Sunday, April 3, 2011

Continuing RICO Defense Practice


Protecting individuals from the state and the legal rights owed to a person before convicting them of a crime is called “due process,” according to the Fifth Amendment of the United States Constitution. This is important because there are times when civil attorneys try to manipulate and stretch current laws simply to get more money for their clients. It is imperative that the defendant have an attorney that understands when this is occurring and can counter such claims in a legal forum. The RICO Act is no exception, and it has, in fact, been transformed and used creatively by civil lawyers to gain enormous amounts of money for them and their clients.

The RICO Act

The Racketeer Influenced and Corrupt Organizations (RICO) Act was passed by congress in 1970— Title 18, United States Code, Sections 1961-1968. Simply put, the RICO Act was put in place to destroy mafia influence over business and to eliminate its ill-affects of on the nation’s economy. RICO was written in broad terms. To state a claim, a plaintiff must allege four elements: (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity. Each element of a RICO claim requires additional analysis: an “enterprise” is marked by association and control; a “pattern” requires a showing of “continuity”—continuous and related behavior that amounts to, or poses a threat of, continued criminal violations; and “racketeering activity” involves the violation of designated federal laws.

Throughout most of the 1970s, the Act was strictly used against the mafia and civil claims under RICO were simply non existent. However, in the 1980s, civil lawyers began noticing section 1964(c) of the RICO Act, which allows civil claims to be brought by any person injured in their business or property by reason of a RICO violation. Any person who succeeded in establishing a civil RICO claim would automatically receive judgment in the amount of three-times their actual damages and would be awarded their costs and attorneys’ fees. Most of this was brought about by Congress’ broad application of RICO; with its inclusion of mail and wire fraud as two crimes upon which a RICO claim could be brought.

Most civil lawyers got wind of this by the late 1980s, and it became one of the most commonly declared claims in federal court. Any time a civil claim included common law fraud, product defect, and breach of contract as criminal wrongdoing it would enable the filing of a civil RICO claim. Throughout the next two generations, the United States Supreme Court has been busy slowly modifying and limiting civil RICO claims by strictly applying concepts of “proximate causation.” Today, RICO is almost never applied to the mafia, but instead it is applied to individuals, businesses, political protest groups, and terrorist organizations.

Civil RICO claims against businesses can be enormously costly to them. Any business that has this claim waged against them will need a law firm that specializes in defending RICO claims, and they will pay handsomely for that defense; as the costs of losing a civil RICO case are much higher than most civil decisions. Having said this, it would be more cost-beneficial for the firm to retain this section of its practice as the numbers clearly show that the RICO defense division is as profitable as any other.


RICO claims have gone through a complete transformation. They have evolved from an Act that was instituted to fight organized crime—specifically, the mafia—to not be used against the mafia at all today. With so much at stake for businesses in litigation against RICO claims, it is beneficial for firms specializing in RICO law to remain an active part of their firm. It is important to continue the RICO defense divisions for several reasons. First, it’s already a specialty of lawyers at the firm. Second, it can be determined on a case-by-case basis whether it is beneficial to the firm to take a case. Finally, there are no shortages of civil RICO cases filed, and companies will pay big money to defend against such claims.

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