RICO Cases in New York Federal Court: Criminal and Civil RICO Explained

RICO is a federal law that targets crimes committed through a group or organization. Prosecutors use it to bring criminal charges, and businesses and individuals use it to sue for three times their losses. This guide explains, in plain terms, how criminal and civil RICO cases work in New York federal courts and how they are defended.

What Is RICO?

RICO stands for the Racketeer Influenced and Corrupt Organizations Act. Congress passed it in 1970 to fight the Mafia. Today it is used much more widely, including against gangs, businesses, medical clinics, financial schemes, and public officials.

In simple terms, RICO makes it a crime to:

1. use money from crimes to invest in a business or group;
2. take or keep control of a business or group through crimes;
3. run or take part in a business or group through a series of crimes (the most common charge); or
4. agree with others to do any of these.

What Must Be Proven in a RICO Case

1. An "enterprise." This is the business or group involved. It can be a real company, such as a corporation or medical practice, or an informal group of people working together toward a shared goal. It can be legal or illegal, but an informal group must have a purpose, ties between its members, and last long enough to carry out its goals.

2. "Racketeering activity." These are the specific crimes RICO covers, such as fraud by mail or email, money laundering, bribery, extortion, drug dealing, and violent crimes. Fraud through mail, email, or phone is the most common, because almost every business uses them.

3. A "pattern." At least two of those crimes within 10 years. But two is only the minimum: the crimes must be connected to each other and show ongoing activity, not a one-time event.

Criminal RICO Charges in New York

In New York, federal RICO cases are brought by the U.S. Attorney's Office in Brooklyn (covering Brooklyn, Queens, Staten Island, and Long Island) or in Manhattan (covering Manhattan, the Bronx, Westchester, and nearby counties). Prosecutors need approval from the Justice Department in Washington before filing RICO charges, so these cases usually follow long investigations by the FBI or other federal agencies.

If convicted, a person faces:

• Prison: up to 20 years for each RICO count, and in rare cases life.
• Fines: up to $250,000, or twice the money gained or lost.
• Loss of property: the government can take money, businesses, homes, and other property connected to the crimes.
• Frozen assets: prosecutors can ask the court to freeze property even before trial.

Prison sentences are calculated under federal sentencing guidelines, which consider the amount of money involved and each person's role.

Deadline to charge. RICO has no deadline of its own, so the general five-year federal limit applies. For a RICO charge, the five years run from the last racketeering act the person committed or agreed to commit, so older conduct can be included if one act falls within the five years. For RICO conspiracy, the clock starts only when the conspiracy ends, meaning its goals were achieved or abandoned. A person who clearly withdrew from the conspiracy may be able to count the five years from the date of withdrawal. When the racketeering involves bank fraud, the limit is ten years.

RICO Conspiracy

RICO conspiracy means agreeing to take part in a RICO enterprise. It is often the easiest RICO charge for prosecutors to prove. A person can be convicted even if they did not personally commit any of the crimes, as long as they agreed that others in the group would commit them. This means a bookkeeper, driver, or office employee can face the same charge as the leaders. What each person actually knew and agreed to is often the most important question in the case.

Civil RICO Lawsuits

RICO also lets a person or business sue if they lost money or property because of a RICO violation. If they win, they can recover three times their losses, plus their legal fees. That is why civil RICO is a powerful, and often feared, tool in business disputes.

What you should know about civil RICO:

• No criminal case is needed. Someone can be sued under civil RICO even if they were never charged with a crime.
• Only financial losses count. The person suing must show they lost money or property. Pain and suffering is not covered.
• The loss must be direct. The RICO violation must have directly caused the loss, and the loss must have happened in the United States.
• Fraud claims need details. The lawsuit must explain who said what, when, and how. Vague accusations are often dismissed early.
• Deadline: usually four years from when the person discovered, or should have discovered, the loss.

Common RICO Cases in New York

• Health care and Medicare/Medicaid fraud: clinics, pharmacies, and suppliers accused of kickbacks or billing for services not provided.
• No-fault insurance fraud: auto insurers frequently file civil RICO suits in Brooklyn federal court against medical practices, alleging they were secretly controlled by non-doctors or billed for unnecessary treatment.
• Financial fraud and money laundering: investment, bank, and mortgage fraud schemes built on repeated mail and wire fraud.
• Gangs, organized crime, and public corruption: violence, extortion, gambling, drug distribution, and bribery.

New York also has its own state version of RICO, enterprise corruption (Penal Law Article 460), a class B felony prosecuted in state court. One investigation can lead to federal charges, state charges, or both.

How RICO Cases Are Defended

Because RICO has many parts, each one can be challenged. Common defenses include:

• There was no real "enterprise": the people involved were not an organized group working toward a shared goal.
• There was no "pattern": the conduct was a single, short-lived event, not ongoing activity.
• The crimes were not proven: each alleged fraud or other crime must be proven, including that the person intended to cheat someone.
• The person's role was too small: a person must have helped run or direct the group's affairs, not just worked for it.
• There was no agreement: in a conspiracy case, the person did not know about or agree to the crimes.
• The case was filed too late, or, in a civil case, the lawsuit is missing required details.
• The property is not connected to any crime and should not be taken.

In criminal cases, the defense may also negotiate a plea to a lesser charge that is not RICO, which can greatly reduce the possible sentence.

When Criminal and Civil Cases Overlap

The same conduct can lead to a criminal investigation and a civil lawsuit at the same time. Anything you say or provide in the civil case can be used by prosecutors. You have the right to stay silent, but in a civil case the jury may be allowed to hold that silence against you.

A RICO case can also lead to:

• Deportation for non-citizens, because RICO is treated as a serious crime under immigration law.
• Being banned from Medicare and Medicaid after a felony health care fraud conviction.
• Loss of a professional license for doctors, pharmacists, nurses, accountants, and others.

For these reasons, the criminal, civil, and immigration sides of the case should be handled together from the start.

Talk to a New York RICO Defense Lawyer

Sharifov & Associates, PLLC represents individuals and businesses in federal RICO investigations, criminal prosecutions, and civil RICO litigation in the Eastern and Southern Districts of New York.

If you received a target letter, a grand jury subpoena, a visit from federal agents, or a civil RICO complaint, contact us before you respond: NYC 718-368-2800 · Long Island 516-505-2300 · Request a consultation

Related: Federal white-collar defense · Plea bargaining · Criminal charges and immigration

General information only, not legal advice. Prior results do not guarantee a similar outcome.