RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1012
II. ELEMENTS OF THE OFFENSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1013
A. RICO Definition of “Person”. . . . . . . . . . . . . . . . . . . . . . . . 1014
B. Two or More Predicate Acts of “Racketeering Activity”. . . . . 1014
C. Pattern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1016
D. Enterprise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1018
1. Types of Enterprises . . . . . . . . . . . . . . . . . . . . . . . . . . . 1019
2. Proving the Enterprise . . . . . . . . . . . . . . . . . . . . . . . . . . 1021
3. Person-Enterprise Rule. . . . . . . . . . . . . . . . . . . . . . . . . . 1022
E. Effect on Interstate Commerce . . . . . . . . . . . . . . . . . . . . . . . 1022
F. Prohibited Acts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1023
1. Investment of Racketeering Proceeds . . . . . . . . . . . . . . . 1023
2. Acquisition of Enterprise Interest . . . . . . . . . . . . . . . . . . 1024
3. Conducting an Enterprise Through Racketeering Acts . . . 1025
4. Conspiracy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1026
III. DEFENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1026
A. Invalidity of One or More Predicate Acts. . . . . . . . . . . . . . . . 1027
B. Limitation of Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1027
C. Withdrawal from the Conspiracy . . . . . . . . . . . . . . . . . . . . . . 1028
D. “Horizontal Preemption” or “Primary Jurisdiction”. . . . . . . 1029
E. “Reverse Vertical Preemption”. . . . . . . . . . . . . . . . . . . . . . . 1031
F. Constitutional Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . 1032
IV. CRIMINAL PENALTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1035
A. Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1035
B. Sentencing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1035
C. Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1037
1. “Seize and Freeze” Orders . . . . . . . . . . . . . . . . . . . . . . . 1037
2. Rights of Innocent Third Parties . . . . . . . . . . . . . . . . . . . 1039
3. Attorney’s Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1039
V. CIVIL RICO ACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1040
A. Civil Penalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1040
B. Civil Cause of Action for Private Parties . . . . . . . . . . . . . . . . 1041
1. Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1042
2. The Person/Enterprise Distinction . . . . . . . . . . . . . . . . . . 1044
3. Statute of Limitations. . . . . . . . . . . . . . . . . . . . . . . . . . . 1045
VI. NON-TRADITIONAL USES OF THE RICO STATUTE . . . . . . . . . . . . . . . . . 1047
A. Protests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1047
B. Labor Unions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1048
C. Tobacco Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1048
1011
D. College Admissions Fraud . . . . . . . . . . . . . . . . . . . . . . . . . . 1050
E. Health Care Fraud . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1050
F. Police Misconduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1051
G. Cannabis Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1052
H. Wall Street Prosecution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1052
I. INTRODUCTION
Congress designed the Racketeer Influenced and Corrupt Organizations Act
(“RICO”) to combat organized crime in the United States.
1
RICO enhanced sanctions,
constructed new legal tools for prosecutors to use in the evidence-gathering process,
and created new remedies to tackle the unlawful activities of criminal syndicates.
2
Although RICO was enacted to target organized crime, Congress chose to enact a
broad statute reaching “criminal activity often operat[ing] wholly within legitimate
enterprises.”
3
Consistent with congressional intent,
4
courts have liberally construed
5
RICO to reach even legitimate businesses
6
and organizations without a profit motive.
7
However, the “liberal construction” clause is not without limits—it is “not an invita-
tion to apply RICO to new purposes that Congress never intended.”
8
Prosecutors invoke RICO in a wide variety of criminal contexts.
9
Given
RICO’s broad applicability, the requisite mens rea is merely that of the “predicate
acts,” or underlying offenses.
10
RICO imposes severe sanctions that supplement
1. Organized Crime Control Act of 1970, Pub. L. No. 91-452, 84 Stat. 922, 923 (codified as amended at U.S.C.
§§ 1961–1968).
2. See id. at 923.
3. H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 248 (1989).
4. See Organized Crime Control Act § 904(a) (mandating RICO Act “be liberally construed to effectuate its
remedial purposes”).
5. See Nat’l Org. for Women, Inc. v. Scheidler (NOW I), 510 U.S. 249, 257–58 (1994) (finding RICO statute
can be broadly applied to the detrimental activities of any group of individuals that “‘affect[s] interstate or
foreign commerce,” even without profit-seeking motives). The breadth of RICO, however, is the subject of much
criticism. See generally Neil Feldman, Note, Spiraling Out of Control: Ramifications of Reading RICO Broadly,
65 DEF. COUNS. J. 116 (1998); Douglas E. Abrams, Crime Legislation and the Public Interest: Lessons from Civil
RICO, 50 SMU L. REV. 33, 56–57 (1996).
6. Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 499 (1985).
7. NOW I, 510 U.S. at 258–59 (allowing RICO action against groups with no economic motive to proceed).
8. Reves v. Ernst & Young, 507 U.S. 170, 183 (1993); see also Att’y Gen. of Can. v. R.J. Reynolds Tobacco
Holdings, Inc., 268 F.3d 103, 129 (2d Cir. 2001) (concluding RICO’s text and legislative history do not afford a
civil remedy to a foreign nation for tax evasion by a U.S. company); Chappell v. Robbins, 73 F.3d 918, 921–23
(9th Cir. 1996) (declining to presume RICO abrogates common law legislative immunity protection absent clear
legislative intent or statutory language).
9. See generally G. Robert Blakey & John Robert Blakey, Civil and Criminal RICO: An Overview of the
Statute and Its Operations, 64 DEF. COUNS. J. 36, 43 (1997). Since the passage of RICO, thirty-three States have
adopted similar legislation to address organized crime within their respective jurisdictions. See J
OHN E. FLOYD,
AM. BAR ASS’N, RICO STATE BY STATE (2d ed. 2011).
10. See infra Section II.B (defining “predicate acts”); Gil Ramirez Grp., L.L.C. v. Hous. Indep. Sch. Dist., 786
F.3d 400, 412 (5th Cir. 2015); United States v. Rosenthal, 334 F. App’x 841, 843 (9th Cir. 2009); Bruner Corp. v.
R.A. Bruner Co., 133 F.3d 491, 495 (7th Cir. 1998) (noting mens rea requirement is satisfied if defendant knew
predicate offense was illegal); United States v. Baker, 63 F.3d 1478, 1493 (9th Cir. 1995).
1012 AMERICAN CRIMINAL LAW REVIEW [Vol. 61:1011
those of each underlying offense.
11
RICO also provides a private right of action for any person “injured in his busi-
ness or property” by a RICO violation.
12
The Attorney General
13
or a private plain-
tiff
14
may bring a civil action in either state or federal court,
15
and if a final
judgment is entered against the defendant in any criminal proceeding also brought
under RICO, the defendant is estopped from denying the predicate acts in subse-
quent civil proceedings.
16
RICO provides equitable relief through the divestiture of
the defendant’s interest in the relevant enterprise(s), restrictions on the defendant’s
future activities or investments, and “dissolution or reorganization of any enter-
prise” at issue.
17
While this Article focuses primarily on the criminal aspects of
RICO, the close relationship between criminal and civil RICO actions necessitates
some discussion of civil cases.
This Article generally addresses RICO prosecutions for white collar crimes.
Section II discusses the elements of a RICO offense. Section III addresses potential
defenses to RICO prosecutions. Section IV addresses criminal penalties for RICO
violations, including those under the United States Sentencing Guidelines
(“Guidelines”). Section V discusses civil RICO offenses. Section VI details recent
developments in this area of law.
II. ELEMENTS OF THE OFFENSE
RICO prohibits “any person”
18
from: (i) “using income derived, directly or indi-
rectly, from a pattern of racketeering activity or through collection of an unlawful
debt”
19
to acquire an interest in an enterprise affecting interstate or foreign com-
merce;
20
(ii) acquiring or maintaining any interest in any enterprise engaged in inter-
state or foreign commerce “through a pattern of racketeering activity or through col-
lection of an unlawful debt”;
21
(iii) conducting or participating in the conduct of the
affairs of an enterprise, which affects interstate or foreign commerce, “through a pat-
tern of racketeering activity or collection of unlawful debt”;
22
or (iv) conspiring to
participate in any of these activities.
23
11. 18 U.S.C. § 1963.
12. Id. § 1964.
13. Id. § 1964(b).
14. Id. § 1964(c).
15. See Tafflin v. Levitt, 493 U.S. 455, 458 (1990). RICO also reaches foreign conduct if the acts establishing
a pattern of racketeering violated a predicate statute that is itself extraterritorial. See RJR Nabisco, Inc. v. Eur.
Cmty., 579 U.S. 325, 340 (2016).
16. 18 U.S.C. § 1964(d).
17. Id. § 1964(a).
18. Id. § 1962(a).
19. Id.; see generally id. § 1961(6) (defining “unlawful debt”).
20. Id. § 1962(a).
21. Id. § 1962(b).
22. Id. § 1962(c).
23. Id. § 1962(d).
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