Lies the government told you by Andrew Napolitano (big screen ebook reader .TXT) 📕

an especially powerful set of statutes since it has both civil and criminal penalties. Of course, states have salivated at the prospect of seizing such powers as well, and many have passed their own state RICO laws.

By the mid-1980s, the ABA determined that over 90 percent of the private, civil RICO lawsuits were against legitimate businesses, labor unions, spouses in divorce proceedings, and heirs to wills.47 Near my farm in New Jersey, one politician has actually brought a RICO lawsuit against the local political leaders who dumped him from the party’s campaign ticket and forced him into a primary election. On the criminal side, RICO was being used mostly to bring federal charges against alleged white-collar criminals for things such as inside trading of stocks.48 RICO laws were not meant to be used in any of the aforementioned contexts, but the government has lied repeatedly through its blatant misuse of the RICO statutes.

When the federal RICO statutes were enacted in 1970, the laws were meant solely to target organized crime groups. Organized crime in America really became a problem after Prohibition-era bootlegging, so the creation of the RICO laws represented a long-awaited federal tool for prosecutors to fight mobs that often spanned many cities and states.49 In The RICO Racket, a 1989 book consisting of a collection of essays written about the misuse of the RICO statutes, then-Judge Samuel A. Alito, Jr. wrote:

The legislative history of RICO has fueled a vigorous debate about RICO’s intended scope, for while the plain meaning of the statutory language is broad, the great bulk of the discussion in the congressional committee reports and floor debates focused narrowly on the Mafia and, specifically, Mafia infiltration of legitimate business.50

The language of RICO is unnecessarily broad; but the fact that preliminary discussion of RICO centered exclusively on the Mafia demonstrates that the government has abused these laws.

The mishandling of RICO becomes particularly troubling given the potentially heavy penalties that accompany a RICO violation, which include long prison sentences, large fines, and the forfeiture of property. Many of the contract or tort claims that get brought under RICO would not have penalties nearly as severe if RICO was not invoked. In this way, the broad use of RICO fills our prisons and wastes money prosecuting things that generally would be punished with less severity under the proper state law.

Furthermore, the threat of harsh federal penalties creates further inequities in terms of the power differential between prosecutors and defendants. One Reason.com article states:

Many critics have pointed out that disparate punishment by state and federal jurisdictions for the same crime invites abuse of prosecutorial discretion at both state and federal levels. State prosecutors may use the threat of a federal prosecution as a bargaining tool to wrangle a guilty plea. Federal prosecutors may decide to prosecute only those defendants whose convictions will bring political rewards. Federal prosecutors are free to cherry-pick high-profile or politically expedient cases, knowing that the cases they reject probably will be prosecuted in state court.51

Under RICO, people are charged with racketeering (which could realistically be anything), instead of the actual crime (such as fraud, illegal gambling, etc.). William L. Anderson, an economics professor at Frostburg State University in Maryland, and one of the country’s leading authorities on abuse of the criminal law by state and federal prosecutors, points out the difference in standards the prosecutor must meet in RICO cases versus regular criminal prosecutions:

Because RICO cases are tried in federal courts, U.S. attorneys do not have to prove to juries and judges that the accused engaged in the aforementioned crimes (which as a rule are violations of state criminal law); they must show only that it appears the defendants carried on those activities. Moreover, for a RICO conviction, the prosecutor must meet only the civil standard of “preponderance of the evidence,” not the higher standard of “guilt beyond a reasonable doubt” that historically has been required for a criminal conviction.52

Moreover, many of the “crimes” being prosecuted at the federal level are plainly not federal in nature, meaning they were meant to be handled by the states. Thus, the misappropriation of RICO violates the constitutional principle of federalism and contributes to the inefficiencies of the federal court system.53

Many absurd examples of RICO’s use have arisen over the years. Professor Anderson recounted a story about his friend who was charged with racketeering under RICO. The friend’s company was raided by a federal SWAT team in 1996, despite evidence that actions taken by company employees were done in good faith and without criminal intent. Anderson explains that his friend’s assets were frozen after the SWAT team invasion, and he was therefore forced into using a public defender. Instead of taking the government’s plea bargain of four years in prison, he went through with the trial. Then in 2001, a federal judge sentenced him to ten years in prison, and all of his assets were seized.54

The federal government can also use RICO to get around statutes of limitations. If the federal government, for example, wants to prosecute someone for fraud, it must do so within five years and prove guilt beyond a reasonable doubt. If successful, the feds get jail time for the defendant and restitution from him for the harm he caused. If the feds cannot prove guilt beyond a reasonable doubt within that time, there’s a way out: They can use RICO, which has a ten-year statute of limitations and a lower standard of proof. If successful, the government can wipe out the defendant via RICO’s treble (or triple) damages provisions.

In October 2007, the United States Supreme Court refused an opportunity to address the overuse of RICO in civil lawsuits against large corporations. This refusal to address the issue came after the U.S. Chamber of Commerce’s National Chamber Litigation Center (NCLC) filed a brief asking the justices to review whether the RICO laws were being used properly in civil cases because the expansion of RICO in this capacity would “undermine business partnerships and adversely impact the economy.”55

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