RICO

The Crime

18 U.S.C. § 1962 (2005).

Under this section, there are three different crimes that can be committed, plus an additional conspiracy provision.

Under section 1962(a), it is a crime for any person who has received any income derived from a pattern of racketeering activity or through collection of an unlawful debt in which such person has participated as a principal, to

  • use or invest, directly or indirectly, any part of such income, or the proceeds of such income,
    • in acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce. 18 U.S.C. § 1961(a).

Under section 1962(b), it is a crime for a person, through a pattern of racketeering activity or through collection of an unlawful debt,

  • to acquire or maintain, directly or indirectly, any interest in or control of any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce. Id. § 1962(b)

Under section 1962(c), it is a crime for a person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to

  • conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt. Id. § 1962(c)

Under section 1962(d), it is a crime for any person to conspire to violate any of the provisions of section 1962. Id. § 1962(d).

Exception

Section 1962(a) generally does not apply to a purchase of securities on the open market for purposes of investment, and without the intention of controlling or participating in the control of the issuer, if the securities of the issuer held do not amount in the aggregate to one percent of the outstanding securities of any one class, and do not confer, either in law or in fact, the power to elect one or more directors of the issuer.) 18 U.S.C. § 1962(a).

The Punishment

18 U.S.C. § 1963 (2005).

A violation of section 1962 can be punished by

  • a fine,
  • imprisonment for not more than 20 years, or
  • both. 18 U.S.C. § 1963(a).

If the violation is based on a racketeering activity for which the maximum penalty includes life imprisonment, then the violation can be punished by

  • a fine,
  • imprisonment for up to life, or both. Id.

    Furthermore, the violation will result in the forfeiture to the United States of

    • any interest the person has acquired or maintained in violation of section 1962. 18 U.S.C. § 1963(a)(1).
    • any-
      • interest in any enterprise which the person has established, operated, controlled, conducted, or participated in the conduct of, in violation of section 1962; id. § 1963(a)(2)(A);
      • security of any enterprise which the person has established, operated, controlled, conducted, or participated in the conduct of, in violation of section 1962; id. § 1963(a)(2)(B);
      • claim against any enterprise which the person has established, operated, controlled, conducted, or participated in the conduct of, in violation of section 1962; id. § 1963(a)(2)(C); or
      • property or contractual right of any kind affording a source of influence over any enterprise which the person has established, operated, controlled, conducted, or participated in the conduct of, in violation of section 1962; id. § 1963(a)(2)(D); and

    • any property constituting, or derived from, any proceeds which the person obtained, directly or indirectly, from racketeering activity or unlawful debt collection in violation of section 1962. 18 U.S.C. § 1963(a)(3)

    Furthermore, in lieu of a fine otherwise authorized by this section, a defendant who derives profits or other proceeds from an offense may be fined not more than twice the gross profits or other proceeds. 18 U.S.C. § 1963(a).

    The remaining provisions of section 1963 concern forfeiture procedures.

  • Definitions

    18 U.S.C. § 1961 (2005).

    Section 1961 contains a long list of definitions of what constitutes racketeering. As used in the RICO statutes,

    • "racketeering activity" means
      • any act or threat involving
        • murder,
        • kidnapping,
        • gambling,
        • arson,
        • robbery,
        • bribery,
        • extortion,
        • dealing in obscene matter, or
        • dealing in a controlled substance or listed chemical,
        • which is chargeable under State law and punishable by imprisonment for more than one year; 18 U.S.C. § 1961(1)(A).
      • any act which is indictable under any of the following provisions of title 18, United States Code:
        • Section 201 (relating to bribery),
        • section 224 (relating to sports bribery),
        • sections 471, 472, and 473 (relating to counterfeiting),
        • section 659 (relating to theft from interstate shipment) if the act indictable under section 659 is felonious,
        • section 664 (relating to embezzlement from pension and welfare funds),
        • sections 891-894 (relating to extortionate credit transactions),
        • section 1028 (relating to fraud and related activity in connection with identification documents),
        • section 1029 (relating to fraud and related activity in connection with access devices),
        • section 1084 (relating to the transmission of gambling information),
        • section 1341 (relating to mail fraud),
        • section 1343 (relating to wire fraud),
        • section 1344 (relating to financial institution fraud),
        • section 1425 (relating to the procurement of citizenship or nationalization unlawfully),
        • section 1426 (relating to the reproduction of naturalization or citizenship papers),
        • section 1427 (relating to the sale of naturalization or citizenship papers),
        • sections 1461-1465 (relating to obscene matter),
        • section 1503 (relating to obstruction of justice),
        • section 1510 (relating to obstruction of criminal investigations),
        • section 1511 (relating to the obstruction of State or local law enforcement),
        • section 1512 (relating to tampering with a witness, victim, or an informant),
        • section 1513 (relating to retaliating against a witness, victim, or an informant),
        • section 1542 (relating to false statement in application and use of passport),
        • section 1543 (relating to forgery or false use of passport),
        • section 1544 (relating to misuse of passport),
        • section 1546 (relating to fraud and misuse of visas, permits, and other documents),
        • sections 1581-1591 (relating to peonage, slavery, and trafficking in persons),
        • section 1951 (relating to interference with commerce, robbery, or extortion),
        • section 1952 (relating to racketeering),
        • section 1953 (relating to interstate transportation of wagering paraphernalia),
        • section 1954 (relating to unlawful welfare fund payments),
        • section 1955 (relating to the prohibition of illegal gambling businesses),
        • section 1956 (relating to the laundering of monetary instruments),
        • section 1957 (relating to engaging in monetary transactions in property derived from specified unlawful activity),
        • section 1958 (relating to use of interstate commerce facilities in the commission of murder-for-hire),
        • sections 2251, 2251A, 2252, and 2260 (relating to sexual exploitation of children),
        • sections 2312 and 2313 (relating to interstate transportation of stolen motor vehicles),
        • sections 2314 and 2315 (relating to interstate transportation of stolen property),
        • section 2318 (relating to trafficking in counterfeit labels for phonorecords, computer programs or computer program documentation or packaging and copies of motion pictures or other audiovisual works),
        • section 2319 (relating to criminal infringement of a copyright),
        • section 2319A (relating to unauthorized fixation of and trafficking in sound recordings and music videos of live musical performances),
        • section 2320 (relating to trafficking in goods or services bearing counterfeit marks),
        • section 2321 (relating to trafficking in certain motor vehicles or motor vehicle parts),
        • sections 2341-2346 (relating to trafficking in contraband cigarettes),
        • sections 2421-2424 (relating to white slave traffic),
        • sections 175-178 (relating to biological weapons),
        • sections 229-229F (relating to chemical weapons),
        • section 831 (relating to nuclear materials). Id. § 1961(1)(B).
      • an act which is indictable under title 29 U.S.C. § 186 (dealing with restrictions on payments and loans to labor organizations) or 18 U.S.C. § 501(c) (relating to embezzlement from union funds). Id. § 1961(1)(C).
      • any offense involving fraud connected with

        • a case under title 11 (except a case under 18 U.S.C. § 157),
        • fraud in the sale of securities, or
        • the felonious manufacture, importation, receiving, concealment, buying, selling, or otherwise dealing in a controlled substance or listed chemical, punishable under any law of the United States. Id. § 1961(1)(D).
      • any act which is indictable under the Currency and Foreign Transactions Reporting Act. Id. § 1961(1)(E)
      • any act which is indictable under the Immigration and Nationality Act,

        • 8 U.S.C. § 1324 (relating to bringing in and harboring certain aliens),
        • 8 U.S.C. § 1327 (relating to aiding or assisting certain aliens to enter the United States),
        • 8 U.S.C. § 1328 (relating to importation of alien for immoral purpose)
      • if the act indictable under such section of such Act was committed for the purpose of financial gain. Id. § 1961(1)(F).
      • any act that is indictable under any provision listed in 18 U.S.C. § 2332b(g)(5)(B). Id. § 1961(1)(G)
    • "enterprise" includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity. 18 U.S.C. § 1961(4).
    • "pattern of racketeering activity" requires at least two acts of racketeering activity, one of which occurred after the effective date of this chapter and the last of which occurred within ten years (excluding any period of imprisonment) after the commission of a prior act of racketeering activity. 18 U.S.C. § 1961(5).
    • "unlawful debt" means a debt
    • incurred or contracted in gambling activity which was in violation of the law of the United States, a State or political subdivision thereof, or which is unenforceable under State or Federal law in whole or in part as to principal or interest because of the laws relating to usury, 18 U.S.C. § 1961(6)(A) and
    • which was incurred in connection with the business of gambling in violation of the law of the United States, a State or political subdivision thereof, or the business of lending money or a thing of value at a rate usurious under State or Federal law, where the usurious rate is at least twice the enforceable rate. Id. § 1961(6)(B).
    • "racketeering investigator" means any attorney or investigator so designated by the Attorney General and charged with the duty of enforcing or carrying into effect this chapter. 18 U.S.C. § 1961(7).
    • "racketeering investigation" means any inquiry conducted by any racketeering investigator for the purpose of ascertaining whether any person has been involved in any violation of this chapter or of any final order, judgment, or decree of any court of the United States, duly entered in any case or proceeding arising under this chapter [18 USCS §§ 1961 et seq.]. 18 U.S.C. § 1961(8).