Since its enactment in 1970, the federal RICO statute1 has generated thousands of published opinions, hundreds of law review articles and at least a dozen treatises and specialized publications. A parallel development, beginning in 1972, has been the enactment of RICO-based statutes by 33 states, the Commonwealth of Puerto Rico and the Territory of the United States Virgin Islands. These statutes cover a broad spectrum of civil and criminal law, including forfeiture.
These statutes are less well understood than their federal counterpart. One reason may be the labels that are sometimes attached to them. State RICO statutes are frequently referred to by nicknames such as “little RICO” or “baby RICO.” These diminutives are inaccurate both in the sense that they suggest that state RICO statutes are mere analogs of federal RICO and because they suggest that state RICO statutes are necessarily less comprehensive or effective than federal RICO. None of the state RICO states are exact duplicates of federal RICO and many are significantly broader in scope than the federal statute.2 Set forth below are a few examples of important distinctions between state RICO statutes and their federal counterpart that make close examination of state RICO statutes useful and necessary:
- Many state RICO statutes have significantly broader civil and criminal applications than the federal statute, incorporating an array of state law offenses that are outside the scope of the federal statute.
- Many state RICO statutes have longer periods of limitation than the federal statute.
- Many state RICO statutes have fewer essential elements than the federal statute and those essential elements are often easier to establish than their federal counterparts.
- Many state RICO statutes allow the recovery of a broader range of damages in civil actions, such as damages for personal injury and punitive damages, than is available under the federal statute.
- Many state RICO statutes specifically authorize equitable relief for private parties that may not be available under the federal statute.
- Although federal criminal RICO prosecutions must receive prior approval from the Organized Crime and Racketeering Section of the Department of Justice, in most states RICO prosecutions can be initiated without centralized review, often by any district attorney.
- State RICO actions may be subject to defenses, including state constitutional arguments that are not available under federal RICO.
- Some state courts are showing a willingness to recognize both the substantial differences between many state RICO statutes and the federal statute and that state RICO statutes frequently have more in common with each other than they do with the federal statute.
- Restrictive amendments to the federal RICO statute, such as the de facto elimination of securities fraud as a predicate act, have little or no effect upon state RICO statutes.
- More state RICO statutes will probably be enacted. For example, Nebraska enacted a statute in 2009 and the Illinois House of Representatives passed HB 1907, the Illinois Street Gang and Racketeer Influenced and Corrupt Organizations Law in 2010.
Many state RICO statutes present a triple threat, providing for civil liability, criminal liability, and forfeiture. Given the difficulty of litigating civil claims under the federal RICO statute in many circuits, attorneys continue to consider state RICO claims as alternatives or supplements to claims under the federal RICO statute. The passage of the Private Securities Litigation Reform Act of 1995,3 which bars private federal RICO actions based upon conduct that would have been actionable as fraud in the purchase or sale of securities (unless the defendant has been criminally convicted in connection with the fraud), has accelerated this shift to the use of state RICO statutes in some jurisdictions. At the same time, defense counsel are developing new arguments based upon state statutes and state constitutions, as well as advancing arguments that, although rejected by some federal courts, may find acceptance in state RICO litigation.
Most state RICO statutes are first and foremost criminal statutes and the same language that creates broad potential civil liability under these statutes usually defines the scope of potential criminal liability. As with federal RICO, the increase in certain kinds of criminal behavior, ranging from identity theft and mortgage fraud to human trafficking and terrorism have led to the expansion of existing RICO statutes and the enactment of new ones. The proliferation of criminal gangs has similarly led to the adoption of anti-gang statutes based upon RICO concepts. Hopefully this book will help facilitate the more effective use of these statutes.
Most state RICO statutes also contain forfeiture provisions. Whether a particular RICO statute provides for forfeiture to take place in a civil or criminal proceeding, those proceedings will frequently involve the rights not only of the state and the title holder to real or personal property, but also the rights of third parties such as lien holders, lessors, subsequent purchasers of real and personal property, and plaintiffs in private civil actions whose judgments may be affected if forfeiture occurs.
This book provides an overview of federal RICO, emphasizing certain key issues of importance to litigation under state RICO statutes. The text of the federal statute appears at the end of Chapter 1. Each state RICO statute is then addressed separately, with the text of the state statute appearing at the end of each respective chapter.
While any particular state's statute can be understood by reviewing the chapter on that state in conjunction with Chapter One, the reader should be aware that many state RICO statutes are more similar to other state statutes than they are to the federal statute.
Because unpublished opinions often provide useful insights into the analysis utilized by various courts, many such opinions have been included in the text of this book. The reader should, of course, fully comply with any applicable rules restricting the citation of unpublished opinions in pleadings.
The research contained in this book is current through at least September 30, 2010.
1. RICO is an acronym for the federal Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq., which was enacted as Title IX of the Organized Crime Control Act of 1970.
2. See Michael P. Kenny and H. Suzanne Smith, A Comprehensive Analysis of Georgia RICO, 9 GA. ST. U.L. REV. 537, 538 n.9 (1993), Donald C. Ligorio, Ohio's Pattern of Corrupt Activities Law: Ohio Revised Code Sections 2923.31–.36, 17 U. DAYTON L REV. 279, 280 n. 7 (1991).
3. P.L. 104–67, Dec. 22, 1995.