RICO: A Primer

• Published date: 31 January 2022
• Subject Matter: Litigation, Mediation & Arbitration, Criminal Law, Trials & Appeals & Compensation, White Collar Crime, Anti-Corruption & Fraud
• Law Firm: Freeman Law
• Author: Jason Freeman

The Racketeer Influenced and Corrupt Organizations Act ("RICO") was enacted in 1970. Although RICO provides for both civil remedies and criminal penalties, the number of civil RICO claims far outstrips the number of criminal RICO cases brought each year.

RICO provides for a civil action against persons engaged in a "pattern of racketeering activity" or "collection of an unlawful debt." A successful plaintiff may recover treble damages, costs, and attorneys' fees.

RICO is, however, an intricate, complex statutory regime with numerous potential pitfalls. Yet a civil RICO claim involves several standard, key issues. We address several of those fundamental issues below.

What is "Racketeering activity"?

The heart of a RICO case is the existence of a pattern of racketeering activity. Under the statute, "racketeering activity" includes a host of offenses. Section 1961(1) defines the phrase to include any crime listed in subdivisions A, B, C, D, E, F, or G of section 1961(1).

Among other things, "racketeering activities" include "any act which is indictable under" a list of federal criminal statutes. The list covers an expansive range of violations, for example, violations of the Hobbs Act, 18 U.S.C. ' 1951 (extortion); 18 U.S.C. ' 1341 (mail fraud) and 1343 (wire fraud); 18 U.S.C. ' 1831 (economic espionage); 18 U.S.C. ' 1832 (theft of trade secrets); 18 U.S.C. ' 1952 (Travel Act); 18 U.S.C. ' 1956, 1957 (money laundering); and 18 U.S.C. ' 2318-2320 (copyright infringement).

Mail and wire fraud are the most common predicate acts.

Notably, there must be some nexus to interstate or foreign commerce-it is a jurisdictional element of a civil RICO claim. Thus, predicate acts will often occur in several States.

Who is a RICO "Person"?

A RICO person "includes any individual or entity capable of holding a legal or beneficial interest in property." This definition defines those who can be charged under RICO. While the definition clearly includes a natural person, as well as a corporation, union, partnership and a sole proprietorship, it is not settled whether the definition encompasses a governmental entity.

What is a RICO Enterprise?

A plaintiff is required to demonstrate that the defendant conducted the affairs of an enterprise though a pattern of racketeering activity. The person and the enterprise generally must be distinct; but, of course, a Rico person can be a part of an enterprise.

A RICO enterprise includes "any individual, partnership, corporation, association...