Racketeer Influenced and Corrupt Organizations Act

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RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT

The Racketeer Influenced and Corrupt Organizations Act (RICO) was enacted by Congress in 1970 to provide federal prosecutors with a powerful tool against organized crime. RICO has been used against the ruling commission of the Mafia in New York City, against corrupt politicians running local government agencies, against Croatian terrorists, against political demonstrators, against the Sicilian Mafia for importing billions of dollars of heroin into the United States in the pizza connection case (the longest criminal trial in federal history), in the largest criminal tax-fraud prosecution in history, and against massive insider-trading securities fraud.

RICO is a complex statute that creates both criminal sanctions and civil remedies, enforceable by the government or by injured private parties. The heart of the statute defines four crimes. First, it is illegal to establish, operate, or acquire an interest in any enterprise affecting either interstate commerce or foreign commerce with income from a pattern of racketeering activity or collection of an unlawful debt. Second, the act prohibits acquiring or maintaining an interest in any such enterprise through a pattern of racketeering activity or collection of an unlawful debt. Third, it is a crime for any employee or associate of any such enterprise to participate in the enterprise through a pattern of racketeering activity or collection of an unlawful debt. And fourth, it is illegal to conspire to violate any of the first three provisions. A "pattern" of racketeering requires the commission of two or more "predicate offenses" within a ten-year period. These offenses include nine categories of state crimes and twenty-six federal crimes, including murder; drug trafficking; bribery; and mail, wire, and securities fraud. As discussed in United States v. Turkette (1981), an "enterprise" includes any individual, partnership, corporation, association, union, or group of individuals associated in fact, whether legitimate or illegitimate. Conviction under RICO carries severe criminal penalties and forfeiture of ill-gotten gains. A person may be liable for triple damages, costs, and attorneys' fees in a private civil RICO action. RICO is unique in its complexity among criminal statutes because of the sheer number of potential predicate offenses and because of the indefinite terms used in defining a violation.

In H.J. Inc. v. Northwestern Bell Telephone Co. (1989) the Supreme Court interpreted a "pattern of racketeering activity" to require both "continuity" and "relationship": two or more predicate offenses that are somehow related and that pose a threat of continued criminal activity must be committed within a ten-year period. Four of the more conservative Justices, although concurring in the judgment, suggested that the pattern requirement may be unconstitutionally void for vagueness in both criminal and civil cases. Because it is not clear what RICO requires beyond two predicate offenses, a potential defendant may not know whether his or her conduct is covered by RICO. Lower courts, however, have uniformly held that the pattern requirement is not unconstitutionally vague because the underlying predicate offenses are clearly defined crimes. People of common intelligence, therefore, do not have to guess at what is forbidden, and the discretion of police, prosecutors, juries, and courts in enforcing RICO is constrained. Gerard Lynch has argued that unexpectedly draconian penalties nevertheless may be imposed based on a prosecutor's unrestricted discretion to transform ordinary offenses into a RICO prosecution. This may implicate the principle of legality (penal legislation must describe with precision the conduct it prohibits and the potential punishment) and the related constitutional prohibitions against vagueness and ex post facto laws.

Among the most powerful applications of RICO has been its use to seek pretrial restraint and forfeiture of illegal proceeds, including assets that a defendant would otherwise use to hire a defense attorney at the very criminal trial where guilt and thus forfeitability will be determined. In Caplin Drysdale, Chartered v. United States (1989) and United States v. Monsanto (1989) (construing parallel forfeiture provisions under the continuing criminal-enterprise statute), the Court held, 5–4, that such restraint and forfeiture do not violate the Sixth Amendment right to counsel or the Fifth Amendment due process right to a fair trial. A defendant who is thus left indigent, the majority said, can obtain appointed counsel. The Court left open whether due process requires a fair hearing before a pretrial restraint may be imposed. The Court also construed the forfeiture provisions broadly in Russello v. United States (1983) to serve the congressional purpose of creating a potent weapon to attack the economic roots of organized crime. Lower courts have held that forfeiture may be cruel and unusual, in violation of the Eighth Amendment, if the interest forfeited is grossly disproportionate to the offense committed.

Although the Supreme Court has not yet addressed most constitutional attacks on RICO, in Sedima, S.P.R.L. v. Imrex Co. (1985), the Court rejected the circuit court's suggestion that a private civil RICO action in the absence of a prior criminal conviction impermissibly imposes punishment while avoiding the protections of constitutional criminal procedure.

Lower courts have held that various applications of RICO do not violate the double jeopardy clause. Dual prosecutions—by the state for the predicate offenses and by the federal government for racketeering based on those offenses—are permitted because different sovereigns and separate offenses are involved. Double jeopardy does not bar federal prosecutions for both the underlying federal predicate offenses and RICO offenses based on those predicates, prosecutions for both a RICO conspiracy and substantive RICO offenses, separate sentences for predicate and RICO offenses, or separate sentences for RICO conspiracy and RICO substantive offenses. In Grady v. Corbin (1990) the Court held that double jeopardy bars a subsequent prosecution if, to establish an essential element of an offense, the government will prove conduct that constitutes an offense for which the defendant has already been prosecuted. The impact of Grady remains to be seen.

Even though a predicate act committed before the statute went into effect may be used to establish a pattern of racketeering, RICO requires that at least one act be committed after its effective date. A person who has committed a prior act is therefore on notice that a subsequent act will subject him or her to liability. Thus, RICO is not unconstitutional as an ex post facto law or bill of attainder.

Private civil plaintiffs have expanded civil RICO in dramatic ways against traditional businesses with no ties to organized crime. RICO civil suits have also been employed by both private and government entities in efforts to suppress unpopular political groups, including antinuclear demonstrators in Georgia, an antipornography group in Florida, and anti-abortion protestors across the country. In West Hartford, Connecticut, the city government even sued a local newspaper for covering anti-abortion protests. Such suits raise significant free-speech problems. Many of these expansive uses of RICO were not anticipated by Congress, but nevertheless fall within the plain language of the statute. Claims of abuse have produced repeated efforts with little success to reform RICO through judicial interpretations, legislation, or Justice Department guidelines. It is unlikely that the Courts will reform RICO by applying the bill of rights. The concurring opinion in H. J. Inc. notwithstanding, the Supreme Court has not been inclined to find new constitutional protections for the accused. However, at least some federal courts may be unwilling to hear certain kinds of RICO suits. In Town of West Hartford v. Operation Rescue (2nd circuit, 1990), the federal appeals court dismissed a civil RICO suit against anti-abortion protestors engaged in civil disobedience. The court labeled the suit's RICO allegations "blatantly implausible" and indicated that the court had no willingness "to countenance fanciful invocations of the draconian RICO weapon in civil litigation."

Robert Diderot Garcia
(1992)