RICO Lawyer & Attorney : Thomas Walker : Cosho Humphrey Law Firm : RICO Act, Federal and State Racketeering Litigation, Boise Idaho

RICO or the Racketeer Influenced and Corrupt Organizations Act, the federal law that allows the prosecution of criminal acts performed by individuals as part of a mob or criminal organization, is used to fight against organized crime and its adverse effects on legitimate business activities. The law states that “It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering", a statement that is easily misinterpreted by those not familiar with the intricacies of the law.

The reason for this confusion arises because, according to the rules of RICO, any individual who has been proven to belong to a criminal organization is liable for prosecution just by association. This means that if any member of said organization has been found guilty of a serious offense like murder, kidnapping, gambling, arson, robbery or bribery, other persons who are known to belong to the same organization can be prosecuted for a pattern of crimes (two or more of 8 state crimes and 16 federal crimes) that have been found to be the organization’s handiwork, even if they are not directly or indirectly responsible for the crime that the defendant has been found guilty of.

The law has been framed this way to get at the entire organization rather than just one or two members. But the ambiguity of the word “association” gets people asking the question – am I liable to be prosecuted if law enforcement officers saw me engaged in an innocent conversation with the defendant in a murder trial? Does the word association extend even to casual relationships where there is no knowledge that one person (the defendant) is engaged in illegal activities? The RICO law allows only for the prosecution of conspirators, people who have knowledge of the crime committed and have supported it in some form or the other. So while the cops do have the option of acquiring a warrant to search your home and office if they suspect you of association with a criminal organization, they cannot book you until they find proof of your involvement.

RICO violations are punishable with up to 20 years of imprisonment.

By-line:

This post was contributed by Kelly Kilpatrick, who writes on the subject of the criminal justice schools. She invites your feedback at kellykilpatrick24 at gmail dot com.

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 Melvyn Weiss, the plaintiffs’ lawyer who pioneered a controversial and lucrative area of law suing corporations on behalf of shareholders, was sentenced on June 2nd in federal court in Los Angeles to 30 months in prison. Weiss pleaded guilty in March to racketeering conspiracy in connection with his former law firm’s alleged improper payments of kickbacks to class-action clients.

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The Franchise Opportunity WebLog posted the following report on August 16, 2007:

Quizno’s might have been one of the first chains in the country to market toasted subs, but it’s the franchisees who are feeling toasted right now. A class action suit has been filed in U.S. District Court in Colorado against Quizno’s.

The class action lawsuit was announced in a press release by the Toasted Subs Franchisee Association, Inc.. Their class action lawsuit has been filed on behalf of an estimated 5,000 Quizno's franchisees across the country according to the press release. The franchisees have alleged that Quinzo’s has violated a collection of five different laws.

These charges allege that they have broken laws such as statutory and common law fraud and violated both federal and state antitrust laws. Allegations also include that Quizno's violated the Racketeer Influenced and Corrupt Organizations Act (RICO Act). Franchisees are also claiming that Quizno’s is guilty of breach of contract, along with violating Colorado’s franchise and consumer protection laws.

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Federal prosecutors announced they plan to seek a "superseding" indictment soon, meaning more charges and defendants are possible and that additional details about the case could become public. Word has it that the new indictment will include charges of violations of RICO. RICO Law Blog predicts that Vick and associates will also be facing civil RICO in the not to distant future. Although the civil RICO cases will be hard to make because of the requirement that the plaintiff suffer injury to his business or property by reason of the violations of RICO. Since betting on dog fights is illegal, the losing gamblers would not likely find a sympathetic judge’s ear in federal court.

However, much more likely, are civil RICO lawsuits against the NBA and Tim Doughty, the alleged fixer referee who may owe the Columbo family big bucks.

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The Wall Street Journal Law Blog reported this morning that --

. . . the jury in the Conrad Black trial has found the fallen media baron guilty on four of the 13 charges brought against him. He was convicted on three counts of mail fraud and one count of obstruction of justice, but the jury acquitted him of wire fraud, racketeering and several other counts.

The jury of nine men and three women delivered their verdict after deliberating 11 days following 14 weeks of testimony. Black, 62, a member of the British House of Lords, faces a maximum of 35 years in prison for the offenses the jury convicted him of, plus a maximum penalty of $1 million.

Black’s three co-defendants were all found guilty of three counts of mail fraud. They are former Hollinger International vice presidents John Boultbee, Peter Y. Atkinson and Chicago attorney Mark Kipnis.

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The Wall Street Journal Law Blog reported yesterday that Dickie Scruggs sued State Farm in federal court in Mississippi, accusing the company of engaging in a “pattern of racketeering” by manipulating engineering reports on Hurricane Katrina damage so the company could deny policyholder claims. Scruggs is already pursuing litigation against the company, but this is the first lawsuit alleging violations of the civil Racketeer Influenced Corrupt Organization Act, or RICO.  See the WSJ Blog site for a link to the 101-page complaint.

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The Journal of the American Association for Justice reported in its June 2007 issue that the Third Circuit ruled that policyholders can bring federal racketeering suits against insurers in New Jersey despite the state’s lack of provisions for private rights of action.

The decision in Weiss v. First Unum Life Ins. Co., 2007 WL 968391 (3d Cir. Apr. 3, 2007) overturned a lower court’s reverse preemption ruling and held that RICO claims are not barred by the McCarran-Ferguson Act, which prohibits any federal law that would “invalidate, impair, or supersede” state insurance law unless it specifically relates to the business of insurance.

“There is nothing in the regulatory scheme that indicates that allowing other remedies as part of its regulation of insurance would frustrate or interfere with New Jersey’s insurance regime,” Judge Marjorie Rendell wrote, concluding that RICO augments, rather than impairs, the state’s insurance law.

Richard Weiss, a former investment banker, was disabled in 2001 after a heart attack left him with permanent left ventricular dysfunction and extremely low blood pressure. He had short- and long-term disability benefits provided by First Unum through his employer at the time, Tucker Anthony Sutro. The insurer paid Weiss short-term disability benefits and then approved long-term benefits of more than $11,000 a month, but it discontinued payments after three months.

Weiss, who initially sued to recover losses under state law, added the RICO claim when First Unum moved the case to federal court, alleging that the state law claims were preempted by the Employee Retirement Income Security Act. Weiss argued that the insurer violated RICO by discontinuing his disability payments as part of its racketeering scheme to stop paying expensive claims.

The ruling expanded on the U.S. Supreme Court’s holding in Humana, Inc. v. Forsyth, in which the justices held that RICO claims would not frustrate the goals of Nevada’s insurance law. (525 U.S. 299 (1999).) The defense argued that unlike in Nevada, New Jersey insurance law neither allows a statutory private right of action for nonpayment of benefits nor specifically makes punitive damages available in these cases.

But the Third Circuit found that the remedies established in the state’s Insurance Trade Practices Act (ITPA) “are not intended to be exclusive.”

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