"The Act"

Originally created as a tool to prosecute Mafia chieftains, RICO has now become the chief weapon in the Government's prosecution of public corruption and corporate scandals.   For decades Mafia Dons had insulated themselves from prosecution by layers of command and relegating criminal acts to their foot soldiers.   With the advent of RICO the Government has succeeded in prosecuting the heads of a criminal enterprise even though it cannot attribute any direct criminal conduct to those persons.   It is the existence of the racketeering enterprise, proof of the defendant's association with that enterprise, and proof of a pattern of racketeering activities that can lead to a conviction.  

Two specific crimes committed by members of the enterprise within ten years are all that is needed to show a pattern of racketeering activity. The "racketeering activity" is the criminal activities in which the enterprise engages-- "any act or threat involving murder, kidnapping, gambling, arson, robbery, bribery, extortion, dealing in obscene matter, or dealing in a controlled substance . . . which is chargeable under State law and punishable by imprisonment for more than one year." Once linked to an enterprise, proof that the enterprise has engaged in these criminal actions constitutes a pattern of racketeering activity. The government can criminally prosecute the Mafia Don under RICO and send him to jail even if the Don has never personally engaged in any criminal behavior. The Don can be convicted because he operated and managed a criminal enterprise that engaged in these crimes.

An мenterpriseо may be an illegitimate enterprise, such as a Mafia family, or a wholly legitimate enterprise, such as a corporation a partnership, or association.   However, there does not have to be a formal structure.   An enterprise can also be an individual or simply a relatively loose-knit group people or legal entities. (These are referred to as "association-in-fact" enterprises.

When Congress created the RICO act, the phrase "association-in-fact" enterprise was intended to apply directly to the Mafia, because a Mafia family is not a formal legal entity nor is it an individual, rather it is a "union or group of individuals associated in fact although not a legal entity." Corporations and their subsidiaries allegedly engaged in criminal activities have also been named as association-in-fact enterprises. Most courts will accept any informal group as an association-in-fact enterprise so long as the group possesses three characteristics: (a) some continuity of structure and personnel; (b) a common or shared purpose; and (c) an ascertainable structure distinct from that inherent in the pattern of racketeering.

Conspiracy to violate the RICO Act is charged as a separate crime, in addition to the substantive RICO violation.   (insert Arterton charge on this).   In the case of former Providence Mayor Buddy Cianci, the Government was unable to prove any of the independent counts of racketeering or its included offenses of bribery, extortion or mail fraud.   The jury nonetheless convicted Cianci or RICO conspiracy.   The crime of conspiracy requires proof that two or more persons agreed to engage in criminal conduct.   The conspiracy does not require proof that the ultimate crime was committed.   It is the agreement to commit the crime, once played in motion by an overt act, that is criminal in and of itself. Charging conspiracy allows the Government to introduce into evidence the out of court statements of other conspirators, whether or not indicted or named previously.   This relaxed rule of evidence is a powerful tool in the prosecution's arsenal.

Whether convicted of the substantive RICO count or RICO conspiracy, the penalties are potentially severe. Each crime carries up to 20 years in prison.   In addition, fines can be astronomical (insert link to fine statutes) and criminal forfeiture can be imposed.   The Government can seek to forfeit the proceeds of a RICO enterprise.   Houses, bank accounts, stocks, cash carsуany tangible property can be seized to satisfy the forfeiture order.

The use of RICO has evolved.   Prosecutors who previously were unable to convict corrupt public officials or corporate executives because of the absence of direct evidence of the official's participation in the crime, have now turned to the RICO Act to obtain convictions. It is often difficult to prove that a public official has received benefits to which he or she is not entitled in exchange for the awarding contracts.   Utilizing RICO, prosecutors now strive to show the loose association of an enterprise with benefits flowing to the official in the nature of bribes or extortion.   Convictions are more easily obtained.

Defending RICO charges is complex.   The law is complicated and constantly developing. Federal investigators will link seemingly unrelated and sometimes ancient investigations with current investigations to support the claim of an enterprise and racketeering activity.   Wiretaps, video surveillance, the use of cooperating witnesses (usually close friends and allies) and intense financial investigations are weapons in the Governments arsenal.   In the cyber age federal law enforcement has armed itself with computer sleuths.   Utilizing computer programs like Carnivore (click here for article) hard drives are analyzed.   E-mails, financial records, websites visited are retrieved and reconstructed despite the best efforts to have deleted them.   Secret Grand Jury subpoenas are issued for financial records, and witnesses are called to provide testimony or produce documents.   Those subpoenaed are warned not to reveal the existence of the subpoena or their testimony with a threat of prosecution for Obstruction of Justice. Drawing on the skills of specially trained agents of the IRS Criminal Investigation Division (CID) bank records, brokerage accounts, accounting files and the like are microscopically examined.   These financial pitbulls will spend endless hours examining every check, every entry, speak to vendors, clients, investorsуliterally anyone whose name is linked financially to the target.

The defense of a RICO case does not begin with the indictment.   Counsel should be retained quickly when word of an investigation surfaces.   Successful defense of a complex federal investigation requires building an experienced defense team, one with the background and skills that rival those available to the Government.   At MM&G we employ a team approach to complex cases.   Forensic accountants, CPA's, investigators, computer specialists and lawyers with the experience and knowledge of how the Government builds a case are the ingredients for a successful defense.   Marshalling and preserving evidence, witness interviews and financial analysis should begin long before an indictment is returned.

A frequent corollary to RICO prosecutions are tax crimes.   Filing materially false returns, failure to file and tax evasion generally accompany RICO investigations.   In instances where the Government cannot successfully build a case for RICO, Bribery, Mail Fraud or Extortion, tax crimes become their focus.   Pre-indictment intervention by experienced lawyers armed with the aid of a forensic accounting team can, at times, even stave off prosecution.