The word“racketeering” became popular in the US during Prohibition to describe dishonest or fraudulent business practices or swindling schemes. At that time, the manufacture and distribution of illegal alcohol led to the rise of organized crime rackets, particularly among the mafia families of New York. Although state and federal prosecutors could convict the lower-ranking members of these organizations who directly committed illegal offenses, they found it extremely difficult to prosecute the leaders of these organizations,who directed their subordinates to engage in crimes such as racketeering.
To combat the increasing influence of organized crime rings, Congress enacted the Racketeer Influenced and Corrupt Organizations (RICO) Act in 1970, allowing prosecutors to convict these leaders without proving they directly committed the crime. The RICO Act covers 35 offenses, ranging from white-collar crimes to kidnapping, human trafficking, and murder. Today, this law has expanded to pursue convictions against various organizations, from street gangs to corrupt police officers, and many states, including Texas, have passed similar laws.
If you suspect you are under investigation for problematic business schemes, review the following information to learn more about racketeering charges, then contact McNally Law right away. Immediately securing legal representation from a Nashville RICO lawyer is crucial for protecting your rights and your business’s future.
Federal RICO law covers the prosecution and defense of individuals who engage in criminal activity as part of any enterprise that impacts commerce in the US or across international borders. Under the RICO Act, defendants may be prosecuted for criminal offenses or held liable in civil claims for unlawful actions performed in connection with or at the behest of a criminal organization. The purpose of RICO law is not simply to punish individual offenders for single criminal incidents. Instead, it aims to uncover criminal rings that infiltrate legitimate industries to engage in patterns of wrongdoing through the operation or use of a business, halt their flow of income, and impose severe criminal consequences on the involved individuals.
According to US Code Title 18, Section 1961, it is unlawful for anyone employed by or otherwise associated with an enterprise that engages in activities affecting interstate or foreign commerce to participate (directly or indirectly) in the affairs of this enterprise via a pattern of racketeering activity. Racketeering specifically involves profiting from illegal activities through intimidation, force, or violence. An “enterprise” refers to any individual, partnership, association, corporation, or other legal entity as well as any group of individuals associated to achieve a common purpose.
“A pattern of racketeering activity” involves at least two related and continuous acts of racketeering activity committed within 10 years. This also covers “predicate acts,” or criminal offenses used to perpetrate more serious crimes (such as wire fraud used to commit a subsequent theft). Predicated acts are related if they have similar goals, participants, victims, methods of commission, or are otherwise interrelated rather than isolated events. Continuity refers to a closed period of repeated illegal conduct or past conduct that may project into the future via the threat of repetition. Prosecutors establish this threat by proving that the illegal acts are part of a long-term criminal enterprise or that they form a regular part of the defendant’s conduct or participation in a legitimate business.
The US Code sets forth an extensive list of offenses considered “racketeering activities” if they are committed as part of a criminal enterprise. Some offenses punished under RICO law are:
Federal racketeering charges may be levied against illegal businesses or legitimate businesses that operate as fronts to conceal illegal schemes or criminal activities. In addition, RICO charges can be filed against one person, multiple people, or an entire organization.
A defendant may be guilty of violating federal RICO laws in any of the following ways:
For prosecutors to convict a defendant on racketeering under the RICO Act, they must prove the following beyond a reasonable doubt:
Prosecutors do not need to prove the defendants all knew each other, agreed with each other, or had full knowledge of all the conspiracy’s details. Instead, they are only required to show that the defendant knew the general status of the conspiracy, was aware that the conspiracy extended beyond their specific role, and that they agreed to commit racketeering by participating in two racketeering activities.
The RICO Act sets forth criminal penalties and civil remedies for defendants convicted of racketeering activities. When prosecutors charge a defendant with racketeering, they are also usually charged with several related crimes. Each count of racketeering is punishable by up to 20 years in state prison and a fine of $250,000 or double the amount of the profits acquired from the activity, along with criminal penalties for the other offenses. If a racketeering charge is combined with predicate crimes punishable by life imprisonment, such as murder, prosecutors can impose this sentence for a conviction.The court may also pursue equitable or injunctive relief through court orders that order the parties to cease their illegal actions, dissolve the organization, or engage in corrective action.
Even before securing a conviction, RICO also gives the attorney general the authority to freeze or seize any assets or interests that can be traced to an alleged racketeer or criminal organization, including homes and businesses.After indicting a defendant on federal RICO charges and while the case is pending, the attorney general can request a pre-trial order for seizure or forfeiture of assets and property acquired or maintained through racketeering. This includes real property such as homes or businesses and tangible and intangible personal property, including rights, interests, claims, privileges, and securities. Although this procedure is designed to prevent defendants from moving or concealing property before it can be located, it can significantly impact the defendant’s ability to retain legal representation from a Nashville racketeering attorney and mount an effective defense against their charges.
Private individuals and companies that sustained financial losses due to the illegal actions of the criminal enterprise can file civil claims against the responsible parties to recover damages that resulted from these actions. Unlike the reasonable doubt standard applied to criminal cases, the burden of proof for civil cases follows a less demanding standard known as preponderance of the evidence. This means the jury must determine that it is more likely than not that the racketeering activities occurred as alleged. If they are successful, plaintiffs can recover treble damages, or three times the value of their losses, and the cost of attorney fees.
In addition to violating federal laws, racketeering also violates Texas law. Racketeering offenses are prosecuted under the Texas Organized Crime Statute (Penal Code, Title 11, Chapter 71, Section 71.02), which makes it illegal for any individual to commit or conspire to commit crimes to establish, maintain, or participate in a criminal “combination,” participating in the profits of such a combination, or acquiring profits as a member of a criminal street gang. This statute defines a combination as three or more individuals who collaborate in performing criminal activities. Participants can be convicted regardless of whether they are aware of other participants’ identities, whether membership changes over time, or how close a relationship they have with the underlying criminal enterprise.
Individuals can be charged with engaging in organized criminal activity for many of the same offenses covered under federal RICO law, such as assault, murder, robbery, kidnapping, and arson. Prosecutors sentence convicted defendants who engage in organized criminal activity by imposing penalties one level higher than the most severe offense committed.
For example, because burglary is considered a second-degree felony, a defendant convicted of burglary as a racketeering activity would receive penalties for a first-degree felony. However, if the most serious offense is a first-degree felony, it will remain a first-degree felony. In addition, penalties for conspiracy convictions are enhanced to equal the penalties for committing the crime. For example, if the defendant conspired with a criminal enterprise to commit an offense that would be charged as a second-degree felony, conspiracy also carries second-degree felony penalties.
Before the attorney general’s office can file an indictment that contains a federal RICO charge, they must obtain special consideration and approval. This is meant to prevent federal authorities from using RICO to prosecute crimes that are simply violations of state law unless they provide a compelling reason to do so. Approval requires meeting at least one of the following criteria:
To convict a defendant in a RICO case, the prosecution must present clear, compelling evidence that the defendant knowingly, intentionally, and repeatedly engaged in criminal activity. The burden of proof is high in these cases, and establishing guilt beyond a reasonable doubt requires meeting all elements of the case described above as well as material evidence of the crime. RICO crimes cannot be charged against an individual unless prosecutors establish a connection between the defendant and the criminal enterprise. Committing only one criminal act does not meet the necessary standards for conviction under RICO. There must be evidence of more than one criminal act to demonstrate a continual and repetitive pattern of behavior.
Unfortunately, prosecutors often use RICO statutes to unfairly tie innocent individuals with street gangs or other organized criminal enterprises and impose the harshest possible penalties under the law. Because they have broad discretion under RICO and can begin seizing assets before a case goes to trial, securing legal representation as soon as possible is vital for achieving the best outcome in a racketeering case. A Nashville racketeering attorney with experience handling RICO cases can thoroughly examine the indictment to find weaknesses in the prosecution’s case, such as failure of the alleged conduct to meet the requirements of RICO law.
Potential defenses against RICO charges vary based on the offenses charged as racketeering activities, but the most common defenses involve challenging the prosecution’s assertion that the defendant engaged in a pattern of racketeering activity. An attorney may argue any of the following defense strategies:
If you have been charged with a RICO offense or suspect you may be under investigation, obtaining legal representation from an experienced Nashville RICO lawyer is crucial. A conviction for a RICO crime is punishable by exorbitant fines and decades to life in prison, and the government can force you to forfeit your interests in the alleged criminal organization before the case even reaches trial. If you are convicted, this can ruin your financial stability and devastate your business. In addition, federal prosecutors have many resources at their disposal to mount a case against you, and you need an attorney on your side who is dedicated to advocating on your behalf equally as aggressively.
At McNally Law, we have over 35 years of experience representing clients against RICO charges, including cases brought before federal district courts, the Tennessee Supreme Court, and the US Supreme Court. We work diligently to provide our clients with the highest level of legal representation throughout every stage of their case so they can achieve the best outcome. RICO charges can be intimidating, but you don’t have to confront them alone. Contact McNally Law today to protect your rights, interests, and future.