gang if membership in the gang is conditioned on committing any kind of criminal offense. Of course, simply talking to another person about membership in a club or group would not be criminal, however using force or threats to coerce a person into a gang that is engaged in criminal activity could be a crime.

Texas has such a law. The state of Montana makes it illegal to intentionally threaten a minor, i.e., a person under 18 years old, with physical violence on two or more separate occasions in order to coerce, induce, or solicit the minor to actively participate in a criminal street gang whose members engage in a pattern of criminal street gang activity.

In Colorado it is a misdemeanor punishable by up to 18 months in jail and a fine of up to $5,000 for an adult to intentionally solicit or recruit a minor under the age of 18 to actively participate or become a member of a gang. In California, it is illegal to use threats of force or intimidation to coerce a person to join a criminal gang and the penalty is enhanced if the victim is a person under 18 years of age.  

Who May Be Held Liable for a RICO Violation?

There are several requirements that a defendant must meet in order to be charged with violating RICO, including:

  • The person must be employed or associated with a criminal enterprise
  • The person's activities must affect interstate commerce
    • Just about anything affects interstate commerce: if you use the telephone, internet, railroad, highways, waterways or mail you are using some kind of interstate commerce
  • The person charged must have participated with the organization through a pattern or racketeering activity
    • They look at whether this persons actions have the same or similar purpose, results, participants, victims and methods
  • The statute of limitations (when you can bring a lawsuit) for prosecuting a RICO violation is 5 years for criminal prosecution and 4 years for civil prosecution.

Proving RICO Violation Claims

Is it possible to prove that someone acquired or maintained an interest in an enterprise through racketeering activity?

RICO criminalizes the following activities:

  • Using money that is gained through unlawful racketeering
  • The collection of an unlawful debt to acquire, establish, or operate any enterprise that has an effect on interstate commerce
  • Acquiring or maintaining an interest in any organization through racketeering activity

In addition, the prosecution must prove that the defendant engaged in a pattern of racketeering. There must be a relationship between the acts in order for a pattern to exist, as well as a demonstration that the defendants did not just commit one crime but participated in an ongoing criminal scheme or activity over time.

In order to win a civil RICO claim, several elements must be proven. In order to prove racketeering activity, you must demonstrate that the defendant was employed by a business or enterprise engaged in or affecting interstate commerce, which the defendant operated or managed through a pattern of racketeering activity.

To convict someone under RICO or similar state law, the prosecutor does not have to prove that the individual personally committed an illegal act.

Prosecutors need only prove:

  • The defendant owns and manages an organization
  • The organization regularly performs one or more illegal activities
  • Plaintiff's business or property was injured as a direct or proximate result of the defendant's RICO violation

What Damages Can a Civil RICO Plaintiff Receive?

An injured party may bring a civil action to recover damages from a RICO violation. Plaintiffs must prove financial loss in order to recover from defendants. Civil damages can be recovered without waiting for the defendant to be criminally convicted.

When a plaintiff proves that they suffered financial damages as a result of a violation of the RICO in civil court, the federal court may order the defendant to:

  • Pay triple the amount of damages to the plaintiff
  • Pay the plaintiff's cost and attorney fees
  • Order the defendant to stop engaging in certain business activities
  • Dissolve the defendant's organization

Who Is Eligible as a Defendant in a RICO Claim?

Defendants can be either individuals or corporations as long as they engaged in criminal activities prohibited by RICO. The mere designation of an entity as a RICO enterprise does not entail any responsibility for it. It is necessary to identify a person.

Criminal Enterprise in a RICO Claim

In addition to legal entities such as partnerships, corporations, or other similar types of associations, enterprises can also be illegal entities, such as Mafia families.

A criminal enterprise must meet the following criteria:

  • Be an ongoing organization that functions as a unit
  • Have a common purpose
  • Exists separate and apart from the members that engage in the criminal activity

An enterprise does not have to have an illegal purpose. It is possible for a business purpose to be valid and legal, but it may serve only an illegal purpose. An entity or business can be legal and valid but make bribes for a number of years, for example.

Punishments under RICO

Criminal: Under RICO, any person who is found guilty of racketeering can get up to 20 years in prison and/or up to $25,000 in fines. Furthermore, any money or property used to commit the crimes, or gained from them, is forfeited to the government.

Civil: RICO also allows for individuals or businesses harmed by racketeering to sue for compensation. In this case, a plaintiff must prove the existence of a criminal enterprise, and some relationship between the enterprise and the defendant. The law allows anyone injured to recover 3 times the amount of actual damages suffered. So, if a criminal enterprise causes $1,000 in harm, the person harmed can recover $3,000 against them. 

How Can A Lawyer Help Me If I Am Being Accused of RICO Violations?

A racketeering conviction is punishable by up to 20 years in prison. A court can also impose heavy fines twice as much as the defendant's profits and gains. Federal RICO prosecutions and civil suits have very serious consequences and can be very expensive. If you are being investigated or have already been charged with a RICO violation, you should contact a criminal defense attorney who is experienced in defendant RICO cases.

Call the police if you are the victim of a RICO violation. In the event that there is sufficient evidence, the police will forward your case to the Attorney General's office to prosecute the person or organization that committed the RICO Violation against you.