The term “racketeering” brings to mind violent images from gangster movies, but the reality of federal racketeering charges is often very different.
RICO
Racketeering generally refers to an organized effort to secure profits through illegal means. The name comes from “racket,” a term for an illegal scheme. The main federal law involved is known as the Racketeer Influenced and Corrupt Organizations Act, or RICO, which was passed in 1970.
The RICO statute specifically mentions bribery, obstructing justice, murder for hire, money laundering, illegal gambling and various financial crimes. Congress passed the law in an effort to strengthen prosecution against organized crime. Before the law was passed, prosecutors often had difficulty winning convictions against the people at the heads of various rackets because they couldn’t prove that they, personally, committed the crimes. Instead, their operatives faced the worst legal consequences while the people at the top often avoided prison. RICO provided a way to attach criminal liability to the people believed to be responsible for the criminal enterprises.
While RICO was originally meant to help crack down on violent organizations, in the decades since the act became law, prosecutors have expanded its reach. It is now used in many cases involving drug trafficking and computer hacking. And the defendants in these cases aren’t always what you might expect from movies about the mafia.
In some cases, large corporations have faced racketeering charges. Pharmaceutical corporations have sometimes been accused of using bribery to encourage doctors to prescribe their medications and using fraud as a way of increasing their profits. In other cases, mortgage companies have been accused of racketeering after they have used fraudulent practices to trap homebuyers in unfair loans.
Penalties
Racketeering charges can be confusing because these cases often involve allegations of multiple crimes, all with their own charges and potential penalties. For instance, an individual may be convicted of money laundering and fraud in a RICO case and end up with a prison sentence of 20 years of more because they were involved in an organization that ran a racket. They may also face significant fines and other penalties.
Defending against racketeering charges is not easy. These cases are complex and federal prosecutors are well-prepared to win convictions. Those who are accused of racketeering crimes must work hard to build the strongest defenses they can to protect their futures.