Bhakta David Nollmeyer

The RICO Statutes or more correctly the Racketeer Influenced and Corrupt Organizations Act are fast becoming a major source of legal code for both criminal and civil actions. More formally RICO is TITLE 18, PART 1, CHAPTER 96, Section 1961 of the United States Code. Other prominent sections of the law are as follows:

The history of RICO has origins in prohibitions into piracy, smuggling, and forfeiture. Following the Norman Conquest of England, William the Conqueror (1066 1087) instituted a land tenure system based on the principle of absolute ownership by the Crown. In essence this was feudalism. The introduction of the concept of felony in British common law is genus for the species treason. The term felonia first appears in 1108 during the reign of Henry I (1100 1135) and is used to discuss a vassal's breach of contract to his lord (Goebel 1976). Feudalism was not abolished in England until 1660.

Treason resulted in death as well as an immediate forfeiture of lands and property to the king. Felonies resulted in death and land and chattel were escheated to the lord (Greek 2003). Hence the modern code has been particularized from English common law and other codes designed to fight organized crime from the thirties. There is also a nexus with other foreign laws as the countries of Italy and Russia to fight Mafia styled crime and racketeering.

The sophisticated nature and scope of systematic crime gave rise to a more unified crime fighting tool (Cain 1996):

However, in 1970, in order to meet the rise in organized crime activity, Congress enacted RICO, the first criminal forfeiture statute in American history. RICO allows the seizure of property, particularly money, obtained from a pattern of racketeering activity. It is an effective weapon on the war on drugs and has been used with increasing regularity. Since RICO, Congress has passed only two other forfeiture statutes: the Continuing Criminal Enterprise Act (CCE) and the Comprehensive Drug Abuse Prevention and Control Act (CDAPCA). Section 1963(a) (1) of RICO was designed to effect an attack upon the economic bases of organized crime; the goal being to remove the incentive of capitalization through forfeiture (Cain, 1996).

The concept of RICO is to deny the intent of one or an association to conceptualize and or carry out a criminal conspiracy. It is also a check to recruit membership or diversity of such. In the United States most non sundry felonies under U.S. jurisdiction at the state or federal level committed by an adult may be certified as a predicate act. Upon two such certifiable felonies, the prosecutor or petitioner may ask the Court to certify the defendant(s) or respondent(s) as a RICO enterprise. An array of acts are covered which are known as racketeer influenced behavior. They are: intimidating a witness, hostage taking, kidnapping, and murder. In combination at any level of this structure may be blackmail and extortion.

Sec. 1961. Definitions

This section attempts to narrow the discussion of code. Prominent are under (1) (A) which define the racketeer influenced behavior including arson and dealing in a controlled substance. Under (B) of interest is the protection of the law and the witness. The latter are usually the victims in the use of the racketeer influenced behavior. The use of violence against persons is a key feature of corrupt organizations. In support one should note 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), and section 1513 (relating to retaliating against a witness, victim, or an informant).

The Department of Justice Criminal Resource Manual describes:

An "enterprise" is defined as including 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.A. 1961(4) (West 1984). Many courts have noted that Congress mandated a liberal construction of the RICO statute in order to effectuate its remedial purposes by holding that the term "enterprise" has an expansive statutory definition. United States v. Delano, 825 F. Supp. 534, 538-39 (W.D.N.Y. 1993), aff'd in part, rev'd in part, 55 F. 3d 720 (2d Cir. 1995), cases cited therein.

A pattern of racketeering activity requires at least two acts of racketeering activity committed within ten years of each other. 18 U.S.C.A. 1961(5) (West 1984).

Continuity has been a rebuttal to certification. Congress has prescribed that a long range of time of illegal activity is required to certify a predicate act. However in the law of case Chief Justice Scalia has stated it would be absurd to say that "at least a few months of racketeering activity... is generally for free, as far as RICO is concerned." Id. at 254, 109 S. Ct. at 2908. This would be taken in the context that there is a threat of long term illegal activity.

Sec. 1962. Prohibited activities

This section attempts to constrain the profits from patterns of racketeering activity. One may not according to (a) recover any debt regarding a racketeering activity. Acting as principal or any relative or accomplices to the fact are also proscribed from receiving any remuneration or gain from criminal activity. Subsection (b) clearly prevents any ownership in a RICO enterprise:

It shall be unlawful for any 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.

Subsection (c) prevents the participation of one in a pattern of racketeering activity directly or indirectly in the conduct of the enterprise or through the collection of a debt. In close, (d) states:

It shall be unlawful for any person to conspire to violate any of the provisions of subsection (a), (b), or (c) of this section.

The prosecution in criminal cases must prove beyond a doubt that: (1) that an enterprise existed; (2) interstate commerce was effected; (3) the defendant was associated with or employed by the enterprise; (4) the defendant engaged in a pattern of racketeering activity; (5) the defendant conducted or participated in the conduct of the enterprise through a pattern of racketeering activity through the commission of at least two acts as set forth in the indictment. United States v. Phillips, 664 F. 2d 971, 1011 (5th Cir. Unit B Dec. 1981), cert. denied, 457 U.S. 1136, 102 S. Ct. 1265, 73 L.

Sec. 1963. Criminal penalties

One who violates any provision of section 1962 of this chapter shall be fined or imprisoned not more than 20 years or life imprisonment if the racketeering activity is inclusive or both fine and imprisonment regardless of any state law. In following this section provides for relief through the forfeiture (a) (et seq.) of interest, security, claim against, property or contractual right of any kind affording a source of influence over;

(2)(D) any enterprise which the person has established, operated, controlled, conducted, or participated in the conduct of, in violation of section 1962; and

(3) 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.

(c) All right, title, and interest in property described in subsection (a) vests in the United States upon the commission of the act giving rise to forfeiture under this section. Any such property that is subsequently transferred to a person other than the defendant may be the subject of a special verdict of forfeiture and thereafter shall be ordered forfeited to the United States.

Subsection (d) provides that upon application of the United States, a restraining order or injunction, would require a satisfactory performance bond for property described in (a) for forfeiture.Generally after conviction such property would result in forfeiture. A process of information and indictment is necessitated to sustain such an order past ninety days (d) (2). Pursuant to such a hearing evidence that would not normally be heard under the Federal Rules of Evidence may be brought.

In close, the Attorney General is authorized power to grant petitions for mitigation or remission of forfeiture, restore forfeited property to victims, and take action to protect the rights of innocent persons which is in the interest of justice. Power is granted to compromise claims arising under this section; award compensation to persons providing information resulting in forfeiture under this section; and direct the disposition by the United States of all property ordered forfeited under this section by public sale or any feasible means in consideration of the legal right of persons.

Sec. 1964. Civil remedies

This section defines jurisdiction in regards to the United States, Attorney General, permits any injured party to sue for threefold damages, and declares that a final judgment or decree in favor of the United States will estop the defendant from denying any criminal allegations in a subsequent civil action brought by the United States.

(a) The district courts of the United States shall have jurisdiction to prevent and restrain violations of section 1962 of this chapter by issuing appropriate orders, including, but not limited to: ordering any person to divest himself of any interest, direct or indirect, in any enterprise; imposing reasonable restrictions on the future activities or investments of any person, including, but not limited to, prohibiting any person from engaging in the same type of endeavor as the enterprise engaged in, the activities of which affect interstate or foreign commerce; or ordering dissolution or reorganization of any enterprise, making due provision for the rights of innocent persons.

(b) The Attorney General may institute proceedings under this section. Pending final determination thereof, the court may at any time enter such restraining orders or prohibitions, or take such other actions, including the acceptance of satisfactory performance bonds, as it shall deem proper.

Sec. 1965. Venue and process

This section prescribes that a civil action is brought correctly under the courts in personemjurisdiction based on the following grounds:

(a) Any civil action or proceeding under this chapter against any person may be instituted in the district court of the United States for any district in which such person resides, is found, has an agent, or transacts his affairs.

(b) In any action under section 1964 of this chapter in any district court of the United States in which it is shown that the ends of justice require that other parties residing in any other district be brought before the court, the court may cause such parties to be summoned, and process for that purpose may be served in any judicial district of the United States by the marshal thereof.

Subpoenas issued by the court to compel attendance of witnesses may be served in any other district. Subsection (c) states any service upon a person who resides over one hundred miles away in another district from where the court is held needs special approval from a judge with good cause. In subsection (d) it is stated that all other processes or proceedings held under this chapter are correctly served upon any person regardless of the judicial district of residence.

Sec. 1966. Expedition of actions

This very brief section gives the United States priority on the court's docket in civil actions brought by the Attorney General. Civil dockets by prisoner petitioners have precedence as extraordinary writs such as the habeas corpus. Generally all federal civil petitions may be expedited by having both petitioners and respondents agree to have the case heard by a magistrate judge initially than a district judge.

In any civil action instituted under this chapter by the United States in any district court of the United States, the Attorney General may file with the clerk of such court a certificate stating that in his opinion the case is of general public importance. A copy of that certificate shall be furnished immediately by such clerk to the chief judge or in his absence to the presiding district judge of the district in which such action is pending. Upon receipt of such copy, such judge shall designate immediately a judge of that district to hear and determine action.

Sec. 1967. Evidence

In any proceeding ancillary to or in any civil action instituted by the United States under this chapter the proceedings may be open or closed to the public at the discretion of the court after consideration of the rights of affected persons.

The section at face renders a sufficient explanation.

Sec. 1968. Civil investigative demand

The section deals with what may be construed to as discovery rights as motions for production of material evidence. The code uses the word demand in (a). Later in (c) (1-2) the Latin subpoena duces tecum is used to clarify a demand in relation to a grand jury hearing into the investigation.

(a) Whenever the Attorney General has reason to believe that any person or enterprise may be in possession, custody, or control of any documentary materials relevant to a racketeering investigation, he may, prior to the institution of a civil or criminal proceeding thereon, issue in writing, and cause to be served upon such person, a civil investigative demand requiring such person to produce such material for examination.

(c) No such demand shall -

(1) contain any requirement which would be held to be unreasonable if contained in a subpoena duces tecum issued by a court of the United States in aid of a grand jury investigation of such alleged racketeering violation; or

(2) require the production of any documentary evidence which would be privileged from disclosure if demanded by a subpoena duces tecum issued by a court of the United States in aid of a grand jury investigation of such alleged racketeering violation.

Service of the demand may be made by mail to the person upon who the demand is ordered. The return of the post office receipt will function as proof of service.

The Attorney General shall designate a racketeering investigator who shall serve as racketeer document custodian. The production of the materials made shall be to this officer. Copies of materials may be substituted by agreement of parties. The racketeer document custodian is in charge of the preparation of these materials at the order of the Attorney General (3). Only the Attorney General may inspect the items unless there is consent by the person who deposited the items. Subsection (4) also designates that any attorney appearing on behalf of the United States shall have access to such materials.

Subsection (7) (h) permits a person to petition to modify or set aside the order. In degree a time limit of twenty days is permitted for a show of cause.

After the termination of all hearings the custodian shall return all the demanded articles to the depositor in a timely manner. The section gives broad power to the interests of the United States to request and control material that be part of the construction or documentation of the RICO enterprise.

Summary

The unity of the RICO statutes is that such permits the building of a criminal or civil case regarding events that do not prima facie appear to be part of a larger organization. The statutes give considerable leverage to the United States Attorney General to coordinate resources to direct the fragmentation, prosecution, and divestment of the enterprise. There are opinions that the basic constitutional rights of the average citizen have been abridged by returning power to the Department of Justice from the citizen. This critique is beyond the scope of this brief.

In points of criminal law, the authors of RICO crafted such that the United States could not directly proscribe the status of being a member of a criminal organization. Alternatively, crimes in which organized crime groups typically are supposed to engage were cited, and then RICO made participation in a group that commits such crimes. RICO, in this respect, is similar to conspiracy, which technically is defined in terms of an act; the act of agreeing to commit a crime, but which the courts treat as an enterprise. An enterprise may be only one principal.

RICO has been used to greatest success, to prosecute those who commit crimes as part of a group. It goes beyond conspiracy, in that it permits the joinder of members of a group who are too loosely connected with each other to be considered parties to a single conspiratorial agreement. RICO permits the prosecution to bring to trial all members of the group, to expose the full scope of the organization, and according to Wise "present a complete picture of a large scale, ongoing, organized crime group engaged in diverse rackets and episodic explosions of violence." (Wise 2000).

Agreement of a conspirator with other principals is not needed for successful prosecutions, Delano, 825 F. Supp. at 542. All that must be shown is: (1) that the defendant agreed to commit the substantive racketeering offense through agreeing to participate in two predicate acts; (2) the principal had knowledge of the general status of the conspiracy; and (3) that one knew the conspiracy extended beyond one's individual role. United States v. Rastelli, 870 F. 2d 822, 828 (2d Cir.), cert. denied, 493 U.S. 982, 110 S. Ct. 515, 107 L. Ed. 2d 516 (1989).

Conclusion

According to Carlson, K & Finn, P. 1993:

In 1990, 3,248 defendants in cases terminated in United States District Courts were charged with either racketeering or one or more of the offenses underlying the racketeering statute. Thirty one percent of these defendants, 996 were specifically charged with a racketeering violation. Over a 3 year period ending June 30, 1990, racketeering convictions were based principally on charges of interstate travel in aid of racketeering (28%) or RICO (27%). The predicate offenses on which racketeering convictions were based were primarily gambling offenses (21%), drug offenses (23%), and threats and extortion (22%).

The average monetary loss in such cases involving racketeering was $1.9 million dollars. Prosecutions on racketeering charges were more likely in the eastern United States than in the west. A quarter (27%) of defendants in racketeering cases terminated in 1990 were prosecuted in five judicial districts (Northern Illinois, Southern Florida, Southern and Eastern New York, and South Carolina) (Carlson, K. & Finn, P. 1993).

Criminal and civil complaints are growing increasingly novel. The range in subject matter can be from abortion protests, divorce settlements, securities, towards abuse by clergy. The code does not specify in the abstract more than the generic term felony. The Courts have been used extensively in the law of case to narrow the various types of pleadings that can be heard under the RICO statutes. Many of the cases are recent opinions. In addition to official government sources, the Rico Law Reporter is a very professional publisher of legal consultation that endeavors to cover all RICO filings and dispositions.