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What is Racketeering?

Racketeering is a serious crime involving the operation of an illegal business for personal profit. Often linked to organized crime, it includes activities like extortion, money laundering, and fraud. By manipulating legitimate businesses or creating illicit schemes, racketeers exploit both systems and individuals. Uncover the intricate web of racketeering and its impact on society—how deep does the rabbit hole go?
J. Dellaporta
J. Dellaporta

Racketeering is the act of operating an illegal business or scheme (a racket) in order to make a profit, perpetrated by a structured group. It is a broad category of criminal acts that includes bribery, sexual exploitation of children, and illegal gambling, among many others. The practice is closely associated with organized crime, since both are conducted by groups.

Many criminal acts can be included in this category, including theft and fraud against businesses or individuals. Governments can be victimized by racketeering by groups that counterfeit money and trade in untaxed alcohol. Providing illegal services, such as prostitution or drug trafficking, are also a form of racket. Racketeering also takes place among legitimate businesses or labor unions, where it is sometimes referred to as white-collar crime, and can include acts such as extortion and money laundering.

Racketeering is closely associated with organized crime.
Racketeering is closely associated with organized crime.

The criminal organizations that engage in racketeering often have legitimate businesses, like licensed gaming establishments or garbage collection companies, in order to provide cover for their rackets. In addition, the illegal business is often aided by the bribing, blackmailing, or extortion of public officials or civil servants. Legitimate business owners can be similarly manipulated in order to help criminal groups and their practices to appear lawful.

Racketeering is often referred to as a white-collar crime.
Racketeering is often referred to as a white-collar crime.

While all forms are targeted by law enforcement agencies, of particular concern to the United States government is labor racketeering. The Federal Bureau of Investigation (FBI) defines labor racketeering as the manipulation of a labor force, which affects all industries and businesses related to that labor group. Beginning in the 1950s, the FBI has investigated criminal organizations, especially La Cosa Nostra or the Mafia, with labor union ties and learned that many of their operatives pose as or are in collusion with union members. These racketeers extort union officials or bribe them with offers of favorable contracts or settled disputes, or otherwise coerce them to accept certain terms or demands. The ultimate goal is the control of health, welfare, and pension plans of union members, the total assets of which usually amount to several billion dollars.

Counterfeiting is a common crime for those charged with racketeering.
Counterfeiting is a common crime for those charged with racketeering.

Labor racketeering not only denies laborers their rights, but also results in economic loss to workers, the industry, and consumers. The FBI has determined that this activity leads to increased labor costs, which are passed on to consumers and cost the American public millions of dollars annually. To target entire corrupt entities instead of replaceable individuals, racketeering is federally prosecuted under the Racketeer Influenced and Corrupt Organizations (RICO) statute.

Frequently Asked Questions

What exactly is racketeering?

Casinos have been used as the base of operations for a number of racketeering schemes in the past.
Casinos have been used as the base of operations for a number of racketeering schemes in the past.

Racketeering refers to the act of operating an illegal business or scheme (a racket) to make a profit, frequently as part of organized crime. It often involves a range of criminal activities, including bribery, extortion, money laundering, loan sharking, and obstruction of justice. The term gained prominence with the passage of the Racketeer Influenced and Corrupt Organizations Act (RICO) in 1970, which aimed to combat organized crime in the United States by allowing extended penalties for those involved in such operations.

How does the RICO Act combat racketeering?

The RICO Act combats racketeering by providing a powerful legal tool to prosecute individuals involved in long-term criminal enterprises. It allows for the leaders of a syndicate to be tried for the crimes they ordered others to do or assisted them in doing, closing a loophole that previously allowed many to evade prosecution. Under RICO, it's not necessary to prove the individual committed the criminal act, only that they were part of the enterprise that did. Convictions can result in severe penalties, including up to 20 years in prison per racketeering count, forfeiture of assets, and significant financial penalties.

What are some common examples of racketeering activities?

Common examples of racketeering activities include illegal gambling operations, drug trafficking, human trafficking, arms smuggling, counterfeiting, embezzlement, and fraud. These activities are often interconnected, forming a complex web that constitutes an organized criminal enterprise. For instance, a racketeering operation might launder money from drug trafficking through a legitimate business to obscure the illegal origin of the funds.

Can racketeering charges be applied to legitimate businesses?

Yes, racketeering charges can be applied to legitimate businesses if they are used as a front for illegal activity or if the business's operations involve ongoing criminal behavior. For example, if a company is found to be systematically engaging in wire fraud, mail fraud, or any other criminal activity as defined by the RICO Act, it can face racketeering charges. This application of the law underscores its broad reach and the seriousness with which the government treats such offenses.

What is the impact of racketeering on society?

Racketeering has a profound impact on society, as it often involves large-scale criminal operations that can corrupt public institutions, destabilize economies, and harm communities. The economic cost is significant; for instance, the FBI estimates that the total cost of insurance fraud (excluding health insurance) is more than $40 billion per year, which can translate to increased premiums for consumers. Moreover, racketeering can contribute to a sense of lawlessness and undermine trust in the legal and economic systems designed to protect citizens.

For more detailed information on the impact of insurance fraud on the economy, you can visit the FBI's official website at https://www.fbi.gov/stats-services/publications/insurance-fraud.

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Discussion Comments


I had two MRI's done at University Hospital, Saskatoon, Saskatchewan, Canada in 2006 and 2010. Both times the radiologist has stated "no reason for pain found."

In 2012, I obtained my 2010 MRI and sent it for a second opinion to a USA Board Certified radiologist. His diagnosis was multiple herniated discs, multiple annular disc tears, facet injury and spinal stenosis.

In 2010, I was sent to an ortho specialist who didn't even lay a finger on me, yet wrote a report to workers compensation that he palpated me and could not find a reason for my pain.

The doctor is a liar, and has even admitted he never laid a finger on me, yet workers compensation denied me any medical help which was requested on my behalf.

I called every lawyer in three cities, but all refused to take a worker's compensation case. How can an injured worker get treatment when doctors lie?

In Canada, especially Saskatchewan, whenever there is significant injury and insurance interests, be it workers comp or auto accident, everything and anything is done to prevent timely diagnosis and timely medical care;

Saskatchewan Canada is home to medical legal insurance fraud and racketeering;

God help you if you are injured in Saskatchewan Canada, because doctors are paid to deny diagnosis and treatment. How is it even possible to misdiagnose lumbar herniated discs, or annular disc tears which are easily seen?


I recently suffered a work injury in mid March that is still undiagnosed. I have been referred to a specialist, but the soonest appointment is in June. I was given pain killers and sent on my way. It's easy to understand why people get addicted to prescription drugs with this kind of system.

I am unable to file for short term disability or workman's comp without a diagnosis. My company's insurance requires the claim be completed within 30 days, but my health care insurance company takes 30 days just to release my medical records to start the claim.

In the meantime I cannot work, I am not getting paid, I have to pay out of pocket to maintain my existing medical benefits and I'm in a world of pain. I don't believe sitting at home going broke on medical bills and doped up on pain pills is an acceptable solution. I started seeing a chiropractor who thinks he can help me, but I am about to lose my apartment and will have to move home with my parents. I am 36 and have been independent since age 19. Also unacceptable.

I just want a doctor to fix me so I can return to my life. It certainly feels like something criminal is at work here. Interesting article. I can relate.


FBI needs to investigate the merchant cash advance industry, particularly, the NAAMA Association, which is a group of cash advance providers- which is an unregulated industry, giving money to small businesses at rates of .30 cents to .60 cents on the dollar with 4-8 month repayment terms. It is an industry littered with dirty brokers, and, influenced by the funders/investors themselves to seek out brokers to source new business. rapid advance, first funds, merchant cash group, etc, etc are all part of this industry


i am on long term disability through met life. one of the requirements was to sign up for social security disability insurance. if i am awarded ssdi i have to repay met life for all monies i received during my wait for ssdi. racketeering, i think so.


1. A state agency hires an attorney to negotiate a labor contract with a union.

2. The negotiator pushes the union to a strike.

3. As a result of the strike, the agency contracts out work to a private contractor.

4. It turns out that the negotiator is an employee of one of the private contractors that got the work from the agency.

5. The agency mistakenly overpaid the private contractor employing the negotiator.

Could this be racketeering?


Ohio is one of the worst. In a 14 year case, meds were taken away 61 times with no due process and this is OK with the Ohio government.

Workers compensation boards all across the USA and Canada use medical legal fraud and racketeering to deny timely diagnosis and treatment for work injuries suffered on the job.

Medical doctors are getting rich stating "No reason for pain found," only to cripple the injured worker and starve them back to work undiagnosed on narcotic medications.

Canada was the testing ground for this. Everyone who has heard that Canada has such a wonderful medical system should rethink that. Beware, injured workers.


Workers compensation boards all across the USA and Canada use medical legal fraud and racketeering to deny timely diagnosis and treatment for work injuries suffered on the job.

Medical doctors are getting rich stating "No reason for pain found," only to cripple the injured worker and starve them back to work undiagnosed on narcotic medications.

Canada was the testing ground for this. Everyone who has heard that Canada has such a wonderful medical system should rethink that. Beware, injured workers.


I was one of those children taken away from abusive and neglectful parents, placed in state custody and was more abused and neglected there than when I was with my parents. --Grown up now


There is something vastly going wrong today in America as far as children and finances are concerned.

I'm searching for ways I can shine some light on this increasing issue in America where a man has little rights in Family Court. I have begun to look at this as a racket by the US government, trapping men by threatening their freedom if they don't pay child support, yet the understanding in Family Court is “what’s best for the child.”

I'm a hard working professional father who has been put in a losing position because of a federal law and a vindictive woman. In a nutshell, I have a child with a woman who tried to extort me for money saying that if I don’t give her X amount of dollars I cannot see my son.

I explained to her that I will not pay her the asked amount because I have other children who need things also. Knowing I will take care of my son to the best of my ability I opened a case with Family Court pursuing visitation/custody.

Needless to say I was beaten by the system and ordered to pay an excessive amount in child support. The judge did not adjudicate the case in thoroughness because he did not ask the proper questions, like, I never told her or the judge that I will not financially take care of my son.

He never asked her why she took my son and hid him from me for 10 months? He never asked her anything about what she was doing, but pursued me unshakably.

I explained to the judge that I should not have to pay child support because I have no problem with taking care of my child - he did not hear that. Since the case I have not seen my son and I still don’t know where he lives, and it was in the order that I know this information.

If I took it back to court the judge still will not do anything for me or my case. Now I’m looked at as a deadbeat dad, on the verge of losing my freedom and livelihood all because of a law that enables vindictive women to ruin the lives of good men like me.


Why doesn't this law fall under government action against people who owe the state back child support from welfare.

The government has laws call “Debtors Prison” on the books but still threatens to and will throw you in jail.

You can owe the mother nothing and still be forced to pay the State, not the Government, money that the US taxpayers paid to the US government. But the state will waste just as much in trying to collect it from you by throwing you in jail.

Nine months will cost you taxpayers $21,000 to feed and house and medicate one man who owes less than that.

The person the state calls the non-custodial parent will never be asked if he or she could care for the child before the bill could even be totaled. No consideration at all if the other person could do it without the state's help.

Now the rule of racketeering comes into play to re-collect the money that the US government passed out to residents of the States.

By attacking the non-custodial parent to regain potential income for the state, many life restrictions fell into play. Credit, job, driving, taxes, can't afford to feed their main families, all the way to killings. If it's not themselves, it's the mother or child.

This should not be happening. And you can help by stopping this action with me. And my family.


If racketeering is against the law why haven't former "president" Chimpy McFlightsuit and his sidekick Deadeye Dick Cheney been brought up on charges of fraud and intimidation in getting the United States citizenry to believe the crap about the non-existence of weapons of mass deception in Iraqnam?


It all comes down to this: all law enforcement agencies -- even the prison systems -- fall under the wing of the Justice Department. make too loud of a noise and you could find yourself investigated.


After my son was tried and found guilty I started wondering, is California part of the USA? Not being familiar with our justice system at all, I started watching and learning the differences of each state. Then I realized how the outcome of trials are often in the control of the prosecutor and judge. Since my son went to prison in California ten years ago, I have learned the corrections officers are unionized and have a lot of power in California. There was an article in a Tennessee newspaper saying they have new prisons and are basically recruiting prisoners from other states. The CO's in CA responded this would be taking bread out of their families' mouths. The prisons in CA are way over crowded. We're talking 200 to 300 percent. The prisoners are not getting good food, medical care, visits from loved ones, etc. due to the cost of employing more COs. After learning all this I found out my son's prosecutor was found guilty of manipulating a jury and fired after 30 years. He also was found guilty in Northern California's 9th District court. Wonder how many this one man sent to prison that don't belong there? Also, what the family orders for the quarterly package comes from the company store for about three times more. The prison takes 55.5 percent of all money sent to the prisoners. I have often mentioned this seems like racketeering to me. Someone from CA mentioned to me that the governor said in his acceptance speech there needed to be something done about CO's union power.This was quickly put aside. If this is so profitable for them how many more prisons can they build. What will happen when more people are locked up than not? Not to mention there will be a CA culture of X prisoners and the far reaching effect. It will take generations for this to correct itself. Why hasn't this gone to the U.S. Supreme Court as racketeering?


I completely agree with ScatterBrain. Congress is in collusion with the environmental groups, unions, lobbyists and the main stream media. They are perpetuating fraud against the American people and should be charged with racketeering. Where is a legal firm or national organization with the backbone to file a national class action suit against them on behalf of the American public?


I am a firm believer that the government should be charged with racketeering due to the fact they are taking our hard earned money from us the taxpayer and giving it to companies (GM, Chrysler, the banks, etc...) and then telling them who to fire and hire. Is this not a form of racketeering? So does the RICO act include charging our government?


If a Rhodesian Ridgeback dog club fixes the price, commits illegal acts to keep breeders who sell puppies under their established price from breeding and act like an organized group for that purpose, is that racketeering?


It seems to me that many government agencies are racketeering these days. The police auctions are trouble. The fix is in at motor vehicle in my state and most likely other places. The insurance companies seem be doing this also. Health insurance dictates which drugs a doctor offers his patients. This reflects from the lobbists in DC.

They are very powerful special interests. The FEMA disaster coverage is diverted from ordinary people who are victims of the storms. The list goes on.

The fox is in the henhouse and the chickens have come home to roost.


If a corporation uses as its "corporate attorney" a partner of a law firm who repeatedly does not resolve cases and funnels these cases to his firm, is this considered a form of racketeering? He basically is stirring up trouble with employees of the corporation to further his business interest in the firm.


There is this guy in our area who hands out business cards that say he handles investments and does financial and estate planning. The truth is that he is not a certified financial planner and his sole investment is insurance annuities, thus he is really an insurance sales man. I know of several people where he has convinced them to invest the vast majority of their money in these annuities (obviously he receives commission for this) along with recommending specific real estate purchases by the same developer within the same community - he even helps them find mortgage brokers. These folks are suspecting that he was getting kick backs from one of the realtors involved or perhaps the developer. Because he has misrepresented the true nature of his services his recommendations were not viewed as a sales pitch, and there appears to be a repeated pattern to this activity due to the number of people involved. So the question is - does this constitute racketeering or have any laws been violated?


It is also a county business as jail beds are filled with bogus and erroneous police reports. The state of California pays $200 or more per bed in each cell (per day) according to a Correctional Officer at Fresno County Jail.


If racketeering is illegal, then why does the government pay children protective services to take children from parents? This "legal activity" was signed by ex pres William Clinton; if children protective services, of any state, takes a child from parent's home, goes to court with fictitious statements to keep child in foster home, holds child in foster home for over 15 months (if child remains in foster home for duration of 15 months, child must be adopted by foster parents or someone else qualified to adopt child), and children protective services (a branch of our federal government, as well as state) earns such bonuses, for example, the amount of 5000 when a child is in a foster home for 15 months, and additional 2000 when a child is adopted by foster parent.

What the heck has to happen before someone looks into the illegal activities of our county courts and find that our children are actually being used for our states to obtain money (bonuses) from the government...

I cannot believe that an attorney (and not a very good one) in the form of a "president of the united states" (Bill Clinton), can be so blinded to sign a bill to continue giving states the incentive to take children from parents (most times, under false pretense!) to "earn" bonuses (money) from government. (Again, they take parents to court and lie under oath, claiming that parent is abusive or neglectful of child, without any "proof," and this is done in a civil court called "family court." What should have been done: abuse or neglect of child should have been labeled a "criminal act," not loosely defined in statutes under "welfare of children!")

This is called "racketeering" in a business sense, how can our government get away with this????

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    • Racketeering is closely associated with organized crime.
      By: tiero
      Racketeering is closely associated with organized crime.
    • Racketeering is often referred to as a white-collar crime.
      By: Michael Flippo
      Racketeering is often referred to as a white-collar crime.
    • Counterfeiting is a common crime for those charged with racketeering.
      By: Africa Studio
      Counterfeiting is a common crime for those charged with racketeering.
    • Casinos have been used as the base of operations for a number of racketeering schemes in the past.
      By: Vojtech Vlk
      Casinos have been used as the base of operations for a number of racketeering schemes in the past.