Legal Question: What's All This Racket-eering?

This week’s question comes from Katie M.

“What EXACTLY is racketeering? I hear it all the time but have no actual concept of what it is.”

Excellent question, Katie. When most people hear the word “racketeering,” they think of the Mafia, which is spot on. When criminals get together and commit crimes repeatedly as part of a greater organization to make money, this “business” is called a racket. The mafiosos who participate in the racket are engaged in “racketeering.” The statutory definition is actually really broad by design so the feds can drag more bad guys in their net.

The federal racketeering law is officially called the Racketeer Influenced and Corrupt Organizations Act, commonly referred to as the RICOA or the RICO Act. This law was instrumental in punishing crime bosses because it allowed them to be charged for acts that they ordered others to commit. It closed the loophole that previously allowed a lot of crime bosses to get away with simply ordering other mobsters to commit murders and other crimes on their behalf.

Criminal Penalties for Racketeering

To convict someone of criminal racketeering charges, the government must prove five things beyond a reasonable doubt. The five requirements are in bold. My comments are in italics.

The government must prove beyond a reasonable doubt:

(1)  that an enterprise existed; The exact definition of an “enterprise” is super vague, pretty much on purpose. “Any individual or group of individuals”can be considered an enterprise. It doesn’t have to be an official legal entity like a corporation and doesn’t even have to involve more than one person.

(2)  that the enterprise affected interstate commerce; This is because, under the Constitution, the federal government only has jurisdiction over crimes that affect interstate commerce. Interstate commerce is also a pretty broad concept. We spend about half a semester on it in law school, but generally if something touches money wires, involves the internet, or crosses state lines, it can be said to affect interstate commerce.

(3)  that the defendant was associated with or employed by the enterprise; The defendant does not actually have do the act to get busted. He just has to be associated with the enterprise. This is how crime bosses are charged for murders they ordered their underlings commit for them.

(4)  that the defendant engaged in a pattern of racketeering activity; “Pattern” is super loose on purpose as well. There have been several SCOTUS decisions discussing what constitutes a pattern. Generally, it’s when there is evidence of past or possible future racketeering activities, also known as “predicate acts.”

and

(5)  that the defendant conducted or participated in the conduct of the enterprise through that pattern of racketeering activity through the commission of at least two acts of racketeering activity as set forth in the indictment. The standard is basically the commission of 2 acts in a span of 10 years.

If the government can prove all five of those elements, the defendant faces some pretty severe penalties. The underlying criminal acts, known as “predicate acts,” under the RICOA include murder, drug trafficking, human trafficking, gambling, securities fraud, money laundering, and mail and wire fraud, among others. If the predicate act was murder, the defendant could face life in prison. Otherwise, the defendant could face twenty years in prison or more under federal sentencing guidelines.

The passage of the RICO Act also revived the concept of asset forfeiture, meaning the government can seize the ill-gotten gains from the racketeering activities, in addition to assessing fines.

Critics of the RICO Act have called it “an arbitrary penalty enhancer and prosecutorial bargaining tool.” The criticism follows that if prosecutors have the possibility of charging a defendant of multiple lesser crimes or charging them under RICOA, the prosecutor can threaten the RICO charge which carries stricter penalties in order to extract a guilty plea to the lesser charges.

This was the case with Michael Vick, the football player who participated in a dog fighting ring. Prosecutors were ready to charge Vick under the RICOA, but they instead accepted a guilty plea to a lesser charge to avoid the necessity of a trial. Vick’s guilty plea was extracted under threat of a RICOA charge and its 20-year possible sentence, exactly the scenario critics described. Side note: the “30 for 30” episodes on Vick discuss this, and they are incredible.

Civil Penalties for Racketeering

Individuals who have been damaged by the commission of a RICO action can also sue in civil court under the RICO Act to recover damages. In fact, several New England Patriots fans attempted to sue the NFL for racketeering based on the organization’s handling of the Tom Brady Deflategate scandal. A federal judge was not convinced, however, and the lawsuit was dismissed.

Other Famous Cases of Racketeering

One of the most famous racketeering convictions was that of Gambino crime family boss, John Gotti. The predicate acts that made up his racketeering charges included five murders, illegal gambling, obstruction of justice, and tax evasion. Because at least one of the predicate acts was murder, Gotti was eligible to be sentenced to life in prison, which he was.

William Rick Singer, the “mastermind” behind the college admissions scandal that saw Aunt Becky from Full House and Felicity Huffman in hot water, pled guilty to racketeering charges for running the whole enterprise. The predicate acts for his racketeering charge were things like mail fraud and wire fraud. He hasn’t been sentenced yet but faces up to 65 years in jail, fines, and forfeitures of the money he made from the bribes.  

More recently, an anonymous source formerly affiliated with the Justice Department told Reuters that the government was exploring possible ways to charge the Capitol rioters with racketeering. The official DOJ spokesperson has not confirmed this. However, Senator Dick Durbin has advocated for using all available statutes to prosecute the rioters, including the RICO Act, which his spokesperson mentioned specifically.

The RICO Act was signed into law by President Nixon in 1970 to “win the battle” against organized crime by making crime bosses responsible for their foot soldiers’ actions. Whether that goal has been achieved or whether the RICOA has been misused to manipulate defendants into pleading out rather than going to trial seems to be a matter of perspective. Either way, it does provide prosecutors with an opportunity to pursue masterminds and mafia bosses for acts they ordered but didn’t commit.

I hope that answers your question, Katie! Thanks for sending.

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This piece first appeared in Sunday Morning Hot Tea. Subscribe so you don’t miss another piece.