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What is a RICO Enterprise?

 

RICO’s definition of enterprise broadly encompasses many types of enterprises, ranging from legal entities, to association-in-fact enterprises consisting of highly organized groups to loosely associated groups of individuals and entities.  Usually there is little difficulty in proving the existence of a legal entity enterprise based on documents. Examples of legal entity enterprises are governmental offices or departments created by statute, regulation or ordinance, and corporations or limited partnerships which are created by a governing articles of incorporation or partnership agreement. RICO enterprises can also be an association-in-fact of legal entities.

Association-in-Fact Enterprises

Finding an association-in-fact enterprise is generally governed by Supreme Court law. In United States v. Turkette, 452 U.S. 576, 583 (1981), the Court explicitly held that the enterprise element and the pattern of racketeering element are separate elements and that an association-in-fact enterprise can be proved by evidence of an ongoing organization, formal or informal, and that the various associates function as a continuing unit in furtherance of a common purpose. In Boyle v. United States, 556 U.S. 938, 945-948 (2009), the Court resolved a split in the circuits regarding the issue of whether the RICO enterprise must have a hierarchical structure beyond what was necessary to perpetrate the predicate crimes. The Court in Boyle held that such “ascertainable structure” was not a requirement, but rather an association-in-fact enterprise “must have at least three structural features: a purpose, relationships among those associated with the enterprise, and longevity sufficient to permit these associates to pursue the enterprise’s purpose. Boyle, at 946. The Court in Boyle reaffirmed its position in Turkette that the evidence used to prove enterprise and pattern may in particular cases coalesce and that “proof of a pattern of racketeering activity may be sufficient in a particular case to permit a jury to infer the existence of an association-in-fact enterprise.” Id., at 947.

As a result, the typical proof of an enterprise would come from documents, witness testimony, and an examination of what the group does. It is noted that the enterprise itself must be engaged in, or its activities affect, interstate or foreign commerce.  Proof of this element is usually derived from what the enterprise does.

For more on RICO law, please click here.