RICO (18 U.S.C. §§ 1961–1968)
Citation
18 U.S.C. §§ 1961–1968 — Organized Crime Control Act of 1970. Enacted to combat organized crime by targeting the infiltration of legitimate enterprises and patterns of criminal activity.
§ 1962 Prohibitions (Four Subsections)
| Subsection | Prohibition |
|---|---|
| § 1962(a) | Using income derived from racketeering to acquire an interest in, establish, or operate an enterprise |
| § 1962(b) | Acquiring or maintaining an interest in or control of an enterprise through racketeering |
| § 1962(c) | Conducting or participating in the affairs of an enterprise through a pattern of racketeering — most commonly charged |
| § 1962(d) | Conspiracy to violate any of §§ 1962(a)–(c) |
Elements of § 1962(c)
- A person
- Employed by or associated with
- An enterprise
- Affecting interstate or foreign commerce
- Conducting or participating in the conduct of the enterprise’s affairs
- Through a pattern of racketeering activity
”Enterprise” (§ 1961(4))
Any individual, partnership, corporation, association, or other legal entity, and any group of individuals associated in fact although not a legal entity.
- Boyle v. United States (2009): an association-in-fact enterprise need not have a hierarchical structure, fixed roles, or longevity. A loosely organized group with a common purpose qualifies. Three features are required: a purpose, relationships among those associated with the enterprise, and sufficient longevity to pursue the purpose.
- The enterprise must be distinct from the pattern of racketeering itself (though the same persons may be involved).
”Pattern of Racketeering Activity” (§ 1961(5))
At least two predicate acts (§ 1961(1)) within 10 years of each other. The acts must satisfy two requirements:
- Relatedness: acts must have the same or similar purposes, results, participants, victims, or methods, or otherwise be interrelated (not isolated events).
- Continuity: either closed-ended (a substantial period of time — courts look to number of acts, victims, and duration) or open-ended (past conduct that by its nature projects into the future, posing a threat of continued criminal activity).
H.J. Inc. v. Northwestern Bell Telephone Co. (1989): established the relatedness-plus-continuity test; rejected a single-scheme rule; requires flexible, fact-specific analysis.
Predicate Acts (§ 1961(1))
Includes a wide range of federal and state offenses:
- Federal: mail and wire fraud (§§ 1341, 1343), bribery (§ 201), financial institution fraud, drug trafficking offenses, murder-for-hire, money laundering
- State felonies: involving violence (murder, kidnapping, robbery, extortion) or certain enumerated offenses
”Conducts or Participates” (§ 1962(c))
Reves v. Ernst & Young (1993): adopts the operation or management test — a defendant must participate in the operation or management of the enterprise itself. Merely providing professional services (e.g., accounting, legal) to an enterprise, without directing or guiding its affairs, is insufficient. Liability requires some part in directing the enterprise’s activities.
Civil RICO (§ 1964(c))
- Private right of action for any person injured in business or property by reason of a RICO violation.
- Damages are trebled; attorney’s fees awarded to prevailing plaintiff.
- Standing: plaintiff must show injury to business or property (not personal injury) caused by the RICO violation.
- Widely used in commercial litigation; extends far beyond organized crime.
RICO Conspiracy (§ 1962(d))
Agreement to commit a substantive RICO offense.
- Salinas v. United States (1997): a conspirator need not agree to personally commit two predicate acts; agreeing to participate in a scheme where others will commit predicate acts suffices.
- Broad co-conspirator liability; similar in reach to Pinkerton doctrine.
Penalties
- Up to 20 years imprisonment per RICO count (or life if the racketeering activity is punishable by life imprisonment).
- Mandatory forfeiture of proceeds and interests acquired through RICO.
- Civil remedies (§ 1964(a)): divestiture orders, injunctions, dissolution of enterprises.
Key Cases
| Case | Holding |
|---|---|
| H.J. Inc. v. Northwestern Bell (1989) | Pattern requires relatedness + continuity; fact-specific inquiry |
| Boyle v. United States (2009) | Association-in-fact enterprise requires only common purpose, relationships, longevity |
| Reves v. Ernst & Young (1993) | § 1962(c) requires participation in operation or management of enterprise |
| Salinas v. United States (1997) | RICO conspirator need not personally agree to commit two predicate acts |