Sunday, August 05, 2007

The Evolving Reach Of RICO

For Federal And State Crimes


The Cool Justice Report
Aug. 5, 2007

EDITOR'S NOTE: This column is available for reprint courtesy of The Cool Justice Report,

Newspaper magnate Conrad Black, a member of the British House of Lords, was convicted recently of mail fraud and obstruction of justice in a massive fraud scheme involving his company, Hollinger International.

Black had been charged with racketeering. Critics of the governments use of RICO have decried prosecutions of businessmen for seemingly questionable business practices utilizing a law that was originally used to bring Mafia Dons to justice.

The 18th Amendment, known as the Volstead Act or Prohibition, led to the rise of organized gangs that prospered from illegal bootlegging activities. In 1933, with the passage of the 21st Amendment, the Volstead Act was repealed. With Prohibition ended these firmly entrenched gangs turned to loan sharking, gambling, narcotics, and prostitution and began infiltrating legitimate businesses. Congress recognized that because common-law crimes and legislative acts defining crimes focused on particular acts of wrongdoing, it was advantageous for the government to criminalize such ongoing activities by organized groups. Thus in 1970, Congress passed the Racketeer-Influenced and Corrupt Organizations Act, known as RICO, Title 18, United States Code § 1961, et seq.

The law was aimed at the Mafia, particularly the Capos who were insulated by layers of subordinates. Prior attempts at prosecution often failed because it was difficult to tie the upper echelons of organized crime to specific acts. The remedy fashioned by Congress was to punish association with a criminal enterprise, based on proof of a pattern of racketeering activity. Since then, the scope of such prosecutions has expanded to drug cartels, corrupt politicians, banks, investment firms and even political protesters.
With the advent of RICO, the government has succeeded in prosecuting the heads of a criminal enterprises 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.

RICO specifically seeks to prohibit: participating in an enterprise through a pattern of racketeering activity; using income derived from a pattern of racketeering activity to acquire an interest in an enterprise; conducting the affairs of an enterprise through a pattern of racketeering activity; and, conspiring to commit any of those offenses.

In order to prove that a defendant has violated the RICO statute, the government must establish beyond a reasonable doubt each of the following five elements of the offense: first, that the enterprise existed as alleged in the indictment; second, that the enterprise affected interstate or foreign commerce; third, that the defendant was associated with the enterprise; fourth, that the defendant engaged in a pattern of racketeering activity; and, fifth, that the defendant conducted or participated in the conduct of the enterprise through that pattern of racketeering activity.

Two specific crimes committed by members of the enterprise within 10 years are all that is needed to show a pattern of racketeering activity. The "racketeering activity" is comprised of 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."

Thus, these types of enumerated offenses can be violations of either federal or state law. In fact, many prosecutions are based solely on proven violations of state criminal statutes; particularly in those instances where the judicial interpretation of proof needed to convict under a state statute is less demanding on the prosecution than under the federal counterpart. Often these are state offenses that may not even have been formally charged as crimes. Thus, RICO effectively expands federal jurisdiction to include criminal acts previously within the exclusive province of the states

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 of public 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.

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 and criminal forfeiture can be imposed. The government can seek to forfeit the proceeds of a RICO enterprise. Houses, bank accounts, stocks, cash cars -- any tangible property can be seized to satisfy the forfeiture order. The statute authorizes restraining orders and injunctions prior to conviction to prevent the transfer of potentially forfeitable property.

The broad interpretation of interstate commerce permits RICO to function effectively at the federal level. Yet, states have found a role for RICO and state laws operate on both a criminal and civil basis where activities are limited to intrastate activities. States have followed Congress' lead by enacting their own forms of racketeering laws. Connecticut, as an example, punishes similar types of criminal enterprises under its CORRUPT ORGANIZATIONS AND RACKETEERING ACTIVITY ACT (CORA) § 53-395(c) Conn. Gen. Stats. In New Jersey one may be charged under a similar scheme as a leader of organized crime. (N.J.S.A. 2C:5-2g)

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 government's arsenal. In the cyber age, federal law enforcement has armed itself with computer sleuths. Utilizing sophisticated computer programs, 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.

There have been various constitutional attacks on RICO, principally involving claims that the act is impermissibly vague, in that it fails to give adequate notice that one may be subjected to prosecution. The courts have found that the act does not offend the due process clause of the Constitution.

Bridgeport attorney Richard Meehan Jr. was the lead defense counsel for former Bridgeport Mayor Joseph Ganim's corruption trial. Meehan is certified as a criminal trial specialist by the National Board of Trial Advocacy since 1994 and serves on the organizations Board of Examiners. He is a Charter Fellow, American Academy of Trial Counsel. Meehan has also obtained multi-million dollar verdicts and settlements in complex medical and dental malpractice and personal injury litigation. He is a past president of the Greater Bridgeport Bar Association and appears regularly on Court TV. Website,

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  • 1 comment:

    Don Pesci said...

    Great analysis. Using RICO, you could convict a watermellon for jaywalking. Mr. Meehan does not mention the the prof who constructed the legislation said it should NEVER be used to prosecute political crimes.