What Is RICO Charges

What Is RICO Charges

Federal prosecutors charged you with RICO violations under 18 U.S.C. § 1962 and you’re confused because you thought RICO was for mafia bosses and organized crime. You ran a business, managed employees, conducted transactions – now prosecutors claim that was a criminal enterprise engaging in pattern of racketeering activity. RICO – the Racketeer Influenced and Corrupt Organizations Act – allows federal prosecutors to charge entire organizations and all participants for patterns of criminal activity. It carries twenty years maximum per count and requires forfeiture of all proceeds derived from the enterprise. RICO transforms individual crimes into conspiracy charges that hold everyone in the organization responsible for everything the enterprise did. You didn’t personally commit wire fraud or extortion – but if those crimes were committed by your organization and you participated in the enterprise, RICO makes you responsible for them.

Thanks for visiting Spodek Law Group – a second-generation law firm managed by Todd Spodek, who has defended RICO cases for many, many years. We’ve represented clients charged with RICO for running businesses prosecutors claimed were criminal enterprises, for participating in organizations that engaged in fraud or drug trafficking. RICO is the federal government’s weapon for prosecuting complex, multi-defendant conspiracies. Understanding what makes conduct “racketeering activity” and what constitutes an “enterprise” determines whether your business was legitimate or criminal under federal law.

The Four Elements of RICO

RICO requires proof of four elements: existence of an enterprise, the enterprise affected interstate commerce, defendant was employed by or associated with the enterprise, and defendant participated in the enterprise through a pattern of racketeering activity. Enterprise can be any group of individuals associated in fact, or any legal entity like corporation, partnership, union. It doesn’t have to be an illegal organization – legitimate businesses can be RICO enterprises if used to conduct racketeering. Pattern of racketeering activity means at least two predicate acts of racketeering within ten years. Predicate acts include specific federal and state crimes listed in the RICO statute – murder, kidnapping, robbery, extortion, drug trafficking, fraud, bribery, obstruction of justice, among others.

The enterprise element is broad – any ongoing organization with purpose of conducting affairs together qualifies. Your construction company, investment fund, consulting business – if prosecutors prove it engaged in pattern of criminal activity, it’s a RICO enterprise. The pattern requirement means multiple criminal acts, not just one isolated incident. Two wire fraud schemes, three extortion incidents, five drug transactions – that’s a pattern showing the enterprise engaged in repeated criminal conduct. The participation element requires you to participate in the enterprise’s affairs, not necessarily commit all the predicate acts yourself. If you ran the business while others committed fraud, you participated in the enterprise through a pattern of racketeering if you knew about and facilitated the fraud.

Common RICO Prosecutions

Drug trafficking organizations get charged with RICO when prosecutors can prove the existence of an ongoing enterprise (the drug distribution network), pattern of racketeering (multiple drug transactions), and participation by various members. Gang prosecutions use RICO to charge entire gangs and all members for crimes committed by anyone in the gang. White-collar RICO cases target businesses engaged in fraud schemes – boiler room stock frauds, Ponzi schemes, healthcare fraud rings. Labor union corruption cases use RICO to prosecute union officials for extortion, embezzlement, and bribery.

Prosecutors love RICO because it allows them to charge everyone involved in criminal enterprise, not just the people who committed specific crimes. You managed the business while others committed fraud? RICO makes you liable. You handled finances while others trafficked drugs? RICO includes you in the conspiracy. You provided services to the organization knowing it was criminal? RICO charges you as participant in the enterprise. This sweeps in defendants who might not be guilty of underlying substantive crimes but who aided the enterprise.

Penalties and Forfeiture

RICO carries maximum twenty years per count, or life if predicate racketeering acts carry life sentences. Prosecutors can charge multiple RICO counts based on different predicate acts or different enterprises. RICO also mandates criminal forfeiture of all interests in the enterprise and all proceeds derived from racketeering. That means the government seizes your business, your assets, your property if they’re connected to the RICO enterprise. Forfeiture isn’t limited to illegal proceeds – the government can seize entire businesses, real estate, bank accounts, investments if they were acquired through or used in racketeering activity.

Civil RICO allows victims to sue for treble damages – three times their actual losses. If your business is convicted of RICO, victims can file civil lawsuits seeking triple damages for harms caused by the racketeering activity. This exposes defendants to crushing civil liability on top of criminal penalties. Criminal RICO conviction proves the elements for civil RICO, making civil cases nearly automatic wins for victims.

Defenses to RICO Charges

No enterprise existed – the organization wasn’t structured or ongoing enough to qualify as RICO enterprise, it was loose association for legitimate purposes. No pattern of racketeering – the predicate acts were isolated incidents, not pattern showing regular enterprise conduct. Lack of participation in enterprise affairs – you were employee with no knowledge of criminal activity, you didn’t participate in management or decision-making. Predicate acts weren’t proven – prosecutors must prove each predicate act of racketeering beyond reasonable doubt, if they fail to prove the predicates, the RICO charge fails.

Withdrawal from conspiracy – you ceased participation in the enterprise before the charged racketeering acts occurred, you took affirmative steps to disassociate from criminal activity. Legitimate business with isolated bad actors – the enterprise was fundamentally legitimate business, criminal acts were unauthorized conduct by rogue employees you didn’t know about. These defenses require evidence: contemporaneous documents showing lack of knowledge, organizational structure proving you weren’t involved in decision-making, witness testimony confirming your limited role.

Why RICO Is Prosecutors’ Favorite Tool

RICO allows prosecutors to tell comprehensive story of criminal organization rather than prosecuting piecemeal individual crimes. Instead of charging you with one wire fraud count for one transaction, they charge RICO based on pattern of wire frauds over years. Instead of proving you personally committed each crime, they prove you participated in enterprise that committed crimes. RICO creates joint liability – everyone in the enterprise is responsible for foreseeable crimes committed by the enterprise. You didn’t know about specific fraud your co-defendant committed? Doesn’t matter if it was foreseeable part of enterprise’s pattern of racketeering.

RICO also allows prosecutors to introduce evidence that wouldn’t be admissible in trials for individual crimes. Proving the existence and nature of the enterprise lets them present years of background conduct, organizational structure, relationships between defendants. This paints defendants as career criminals operating sophisticated criminal organizations rather than people accused of specific acts. Juries hear about the entire criminal enterprise, not just the particular crimes charged. That context prejudices juries against defendants even when evidence of specific guilt is weak.

RICO cases are complex, expensive to defend, and risky to take to trial. Multiple defendants mean coordination problems, finger-pointing between co-defendants, and strategic decisions about cooperation. If one defendant cooperates and testifies about the enterprise, that testimony implicates everyone else. RICO’s forfeiture provisions seize assets defendants need to pay for defense, forcing them to rely on appointed counsel or retain attorneys without retainers. The twenty-year maximum plus forfeiture plus civil liability exposure creates enormous pressure to plead guilty and cooperate.

Todd Spodek has defended RICO cases throughout his career – SDNY, EDNY, federal courts nationwide. We’ve challenged enterprise allegations, contested pattern-of-racketeering claims, and negotiated plea agreements that avoided RICO convictions. When you’re charged with RICO violations, call 212-300-5196.