The Racketeer Influenced and Corrupt Organization Act has been referred to as “the litigation equivalent of a thermonuclear device.” Miranda v Ponce Fed. Bank, 948 F.2d 41 (1st Cir. 1991). While the legislation, passed in 1970, is widely understood to be an effective tool for criminal prosecutors to combat commercial criminal enterprises, civil RICO claims advanced under the private attorney general theory have armed plaintiff attorneys with a potent weapon in their litigation arsenal. Specifically, civil RICO actions mandate an award of treble damages and reasonable attorney fees to the prevailing party. 18 U.S.C. §1964(c). The treble damages are distinct from punitive damages recovery. Consequently, civil practitioners representing clients in disputes involving general business misconduct with schemes to defraud should familiarize themselves with the basic elements of civil RICO.

RICO Background

Title 18 U.S.C. §1962 sets forth the prohibited conduct giving rise to RICO claims. Most plaintiffs’ attorneys rely on §1962(c) as the substantive basis for establishing liability under RICO. Subsection (c) provides as follows: “It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt.” The RICO plaintiff must establish (1) conduct (2) of an enterprise (3) through a pattern of racketeering in order to recover under 18 U.S.C. §1962(c). Sedima, S.P.R.L. v Imrex Co., 105 S.Ct. 3275 (1985).

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