Table of Contents Hide
- What Is Racketeering?
- Types of Crimes Classified as Racketeering?
- What Constitutes a Violation of RICO Laws?
- Understanding Racketeering
- The Origins of Racketeering in the United States
- A Well-Known Racketeering Case
- Racketeer Influenced and Corrupt Organizations Act (RICO)
- RICO in Civil Law
- Criminal RICO
- Racketeering Offenses: Federal vs. State
- Racketeering Examples
- School Racketeering
- Financial Consequences of Racketeering
- What is the Length of a Racketeering Sentence?
- How are Racketeering Cases Investigated?
- What are the Charges to Racketeering?
- IMPORTANT TAKEAWAYS
- Racketeering FAQ’s
- Is racketeering a felony?
- Why is it called racketeering?
- What does RICO stand for?
- What is the minimum sentence for racketeering?
- What are the 35 crimes a person can be charged with under the RICO Act?
R. Kelly was found guilty by a Brooklyn jury on September 27 on charges brought up by federal prosecutors in New York in 2019. After a six-week trial in which eleven victims testified about the abuse, sexual exploitation, and humiliation they faced under R. Kelly’s supervision, many are eager to put the ordeal behind them.
One of the accusers, Sonja, told those in attendance at the hearing that she was “ready to start living my life free of fear and to start the healing process.”
Child sexual exploitation, manufacture of child pornography, kidnapping, forced labor, and obstruction of justice were among the charges. More charges of racketeering implicate Kelly’s “close circle,” many of whom assisted in the coercion, sexual assault, and manufacture of child pornography over a two-decade period.
R. Kelly was found guilty of racketeering by a jury in a sex trafficking case involving a plot to recruit and sexually abuse women, girls, and boys. Under racketeering charges, he faces up to 20 years in jail.
What Is Racketeering?
Racketeering is a criminal offense in which a person or organization participates in a “racket.” A racket occurs when a criminal creates a problem for others to solve that problem through extortion. A racketeer is a person or group that participates in the racket.
Racketeering has long been associated with organized crime, dating back to the early 1920s.
Types of Crimes Classified as Racketeering?
Racketeering offenses are classified as “predicate offenses,” which relate to a crime committed as part of a bigger crime.
- Controlled substance distribution
- Mail swindle
- Laundering of funds
- Wire tampering
- Tampering with evidence
What Constitutes a Violation of RICO Laws?
The government must establish several elements beyond a reasonable doubt to prosecute a defendant suspected of breaching RICO laws.
- That a criminal organization existed
- That the group’s actions have an impact on interstate commerce
- That the defendant was a member of or worked for the organization
- The accused engaged in a pattern of racketeering behavior
- That the defendant participated in the enterprise’s operations during at least two actions throughout the sequence of racketeering activity.
Rackets are illicit companies run by organized groups. An organized gang may potentially drain funds from a lawful enterprise for criminal purposes. Rackets primarily operated in clearly illegal industries such as prostitution, human trafficking, drug trafficking, illegal weapons trade, and counterfeiting.
Racketeering can take many different forms, including:
#1. Cyber extortion
This occurs when a hacker installs malware on someone’s computer, effectively restricting all computer and data access. The hacker then asks for payment to re-establish the user’s access.
#2. Protection rackets
This occurs when a criminal entity threatens to harm a business or individual unless a protection charge is paid.
This is called racketeering when an individual is illegally imprisoned and their kidnappers agree to release the kidnapped individual in exchange for a ransom.
- Individuals act as brokers to buy stolen goods from thieves at low prices in a fencing operation. They resale them to unsuspecting purchasers for a profit.
- Labor unions have also been frequently accused of racketeering. To extort money from a corporation or contractor, organized crime gangs typically employ one or more labor unions (s). In other circumstances, groups use unions to exert control over employees. La Cosa Nostra, the Italian-American mafia criminal society, was well-known for its grip over labor unions. La Cosa Nostra established such a stronghold that both firm management and the labor union were forced to rely on the gangsters for safety.
In October 1970, the United States introduced the Racketeer Influenced and Corrupt Organizations (RICO) Act to combat illegal collusion and profiteering through racketeering. The statute allows law enforcement to charge individuals or groups implicated in different racketeering acts. Individuals found guilty of RICO offenses may be prosecuted, and if found guilty, they may face a 20-year jail sentence or longer for significant crimes. Fines and other penalties may also be imposed.
Corporations can also commit racketeering. For example, a medication firm may bribe doctors to overprescribe a medicine, committing fraud in the process. Predatory lending may also be considered racketeering. This occurs when a lender dupes a borrower into taking out a loan that intentionally ignores or actively hampers their capacity to repay it.
Even if you have low credit, an official personal loan is always safer than anything a loan shark may give you.
State Farm, for example, has been accused of unlawfully supporting Judge Lloyd Karmeier’s 2004 election campaign by diverting funds through advocacy groups that did not declare sources. The issue is related to a long-running lawsuit filed by State Farm customers who claimed for more than a decade that they were supplied generic, subpar car parts instead of genuine equipment. 5
The plaintiffs sought $1 billion in damages, plus $1.8 billion in interest, on top of damages that might have been treble under the federal RICO Act. The total amount demanded was close to $8.5 billion. State Farm agreed to pay $250 million to settle the racketeering case in September 2018, just before opening remarks were to begin.
The Origins of Racketeering in the United States
Lucky Luciano, who immigrated from Sicily to the United States in 1906, is commonly regarded as the “Father of Modern Organized Crime” and a well-known Mafia member. The Mafia began in Sicily as an organization loosely constituted of families tasked with protecting the island against foreign invaders.
While there had been criminal organizations in the United States before Lucky Luciano, Luciano united youthful gangsters in New York City to acquire power following brutal battles with elder mob bosses. They were involved in a variety of rackets, the most lucrative of which was prostitution and bootlegging. The criminals were organized by Luciano into five crime families, which became known as syndicates.
Luciano was apprehended in 1936 after several of the prostitutes testified to authorities who were investigating him. During WWII, Luciano helped the federal authorities from his prison cell. Even while imprisoned, he was in charge of the longshoremen’s union. He was then liberated and sent to Italy, where he died.
Activities in the Beginning
Prostitution and the numbers racket, an illegal lottery that was popular before state and national lotteries were legalized, are two of the first examples of racketeering.
Protection was another popular early racket. The protection racket involved members of the racket committing crimes, such as robbing a small business. Then, in exchange for significant sums of money, they would promise the tiny business “protection” from similar crimes.
Drug trafficking, firearm smuggling, kidnapping, and forgery were other early examples of racketeering.
A Well-Known Racketeering Case
Michael Milken was a well-known racketeering case involving the securities sector in 1989. The Milken case is an example of a racketeering case in which the Mafia or a crime boss are not involved.
Milken worked as a bond researcher for the Drexel investment bank. He was influential in the development of the junk bond market. Milken rose to prominence on Wall Street and was accused of occasionally skirting Securities and Exchange Commission (SEC) restrictions. As a result, he was investigated by the SEC.
After being implicated in a securities inquiry by another defendant, Milken was subsequently indicted on 98 charges of racketeering and fraud, including allegations of insider trading, securities fraud, and stock manipulation. He was fined and imprisoned as part of a plea bargain, but he is now free.
Racketeer Influenced and Corrupt Organizations Act (RICO)
The Department of Justice (DOJ) offers a broad perspective on RICO charges. According to the Department of Justice, to be found guilty of breaching the RICO statute, the government must demonstrate beyond a reasonable doubt that:
- An enterprise existed.
- The enterprise had an impact on cross-state commerce.
- The individual was involved with or employed by a criminal organization.
- The defendant was involved in racketeering.
- The individual participated in racketeering by committing at least two acts of racketeering activity.
When the Act was passed, it was largely used by government prosecutors to combat organized crime and criminal groups. Before the statute, prosecutors were compelled to trial mob-related racketeering offenses individually, even if a significant number of people were engaged in the commission of a crime.
RICO permits law enforcement to bring a case against a complete racket. The law authorizes prosecutors to seize an implicated party’s assets, blocking the transfer of monies and property via shell corporations.
The statute gives prosecutors the ability to charge organizations or people for up to 20 years of continued criminal behavior for each count of racketeering, giving law enforcement agencies new tools to combat racketeering. Prosecutors can also charge organization leaders for crimes that they directed others to commit, according to the legislation.
RICO in Civil Law
Although RICO promises very high jail sentences for racketeers, the law’s true force lies in its civil component. Anyone who has been harmed by a RICO violation can file a civil suit and collect treble damages if they win. Civil lawyers attempted to fit many various claims within RICO in the 1980s, but in the 1990s, federal courts erected a variety of hurdles for civil RICO cases. To prevail on a RICO claim, a plaintiff must demonstrate Criminal Activity. You must demonstrate that the defendant committed one of the listed RICO crimes, which include mail and wire fraud. However, if you file a claim based on fraud, the court will conduct a thorough investigation.
Criminal Activity Pattern One crime is insufficient. You must demonstrate a pattern of at least two offenses. A pattern demands that the crimes be related in some way—same victim, same tactics, same participants—or that they are continuous, implying that they occurred over at least a year.
Within the time limit prescribed by the Statute of Limitations. The Supreme Court ruled that RICO has a four-year statute of limitations that begins to run when the victim learns of his or her damages.
RICO is both powerful and complicated. If you believe you have been badly hurt as a result of illegal action covered by RICO, check with a lawyer to see if you have a case. However, make certain that the work is worthwhile. RICO civil suits can be quite expensive.
A person must participate in a pattern of racketeering activities tied to an enterprise to violate RICO. Racketeering is defined by the law as 35 offenses, including gambling, murder, abduction, arson, drug selling, and bribery. Mail and wire fraud are prominently covered on the list. These are referred to as “predicate” offenses. To be charged under RICO, at least two predicate crimes must have been committed by the enterprise during the previous ten years.
It should be noted that an enterprise is necessary. It could be a criminal family, a street gang, or a drug cartel. However, it could also be a corporation, a political party, or a managed care organization. The enterprise just needs to be a distinct entity; yet, an enterprise is not the same as an individual. As a result, while a corporation might be the enterprise through which individuals commit crimes, it cannot be both an individual and the enterprise.
The criminal RICO legislation calls for a 20-year prison sentence as well as substantial financial penalties. The law also permits prosecutors to seize assets, preventing them from fleeing the country before a trial.
Racketeering Offenses: Federal vs. State
Prosecutors can charge someone under RICO if they commit at least two acts of racketeering activity, one of which occurred after RICO was passed and the other within ten years after the prior act.
Federal offenses are prosecuted at both the federal and state levels. National agencies such as the Federal Bureau of Investigation (FBI), Drug Enforcement Agency (DEA), Border Patrol, Department of Homeland Security, Internal Revenue Service (IRS), Bureau of Alcohol, Tobacco, and Firearms (ATF), and the Secret Service are involved in federal criminal investigations. International law enforcement may also be involved in some circumstances.
State crimes are crimes that violate the laws of a specific state and are investigated by local, state, or county police. Kidnapping, robbery, and assault are all considered state crimes if they occur within the borders of a specific state.
Federal sentences are typically longer and harsher than those given for state offenses.
In December 2020, the Department of Justice announced an indictment against 40 defendants in the largest federal racketeering case in South Carolina. According to a news statement, charges have been brought against gang members who participated in a criminal operation. Inmates in the South Carolina Department of Corrections utilized contraband cell phones to arrange murders, kidnappings, firearm distribution, and a global narcotics ring.
Counties in Kansas and Missouri filed federal racketeering cases against more than a dozen opioid drug manufacturers in June 2018. They were accused of deceitful marketing and the distribution of medications under pretenses. The prosecution claimed that the firms lied about the hazards of addiction to increase their revenues.
FIFA officials and corporate executives were charged in 2015 on racketeering conspiracy and corruption charges involving bribery and kickbacks paid to win profitable television and marketing rights to international soccer events.
Kevin Eleby, a Los Angeles gang leader, was sentenced to 25 years in federal prison in a RICO case in November 2013. The gang utilized violence and intimidation to gain control of a South Los Angeles housing project. The enterprise participated in drug dealing, guns trafficking, murder, witness intimidation, and armed robbery to dominate and terrify the housing developments, according to the RICO trial.
In July 2017, two former Baltimore police officers pleaded guilty to federal racketeering charges. They were accused, along with numerous other members of Baltimore’s Gun Trace Task Force, of plotting to steal money, property, and narcotics by detaining people, invading homes, conducting traffic stops, and signing out fake search warrants affidavits.
Another notable racketeering case occurred in Atlanta public schools in 2009 and was tried in court in 2015. The No Child Left Behind Act, signed into law during the George W. Bush administration, held schools accountable for student learning.
In 2009, a group of Atlanta education officials changed student answers on standardized tests used to measure what students had learned over the school year. The group of school officials worked in a generally low-performing school district, and student test results increased significantly in 2009.
Following a lengthy investigation, numerous people were indicted and convicted on charges of racketeering, which carries a lengthy jail sentence.
Extortion via the internet
Examples of racketeering in the modern era are even more intriguing. When a racketeer demands money in exchange for seizing or damaging electronic material, such as computer data, this is referred to as cyber extortion. Here’s an illustration: Assume a hacker gains access to your computer—possibly by learning your password—and then uses that access to either damage your data or use your data in a way that is harmful to you unless you pay them a big quantity of money.
Credit card fraud is another kind of cyber extortion. Criminals install credit and debit card skimmers on petrol pumps to steal data from them. Customers at gas stations are frequently unaware of the presence of skimmers. Human trafficking, bribery, wire fraud, identity theft, illegal gambling, money laundering, and other forms of modern-day racketeering are also examples.
Financial Consequences of Racketeering
Racketeering has a severe societal cost. The United Nations Office on Drugs and Crime estimated in 2009 that all types of organized crime generate 1.5 percent of global GDP or around $870 billion per year. That equates to roughly 7% of global merchandise exports.
What is the Length of a Racketeering Sentence?
The RICO Act imposes a maximum prison sentence of twenty years for each racketeering count on which the defendant was found guilty. A $25,000 fine can also be levied in addition to the conviction.
Based on the guilty decision in the R. Kelly case this week, he could be imprisoned for the rest of his life. The public, on the other hand, will have to wait until May 2022, when the punishment hearing is planned.
Kelly has been charged in what other jurisdictions?
Trials in Chicago and Minnesota could take place before the New York charges are sentenced in May. Kelly was indicted on criminal sexual abuse charges in February 2019, involving four victims, three of whom were minors. Kelly was charged with prostitution with a juvenile in Minnesota in August 2019, just after the Chicago indictments.
What happened to get R Kelly in trouble in the first place?
Allegations of inappropriate interactions with children have circulated about R Kelly for years, dating back to her illegal marriage to R&B singer Aaliyah in 1994, when she was just 15 years old.
Despite being arrested in 2002 on allegations of sexually abusing and urinating on a 14-year-old girl, he remained a significant figure in the music industry, collaborating with musicians such as Lady Gaga, Justin Bieber, Usher, and Jay-Z.
Many people cut ties with R Kelly after the 2019 Lifetime documentary series Surviving R Kelly, which gave a voice to many of his victims, the majority of whom are young Black women.
Several of Kelly’s accusers testified in court without using their true names to safeguard their privacy and avoid abuse from the singer’s fans.
Other witnesses spoke about Kelly’s involvement with Aaliyah, who died in 2001.
One of the final witnesses said he sexually abused Aaliyah when she was 13 or 14 years old.
Jurors also heard testimony regarding a bogus marriage arranged in 1994 to shield Kelly after he suspected he had impregnated Aaliyah.
The singer is facing numerous other legal battles, pleading not guilty to sex-related charges in Illinois and Minnesota. The trial dates in such cases have yet to be determined.
How are Racketeering Cases Investigated?
All racketeering charges are serious and intricate offenses that will most certainly be investigated by one or more law enforcement authorities over a long period.
White-collar crimes performed in furtherance of a criminal business may leave a paper trail. Witnesses may present themselves to testify against the participants. Finally, one racketeering participant may testify against his associates in exchange for a reduced sentence.
What are the Charges to Racketeering?
Racketeering and RICO charges are complicated and frequently include a large amount of evidence gathered over a lengthy period by numerous law enforcement agencies.
This means that the police and government had numerous opportunities to make errors in obtaining evidence against you. A competent criminal defense attorney can get illegally obtained evidence tossed out of the case.
Evidence demonstrating that the underlying offenses were not interconnected or undertaken for a common goal is another defense to racketeering. This is the crux of a racketeering case, and if it can be disproven, you should be exonerated.
What should you do if you’ve been Arrested for Racketeering?
If you have been arrested in Nevada for racketeering, you should consult with an experienced Las Vegas defense attorney as soon as possible. You will almost certainly face additional criminal charges, such as criminal conspiracy or mail and wire fraud.
- Racketeering is the illegal acquisition of a business, the operation of a business using illegally acquired income, or the use of a business to commit illegal crimes.
- In order to combat racketeering, the United States government enacted the Racketeer Influenced and Corrupt Organizations Act in October 1970.
- Racketeering can be prosecuted at both the state and federal levels.
- Bribery, gambling offenses, money laundering, obstructing justice or a criminal investigation, murder for hire, and sexual exploitation of children are all federal racketeering offences.
- Murder, abduction, gambling, arson, robbery, bribery, extortion, trafficking in obscene content, and drug offenses are all examples of racketeering at the state level.
Is racketeering a felony?
There are over twenty crimes that can be used to establish a racketeering charge, and most of them are felonies in and of themselves. Committing the offenses is insufficient to convict someone of racketeering.
Why is it called racketeering?
Because of the clandestine nature of the black market, the majority of income from criminal rackets frequently goes untaxed. In a statement against the influence of organized crime in the Teamsters union, the Employers’ Association of Chicago invented the term “racketeering” in June 1927.
What does RICO stand for?
Racketeer Influenced and Corrupt Organization Act
What is the minimum sentence for racketeering?
A criminal with no prior major record sentenced to the minimum level (nineteen) would face thirty (30) to thirty-seven (37) months in jail. This is the absolute bare minimum.
What are the 35 crimes a person can be charged with under the RICO Act?
- Dealing in obscene matter
- Dealing or trafficking a controlled substance or chemical
- Obstruction of justice
- Money laundering
- Commission of murder-for-hire
- Embezzlement of union funds
- Bankruptcy fraud or securities fraud
- Criminal copyright infringement
- Human smuggling
- Acts of terrorism