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RICO: Powerful, but hard to prove

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RACINE — A complex racketeering law cited in a lawsuit recently filed against the city is one that has become increasingly used by private attorneys, former prosecutors say.

The lawsuit brought by the former owners of six shuttered bars accuses the city, and a host of local officials and organizations, of targeting their establishments and others owned or frequented by minorities in Racine.

In addition to alleging civil rights violations, the lawsuit also accuses the city, and its fellow defendants, of violating the federal Racketeering Influenced and Corrupt Organizations Act, commonly referred to as RICO, by conspiring to drive minority owned bars out of the city.

Frequently referenced in films and TV shows, the term “RICO” often conjures up images of organized crime syndicates, like the mafia or inner-city street gangs.

But it isn’t just mobsters who are hit with RICO charges or civil lawsuits.

What is RICO?

A complex, far-reaching law, RICO has started to pop up in all sorts of lawsuits, say former Assistant U.S. Attorneys Nicholas Harbist and Jimmy Gurule, not because it’s easy to prove but because it lends itself to broad application.

“You can easily construct a civil RICO case based on a few letters in the mail, a few phone calls, some text messaging. People associate (RICO) with organized crime, Tony Soprano, that type of activity. The way it’s written it can certainly be applied to a lot less serious criminal activity,” Gurule said.

To be guilty of a RICO violation you must be found to be involved in the operation and management of a group of people or organizations — an “enterprise” — and to have been part of the illegal enterprise’s commission of multiple criminal acts.

“RICO essentially prohibits individuals from using an enterprise, and operating that enterprise through a pattern of racketeering, which is essentially a pattern of certain crime,” explained Harbist, who practices law in New Jersey and Pennsylvania. “(In RICO) it is the operation of the entity, which is criminal.”

For an individual to be found guilty of violating the law they have to commit two or more of the crimes listed in the federal racketeering statute, said Gurule, a professor at Notre Dame University Law School.

The crimes also have be committed for a common purpose shared by all members of the enterprise, Gurule said.

What makes RICO such a powerful tool for plaintiffs as well as prosecutors, is that it doesn’t require every member of the enterprise to have agreed to commit a specific criminal act, Gurule said. That’s something that could be difficult to show when dealing with a diverse criminal organization where different crimes could be committed by different members.

“It says, ‘look, if you are an association, and have come together for a pattern or racketeering activity ... we can charge you with the single crime of RICO,’” he said.

Making it stick

While RICO violations are easy to allege in a civil lawsuit, they are a lot harder to make stick, say Harbist and Gurule.

“Civil RICO is very prevalent. That doesn’t mean that the cases actually go forward. Judges usually scrutinize them very carefully,” Harbist said. “If you don’t make the allegations specifically, and plead them accurately, they often get thrown out.”

To show a RICO violation, prosecutors or plaintiff attorneys have to prove there was criminal intent behind their actions, Gurule said.

There also has to be a showing of “quid pro quo” as well as the existence of a hierarchy in the enterprise, Harbist added.

“If it is an amalgamation of organizations you have to prove that it operates like an enterprise — that there is a reporting structure,” Harbist said.

Since it is often hard to find a paper trail clearly showing the intent or common goal of the illegal enterprise, prosecutors or plaintiff attorneys must often rely on the testimony of people who were involved in the enterprise, Harbist said.

“Usually you don’t put the word ‘kickback’ on the check,” he noted.

Since the law allows a civil litigant to net triple damages and legal expenses if their attorney can show that the RICO violation caused them financial harm, RICO claims can be very costly for defendants.

Often times, say Harbist and Gurule, civil RICO claims are tacked onto lawsuits purely to force a settlement.

“That could very well be where the (city’s) case might be going,” Gurule said.


RICO and the bar owners’ lawsuit against the city

RACINE — In the case of the lawsuit filed last month by minority bar owners against the city and others, attorneys for the plaintiffs have alleged that members of the Racine City Tavern League violated RICO by engaging in an illegal scheme to bankroll Mayor John Dickert’s mayoral bids — giving large, under-the-table donations to his campaign — in an effort to “buy official acts.”

According to the lawsuit, those acts included protection from scrutiny for their bars, and “the first opportunity to obtain newly available liquor licenses extorted from minority bar owners.”

“This quid pro quo relationship between Dickert and the tavern league benefited Dickert in that it furthered his campaign promise of ‘revitalizing’ and ‘cleaning up’ the Downtown area and secured him financial support,” the lawsuit states.

The suit alleges Dickert is guilty of RICO violations, because, among other acts, the suit claims he accepted the illegal campaign donations or “bribes.”

Police, current and former members of the Public Safety and Licensing Committee, and other local officials violated RICO because as part of the enterprise they “knowingly agreed or conspired to subject minority-owned bars frequented by minority owned patrons to increased scrutiny,” the lawsuit alleges.

When the lawsuit was filed Deputy City Attorney Scott Letteney issued a statement denying that the city “illegally discriminated against any person or business.”

Officials named in the lawsuit have declined to comment on the allegations, citing the pending lawsuit.

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