Racketeer Influenced and Corrupt Organizations Act (RICO)

RICO Act: Power and Challenges

Conviction Requirements under RICO:

Securing a conviction under the Racketeer Influenced and Corrupt Organizations Act (RICO) requires proving specific elements:

• Enterprise: The existence of an ongoing organization, formal or informal, with a purpose of criminal activity [1].
• Pattern of Racketeering Activity: Demonstrating a pattern of at least two predicate acts of racketeering activity within a ten-year period. Predicate acts can include various crimes like fraud, bribery, drug trafficking, and money laundering [1].
• Connection: Showing a connection between the racketeering activity and the enterprise [1].
• Investment or Collection of Income: Proving the defendant invested in, directed, or participated in the enterprise through the collected income from the pattern of racketeering activity [1].

Racketeering Defined:

Racketeering refers to activities associated with organized crime, including:

• Acts punishable under state and federal extortion laws
• Fraudulent schemes
• Mail and wire fraud
• Securities fraud
• Drug trafficking
• Money laundering [2]

RICO Act Case Example: United States v. Sun-Diamond Growers of California (1994)

This case involved Sun-Diamond Growers of California, a cooperative marketing agricultural company. The government alleged Sun-Diamond conspired with competitors to fix walnut prices through a series of meetings and communication. The meetings constituted a criminal enterprise, and the price-fixing agreements were considered predicate acts of racketeering activity under RICO [3].

Outcome and Penalties:

Sun-Diamond pleaded guilty to violating RICO and was ordered to pay a $1 million criminal fine. Additionally, the company faced civil penalties in the form of a $25 million treble damage award to walnut growers harmed by the price-fixing scheme [3].

RICO Act and Government Power:

The RICO Act's power to prosecute and the use of civil forfeiture actions raise concerns:

Arguments for Powerful Tool:

• Combating Organized Crime: RICO effectively targets complex criminal organizations and disrupts their financial operations.
• Deterrence: The threat of RICO charges and asset forfeiture deters businesses from engaging in criminal activity.
• Civil Forfeiture: Civil forfeiture allows seizing assets obtained through illegal activity, even if a criminal conviction isn't secured, potentially weakening criminal organizations.

Arguments Against Excessive Power:

• Broad Scope: The RICO Act's broad scope can ensnare legitimate businesses in complex litigation for seemingly unrelated predicate acts.
• Civil Forfeiture: Civil forfeiture lowers the burden of proof compared to criminal proceedings, raising concerns about due process and taking property without fair compensation.
• Burdensome Litigation: The threat of RICO charges can lead to expensive and lengthy litigation, even if charges are eventually dropped.

Conclusion:

The RICO Act is a powerful tool for combating organized crime but comes with concerns about its broad reach and potential for misuse. Striking a balance between effective prosecution and protecting legitimate businesses remains a challenge.

Sources:

[1] Cornell University Law School. (n.d.) Racketeer Influenced and Corrupt Organizations Act (RICO). Wex Legal Dictionary.

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