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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.
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.
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.
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?
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.