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If you’ve ever found yourself grousing that a fee or a cost is a racket, then congratulations—you have just accused the seller of racketeering. Racketeering is the process of conducting a racket. A racket is a criminal enterprise whereby victims are made to pay for solutions to problems that do not exist or that will not be put into effect.
The diversity of rackets is truly a wonder of criminal enterprise. Rackets transcend all areas of crime from fraud to prostitution to arson. Some of the more well-known rackets include the protection racket whereby the racketeers solicit (extort) payments of fees from property owners in exchange for protecting that property from damage that the racketeers are also responsible for creating. Another racket includes the fence racket where racketeers steal items and then sell them back to their original owners.
Other crimes such as computer crimes, bank fraud, and bribery are elevated to the level of racketeering if committed for the benefit of crime groups. Even legitimate business enterprises become racketeering if they are done to benefit a crime group or if the group breaks the law to allow the business to succeed (i.e. price fixing, infringement, and loan sharking).
Racketeers are charged under the Racketeer Influence and Corrupt Organizations Act (RICO) with engaging in a pattern of criminal activity. It’s a fairly low bar to reach, which is why RICO cases are so widely used and applicable to so many different scenarios ranging from labor unions to motorcycle gangs. What is unique about RICO, however, is that it also contains a civil statute under which private citizens can sue for economic losses as a result of racketeering.
Racketeering remains alive and well even today, as evidenced by the 2015 scandal involving the Federation Internationale de Football Association (FIFA) with charges of bribes being paid for exclusive clothing contracts and rigging the FIFA presidential elections in 2010 and 2011.
Not surprisingly, the penalties for racketeering are steep ranging from fines, prison time, forfeiture of assets, and probation. Usually, there is a combination of two or more of these penalties for the maximum punishment. The asset forfeiture provision is particularly effective in taking the financial gain out of racketeering.
If you have questions about racketeering, including the almost infinite number of ways in which it can be alleged, contact the attorneys at Weisberg Kainen Mark. We can answer all of your questions today!
Weisberg Kainen Mark, PL
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