White collar crimes like money laundering and embezzlement carry extremely harsh penalties under federal sentencing guidelines. RICO, or the Racketeer Influenced and Corrupt Organizations Act, expands the government’s powers to prosecute racketeering activity and white collar crimes. But what is racketeering, and when does a defendant violate RICO?
A defendant cannot be charged with “white collar crime” the way they can be charged with murder, rape, or assault. “White collar crime” is not an individual offense, but an umbrella term that describes many offenses. The FBI’s website puts it in rather blunt terms: “Lying, cheating, and stealing. That’s white-collar crime in a nutshell.” White collar crimes are perhaps best summarized as financial crimes designed for pecuniary gain, and include offenses such as:
(You can read more about the differences between common types of fraud in our guide to understanding fraud charges.)
The RICO Act (Racketeer Influenced and Corrupt Organizations Act), more commonly known simply as RICO, was designed to combat white collar crimes. First introduced in 1970 as part of the Organized Crime Control Act or OCCA, RICO is a federal law that seeks to discourage would-be perpetrators of white collar crimes by permitting increased penalties in the event of a conviction. (In fact, most federal sentences are longer than their state counterparts, though this is not always the case.)
Significantly, RICO also allows the leaders of organizations and businesses to be prosecuted for crimes they allegedly ordered committed, but did not personally commit themselves, thereby broadening the government’s powers of prosecution.
In fact, RICO was developed largely because pre-RICO prosecutors could only target individual suspects, which ultimately proved insufficient as a means of fighting organized crime. As Congress declared in its Congressional Statement of Findings and Purpose, RICO was designed “to seek the eradication of organized crime in the United States by strengthening the legal tools in the evidence-gathering process, by establishing new penal prohibitions, and by providing enhanced sanctions and new remedies to deal with the unlawful activities of those engaged in organized crime.”
As its name suggests, RICO focuses on racketeering, or criminal activity which profits an organization – oftentimes a criminal organization. Racketeering is closely associated with crime syndicates and Mafia organizations around the world, including the American Mafia, the Sicilian Mafia, and Mexican drug cartels.
Like white collar crime, racketeering is also an umbrella term. However, racketeering is even broader in scope, encompassing violent crimes in addition to financial crimes. Under 18 U.S. Code § 1961(1), all of the following offenses can constitute racketeering activity:
This is just a small portion of the full list, which contains no fewer than 35 offenses in total (eight state crimes and another 27 federal crimes). This list is very important to understanding prosecution under RICO, which may occur if “there is a pattern of racketeering activity,” meaning a defendant allegedly commits “at least two acts of racketeering activity” (the second act of which occurs within 10 years of the first act) in accordance with 18 U.S. Code § 1961(5).
RICO targets “enterprises.” This might mean a small, family-operated business, a large corporation, a business partnership, a highly organized crime syndicate, a street gang, or even a political group. The group itself may be illegal (such as the crime syndicate example) or perfectly legal (such as the family-owned business example). It simply depends on the situation.
In order to be successful and obtain a conviction, there are four basic elements prosecutors need to prove:
If you’ve been charged with white collar crimes or federal crimes in Philadelphia or elsewhere in Pennsylvania, you face a lengthy prison term and other harsh penalties. When the stakes are this high, it is absolutely critical that your rights are protected by an experienced legal team with a history of obtaining favorable outcomes. To give one example, attorney Lloyd Long obtained a verdict of not guilty in the biggest federal indictment in the Eastern District of Pennsylvania’s history.
We give free initial consultations, so don’t wait another day to start discussing how we may be able to help you. To speak confidentially with our criminal defense attorneys, call the Law Offices of Lloyd Long today at (215) 302-0171. You will not be charged any fees for your consultation.