Under RICO, a person who is a member of an enterprise that has committed any two of 35 crimes—27 federal crimes and 8 state crimes—within a 10-year period can be charged with racketeering. Those found guilty of racketeering can be fined up to $25,000 and sentenced to 20 years in prison per racketeering count. In addition, the racketeer must forfeit all ill-gotten gains and interest in any business gained through a pattern of “racketeering activity.” RICO also permits a private individual harmed by the actions of such an enterprise to file a civil suit; if successful, the individual can collect treble damages.
When the U.S. Attorney decides to indict someone under RICO, he or she has the option of seeking a pre-trial restraining order or injunction to temporarily seize a defendant’s assets and prevent the transfer of potentially forfeitable property, as well as require the defendant to put up a performance bond. This provision was placed in the law because the owners of Mafia-related shell corporations often absconded with the assets. An injunction and/or performance bond ensures that there is something to seize in the event of a guilty verdict.
In many cases, the threat of a RICO indictment can force defendants to plead guilty to lesser charges, in part because the seizure of assets would make it difficult to pay a defense attorney. Despite its harsh provisions, a RICO-related charge is considered easy to prove in court, as it focuses on patterns of behavior as opposed to criminal acts.
There is also a provision for private parties to sue. A “person damaged in his business or property” can sue one or more “racketeers”. The plaintiff must prove the existence of an “enterprise”. The defendant(s) are not the enterprise; in other words, the defendant(s) and the enterprise are not one and the same. There must be one of four specified relationships between the defendant(s) and the enterprise: either the defendant(s) invested the proceeds of the pattern of racketeering activity into the enterprise; or the defendant(s) acquired or maintained an interest in, or control over, the enterprise through the pattern of racketeering activity; or the defendant(s) conducted or participated in the affairs of the enterprise “through” the pattern of racketeering activity; or the defendant(s) conspired to do one of the above. In essence, the enterprise is the victim of the racketeers. A civil RICO action, like many lawsuits based on federal law, can be filed in state or federal court.
Both the federal and civil components allow for the recovery of treble damages (damages in triple the amount of actual/compensatory damages).