When federal investigators accuse a company of violating the Racketeer Influenced and Corrupt Organizations Act (RICO), the situation can be confusing and overwhelming. Knowing the basics can help executives make smart decisions during these tough times.
Understanding “enterprise”
In RICO cases, an “enterprise” is not just a criminal group. It can include regular business activities, partnerships or subsidiaries. Even legitimate businesses can face scrutiny as RICO enterprises if they engage in illegal activities.
The pattern of illegal activities
RICO requires proof of at least two illegal acts within ten years. In business, this might involve activities such as electronic communications, financial transactions or securities dealings. These become RICO issues if there is fraudulent intent. Meaning, someone intended to deceive or cheat.
Interstate business
RICO cases often involve interstate business, which is easy to meet in today’s global market. Most big companies deal with interstate or international transactions, making them subject to RICO laws.
Consequences and costs
The stakes are extraordinarily high in RICO cases. Civil cases can lead to triple damages, costing companies significant financial burdens. Criminal cases, on the other hand, can result in heavy fines and prison time, affecting company value and stability.
Addressing RICO investigations
For executives, understanding these elements is crucial for building a strong defense. Many find it helpful to work with law firms experienced in RICO cases. Being informed and proactive can help protect the company and ensure its future success.