Civil RICO

The Racketeer Influenced and Corrupt Organizations Act (RICO) is a federal law that was enacted in 1970 as part of the Organized Crime Control Act of 1970 and intended to combat organized crime in the United States. At the time of its enactment, Congress described RICO as “an act designed to prevent ‘known mobsters’ from infiltrating legitimate businesses.” Today, however, RICO prohibits a much broader scope of conduct than that of known mobsters.

Find more information about RICO here.

To establish a RICO violation, there are 4 basic elements that must be proven: (1) a pattern of racketeering activity; (2) a culpable person with the requisite mens rea; (3) an enterprise; and (4) an effect on interstate commerce. Additional elements may be required depending upon the nature of the claim for civil liability.

• Pattern of racketeering activity
  • A pattern of racketeering activity can be established 2 ways:
    • (1) Closed-ended continuity: To demonstrate a pattern of racketeering activity, a plaintiff must prove that this series of related predicates extended over a substantial period of time
    • (2) Open-ended continuity: To demonstrate a pattern of racketeering activity, a plaintiff must prove that past conduct, by its nature, projects into the future with a threat of repetition

• Culpable person with the requisite mens rea
  • To prevail on a civil RICO claim, the plaintiff must identify a culpable person who actually committed the RICO violation, or conspired to commit a RICO violation
    • Under the RICO statute, however, a person may be found to be a culpable person if they are an individual or entity capable of holding a legal or beneficial interest in property
    • Additionally, the culpable person must be separate from the enterprise
  • As for the requisite mens rea, the plaintiff must establish that each defendant intended to engage in the conduct with actual knowledge of the illegal activities

• Enterprise
  • Under RICO, any legal entity, group of associated individuals, or individual may be deemed an “enterprise.”

RICO prohibits 4 types of activities:

• (1) A person from investing in an enterprise any income derived from a pattern of racketeering activity;
• (2) A person from using a pattern of racketeering activity to acquire or maintain control over an enterprise;
• (3) A person from conducting the affairs of an enterprise through a pattern of racketeering; and
• (4) A person from conspiring to violate any of the above three types of activities.

“Racketeering activity” is the common element in the types of activities prohibited by RICO. Congress defined “racketeering activity” to include numerous state and federal predicate crimes. Important to understand is that RICO is not violated by a single event – there must be a pattern of activity, meaning long-term organized conduct.

RICO provides for penalties ranging from monetary fines to lengthy prison sentences to forfeiture of assets.

The plaintiff bears the burden of proof. In a civil RICO claim, the burden of proof is lower – it is satisfied by a preponderance of the evidence. For a claimant to prevail on a civil RICO claim, the jury must find that it is more likely than not that the racketeering activities did occur.

Plaintiffs that successfully bring civil RICO claims may recover treble damages. Treble damages are a multiple of actual damages and are intended to provide a remedy for economic injury suffered as a result of the prohibited conduct.

Common defenses to civil RICO claims include the defendant arguing that the plaintiff failed to satisfy one or more of the required elements; preemption; or that the statute of limitations has run.

RICO is a complex statute and understanding your rights at the outset of any legal proceedings is paramount. The federal government has unlimited resources and unlimited manpower, making it a daunting opponent. Schedule a consultation with an experienced attorney today.