Civil Liability Under RICO: Unintended Consequences of Legislation

Abstract

The Racketeer Influenced and Corrupt Organizations chapter of the Organized Crime Control Act of 1970 (hereafter RICO) imposes additional civil and criminal penalties on certain behaviour that is already subject to criminal sanctions. In particular, RICO defines ‘racketeering activity’ as any one of a litany of state and federal crimes, ranging from murder and kidnapping to money laundering. A single ‘racketeering activity’ is not enough to trigger RICO penalties. Rather, it is necessary that a ‘pattern of racketeering activity’ exists, consisting of two or more acts of racketeering activity. This pattern of racketeering activity must also be connected to an ‘enterprise’ that is engaged in interstate or foreign commerce. An ‘enterprise’ can be an ‘individual, partnership, corporation, association or other legal entity, and any union or group of individuals associated in fact although not a legal entity’. A connection between such an enterprise and the pattern of racketeering activity exists, triggering RICO liability, whenever the proceeds from the racketeering activity are invested in the enterprise or are used by any person to acquire or maintain any interest in or control of the enterprise.