441 lines
24 KiB
Plaintext
441 lines
24 KiB
Plaintext
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Racketeering Influenced Corrupt Organizations (RICO) Law
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Title 18 USCS 1961 et seq, Racketeering Influenced Corrupt Organization
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(RICO) law covers just about all criminal acts that are profit-oriented and
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are repetitious. ("Proof of a "pattern of racketeering activity" defined by
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this law [Title 18: 1961 et seq] requires showing at least two separate
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instances of "racketeering activity.")
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When you can, use RICO for prosecution of lawbreakers. It has advantages
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that other laws may not have, such as the very wide range of fines and
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forfeitures possible, including confiscating the "fruits of criminal
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activity" from those convicted of racketeering offenses.
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"Racketeering" used to mean any business of related criminal activity
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operated like a business, such as those often operated by the Mafia. It has
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now been expanded by most state laws to include any felony violation that
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involves money as the motive and the offenses are repetitious in nature.
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Examples are: robbery, bribery, fraud (cons and scams), and other felonies
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where victims lose their money or valuable possessions. The exception
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being personal crimes not committed for profit: homicide, rape, auto theft
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for joyriding, poaching, arson, and other crimes which do not by themselves
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have financial gain as the primary motive. If there's a profit involved in
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a felony, RICO laws (criminal and/or civil) can probably be used to take
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all of the accumulated profit away from the lawbreaker. Your reward(s) are
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a negotiated percentage of the fines and forfeitures.
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The Law
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Title 18 USCS 1962 (Racketeering)
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"Prohibited Activities
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(a) It shall be unlawful for any person who has received any income
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derived, directly or indirectly, from a pattern of racketeering activity or
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through collection of an unlawful debt in which such person has partici-
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pated as a principal within the meaning of section 2, title 18, United
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States Code (18 USCS Section 2), to use or invest, directly or indirectly,
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any part of such income, or the proceeds of such income, in acquisition of
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any interest in, or the establishment or operations of, any enterprise
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which it engages in, or the activities of which affect, interstate or
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foreign commerce. A purchase of securities on the open market for purposes
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of investment, and without the intention of controlling or participating in
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the control of the issuer, or of assisting another to do so, shall not be
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unlawful under this subsection if the securities of the issuer held by the
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purchaser, the members of his immediate family, and his other accomplices
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in any pattern or racketeering activity or the collection of an unlawful
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debt after such purchase do not amount in the aggregate to one percent of
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the outstanding securities of any one class, and do not confer, either in
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law or in fact, the power to elect one or more directors of the issuer.
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(b) It shall be unlawful for any person through a pattern of racketeering
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activity or through collection of unlawful debt to acquire or maintain,
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directly or indirectly, any interest in or control of any enterprise which
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is engaged in, or the activities of which may affect, interstate or foreign
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commerce.
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(c) It shall be unlawful for any person employed by or associated with any
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enterprise engaged in, or the activities of which affect, interstate or
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foreign commerce, to conduct or participate, directly or indirectly, in the
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conduct of such enterprise's affairs through a pattern of racketeering
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activity or collection of unlawful debt.
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(d) It shall be unlawful for any person to conspire to violate any of the
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provisions or subsections (a), (b), or (c) of this section."
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Title 18 USCS 1963 Criminal Penalties
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(a) Whoever violates any provision of section 1962 of this chapter (18 USCS
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1962 et seq.) shall be fined not more than $25,000 or imprisoned not more
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than 20 years, or both, and shall forfeit to the United States (1) any
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interest he has acquired or maintained in violation of section 1962 and (2)
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any interest in, security of, claim against, or property or contractual
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right of any kind affording a source of influence over, any enterprise
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which he has established, operated, controlled, conducted or participated
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in the conduct of, in violation of section 1962.
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(b) In any action brought by the United States under this section, the
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district courts of the United States shall have jurisdiction to enter such
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restraining orders or prohibitions, or to take such other actions,
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including, but not limited to, the acceptance of satisfactory performance
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bonds, in connection with any property or other interest subject to
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forfeiture under this section, as it shall deem proper.
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(c) Upon conviction of a person under this section, the court shall
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authorize the Attorney General to seize all property or other interest
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declared forfeited under this section upon such terms and conditions as the
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court shall deem proper. If a property right or other interest is not
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exercisable or transferable for value by the United States, it shall
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expire, and shall not revert to the convicted person. All provisions of law
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relating to the disposition of property, or the proceeds from the sale
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thereof, or the remission or mitigation of forfeitures for violation of the
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customs laws, and the compromise of claims and the award of compensation to
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informers in respect of such forfeitures shall apply to forfeitures
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incurred, or alleged to have been incurred, under the provisions of this
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section, insofar as applicable and not inconsistent with the provisions
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hereof. Such duties as respect to the disposition of property under the
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customs laws shall be performed under this chapter by the Attorney General.
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The United States shall dispose of all such property as soon as commer-
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cially feasible, making due provisions for the rights of innocent persons."
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* * * * * *
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RICO law doesn't provide a stated reward for information "leading to the
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conviction", but the above clause "and the award of compensation to
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informers ..." implies that rewards are available and can be negotiated.
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The important thing is, there's no upper limit restriction. Your percentage
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can be up to 50% of the forfeitures, as it is in many other laws. It
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depends on the information you provide, personal involvement and risk, and
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the amount of control you have of the case. Control is the most important!
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When fines and forfeitures are available, a percentage (usually 50%) is
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awarded to the person providing essential information, and the remainder or
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other half is paid to the law enforcement agency who made the arrest and
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prosecuted the case.
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Law enforcement agencies compete with each other like football teams. Each
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agency wants the credit for the prosecution as well as 50 percent of the
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fines and forfeitures. That's why they usually don't share information with
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each other, which is detrimental to law enforcement generally. The flip
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side is, when you have control, you are in a good position to negotiate
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rewards. Each major law enforcement agency will want the case. If they
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agree to 50% of forfeitures plus federal rewards, they still get the other
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50 percent of the forfeitures. If they are too tight-fisted, they get
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nothing! They know that. Always ask for 50 percent of forfeitures, plus
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maximum rewards. Give it to the highest bidder. That's businesslike.
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RICO Civil Suits
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RICO civil suits are mentioned in "The Litigation Explosion", The obscure
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mail and wire fraud statute can be included when defendants use national
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advertising to encourage use of their product. That includes the big
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players with deep pockets and liability insurance.
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CrimeFighters can legally demand access to personal and business financial
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records of the defendant to determine his financial status. The unlimited
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access to personal and business financial records often makes reluctant
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defendants cave in and want to settle out of court. That means you don't
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have to hunt or dig for the information. You can, under civil suits, simply
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demand it from the defendant.
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When can you use RICO? The answer is mentioned in Olson's book:
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"According to an A.B.A. (American Bar Association) study, more than 90
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percent of the targets of civil-RICO lawsuits have no connection whatsoever
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with organized crime. Nearly half of RICO suits rely solely on mail or wire
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fraud charges, and another third rely on at least primarily on securities
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fraud charges. By now, lawyers have deployed civil RICO in divorces, will
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contests, and landlord-tenant disputes; against abortion protesters and
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others demonstrating on the streets for their political beliefs; and of
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course, in countless straight money suits over commercial disagreements."
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State Laws
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Most state RICO laws may be listed under the heading of organized crime and
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fraud. Most state RICO laws now include all felonies primarily motivated
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for financial gain. As an example, Arizona's RICO laws list a few defini-
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tions of racketeering. I'll mention a few of them because they apply to
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other states that have similar RICO laws. The wording might be slightly
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different from state to state but the intent and definitions are the same.
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Arizona's Definitions
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"Extortionate extension of credit" means any extension of credit [lending
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money] with respect to which it is the understanding of the creditor and
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the debtor at the time such extension is made that delay in making repay-
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ment or failure to make repayment could result in the use of violence or
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other criminal means to cause harm to the person, reputation or property
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of any person. [loansharking]
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"Traffic" means to sell, transfer, distribute, dispense or otherwise
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dispose of stolen property to another person, or to buy, receive, possess
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or obtain control of stolen property, with intent to sell, transfer,
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distribute, dispense or otherwise dispose of to another person.
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[trafficking in stolen property]
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"Criminal syndicate" means any combination of persons or enterprises
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engaging, or having the purpose of engaging, on a continuing basis, in the
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conduct which violates any one or more provisions of any felony statute of
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this state. Drug dealing networks are included.
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"Combination" means persons who collaborate in carrying on or furthering
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the activities or purposes of a criminal syndicate even though such persons
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may not know each other's identity or membership in the combination changes
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from time to time or one or more members may stand in a wholesaler-retailer
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or other arm's length relationship with others as to activities or dealings
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between or among themselves in an illicit operation.
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"Enterprise" means any corporation, partnership, association, labor union,
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or other legal entity or any group of persons associated in fact although
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not a legal entity.
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"Control", in relation to an enterprise, means the possession of sufficient
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means to permit substantial direction over the affairs of an enterprise
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and, in relation to property, means to acquire or possess.
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"Racketeering" means any act, including any preparatory or completed
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offenses, committed for financial gain, which is chargeable or indictable
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under the laws of the state in which the act occurred and, if the act
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occurred in a state other than this state, would be chargeable or
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indictable under the laws of this state had the act occurred in this state
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and punishable by imprisonment for more than one year, regardless of
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whether such act is charged or indicted, involving:
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(a) Homicide
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(b) Robbery
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(c) Kidnapping
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(d) Forgery
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(e) Theft
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(f) Bribery
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(g) Gambling
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(h) Ursury
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(i) Extortion
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(j) Extortionate extension of credit
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(k) Prohibited drugs, marijuana or other prohibited chemicals or substances
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(l) Trafficking in explosives, weapons or stolen property
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(m) Leading organized crime
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(n) Obstructing or hindering criminal investigations or prosecution
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(o) Asserting false claims including, but not limited to, false claims
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asserted through fraud or arson
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(p) False statements or publications concerning land for sale or lease or
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sale of subdivided lands or sale and mortgaging of unsubdivided lands
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(q) Resale of realty with intent to defraud
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(r) Fraud in the purchase or sale of securities
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(s) Sale of unregistered securities by unregistered dealers or salesmen
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(t) A scheme or artiface to defraud [cons, scams, pyramid schemes]
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(u) Obscenity
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(v) Child pornography
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(w) Prostitution
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(x) Restraint of trade or commerce
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(y) Terrorism
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(z) Money laundering
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(aa) Obscene or indecent telephone communications to minors for commercial
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purposes.
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* * * * * *
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RICO laws cover almost every crime for profit. But that doesn't mean RICO
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must be used when there are other laws available for prosecution. Examine
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all applicable laws to determine which provides the maximum rewards for
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CrimeFighters. As a CrimeFighter prosecutor, you can choose which laws to
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use, and which law enforcement agency to negotiate with.
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* * * * * *
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A forerunner to RICO, presumably to control drug dealing (it's listed under
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Food and Drug laws) is called "Continuing Criminal Enterprises." While CCE
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has been more or less replaced by RICO, it's still on the books. Title 21
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USCS 886 provides for rewards up to $25,000. CCE is similar to RICO in
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wording and intent, but the unusual feature of this law is it's possible
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sentences of life imprisonment for ringleaders which can not be suspended
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and probation is prohibited. If monetary rewards are not your main concern,
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but harsh punishment is, CCE may be used instead of RICO.
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The Law
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Title 21 USCS 848 Continuing Criminal Enterprise
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(a) Penalties; Forfeitures. (1) Any person who engages in a continuing
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criminal enterprise shall be sentenced to a term of imprisonment which may
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not be less than 10 years and which may be up to life imprisonment, to a
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fine of not more than $100,000, and to the forfeiture prescribed in para-
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graph (2); except that if any person engages in such activity after one or
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more prior convictions of him under this section have become final, he
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shall be sentenced to a term of imprisonment which may not be less than 20
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years and which may be up to life imprisonment, to a fine of not more than
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$200,000, and to the forfeiture prescribed in paragraph (2).
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(2) Any person who is convicted under paragraph (1) of engaging in a
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continuing criminal enterprise shall forfeit to the United States--
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(A) the profits obtained by him in such enterprise, and
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(B) any of his interest in, claim against, or property or contractual
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rights of any kind according a source of influence over, such enterprise
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if:
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(1) he violates any provision of this title or title III the punishment for
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which is a felony, and
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(2) such violation is a part of a continuing series of violations of this
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title or title III, and:
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(A) which are undertaken by such person in concert with five or more other
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persons with respect to whom such person occupies a position of organizer,
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a supervisory position, or any other position of management, and
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(B) from which such person obtains substantial income or resources.
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(c) Suspension of Sentence and Probation Prohibited. In the case of any
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sentence imposed under this section, imposition or execution of such
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sentence shall not be suspended, probation shall not be granted, and
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section 4202 of title 18 of the United States Code and the Act of July 15,
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1932 (D.C. Code, secs. 24-203-24-207), shall not apply.
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(d) Jurisdiction of Courts. The district courts of the United Sates
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(including courts in the territories or possessions of the United States
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having jurisdiction under subsection (a)) shall have jurisdiction to enter
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such restraining orders or prohibition, or to take such other actions,
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including the acceptance of satisfactory performance bond, in connection
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with any property or other interest subject to forfeiture under this
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section, as they deem proper.
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(October 27, 1970
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* * * * * *
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If RICO is used, it has a provision to pay CrimeFighters a negotiated share
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in the forfeitures involved. The practice now is to lump all assets, cash
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and bank accounts into a forfeiture process rather than impose fines and go
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through a separate collection process. Forfeiture under RICO usually means
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they take everything they can lay their hands on that can be related to the
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offense.
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Most states will have a similar list of offenses covered by their RICO
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laws. The exception being those activities permitted by law such as
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gambling and prostitution in a few counties in Nevada, for example.
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Most criminals who have been successful have expensive cars, jewelry, bank
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accounts, real estate, stocks and bonds, savings accounts, and other items
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of value which can be forfeited as fruits of criminal activity if they
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can't prove it was paid for with honest money.
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Expansion of State RICO Laws
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Two years ago, the Texas State prosecutor brought suit to seize a house
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owned by a man and a woman arrested on drug dealing charges. Under state
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laws existing then, it was difficult to prove that the house had been
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purchased with the profits derived solely from drug dealing activity. The
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state turned the prosecution of the case over to Federal authorities who
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have RICO and other laws at their disposal to seize drug-related property.
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That solved that particular problem, but it prompted Texas lawmaker Dan
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Morales of San Antonio to pass a new Texas law that would make it easier to
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remove the "ill-gotten gains" from criminals, whether drug related or not.
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The San Antonio Express-News ran a story on April 15, 1991, with the
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headlines: "D.A. tripling asset grabs in felonies." The essence of the
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story is that a new Texas law was passed on October 18, 1990, allows the
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Texas State prosecutor to legally seize property used in the commission of
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all first and second degree felonies. Until this new State law was
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implemented it was possible to seize property used only in illegal drug
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deals. The new law expands the number of seizures possible, in effect
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tripling the number of forfeitures by including a larger number of felony
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violations.
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The new law defines contraband used in commission of felonies as "property
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of any nature, including real, personal, tangible or intangible."
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It also includes any personally owned items such as cash and bank accounts,
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guns, jewelry, vehicles, furniture, businesses, and stocks and bonds. While
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the courts often seize exotic pets and horses as part of the fines and
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forfeitures, the Texas prosecutor wasn't interested in anything that
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"eats." But, he is interested in anything and everything of value if it's
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connected to the commission of the crime, or considered as the fruits of
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illegal activity, as defined by law.
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Most States have adopted similar RICO laws which have been expanded in
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their scope and coverage to include virtually all illegal activity. For
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example, the recent Arizona sting operations involving crooked politicians
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who accepted bribes have been prosecuted under Arizona's RICO laws.
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Hidden Assets
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The courts are well aware of the tricks used by crooks to hide their
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assets. The most common one is buying a car, boat, airplane, or condominium
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in a friend's or relative's name. Another ploy is selling an asset already
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owned to someone who is under their control or influence. The amount of the
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sale price is usually an amount much less than the fair market value ("$1
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and other considerations", for example). The court will investigate. The
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legal owners will be required to show proof of where they obtained the
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money to make the purchase. If it's proven to be a sham transaction the
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court will seize the assets.
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The court might discover that a friend, for example, has no job, no money,
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and no inheritance to put up the money. In most cases the friend is usually
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dependent on the lawbreaker. If he or she can't provide proof of legal
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purchase, it will be considered a sham transaction to frustrate the court
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(like creditors in bankruptcy actions). The sham transaction will be swept
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aside as though it doesn't exist. The courts refer to the second person as
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a "strawman" -- one who is without real substance.
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If you find your suspect has a lot of assets, but they're in someone else's
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name, keep that in mind. They are still vulnerable. All you have to do (as
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prosecutor) is to "lean" on the strawmen. Advise them if they don't confess
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now, they will be called as a witnesses and forced to testify under oath.
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If they lie, and it's proven they lied, they will be guilty of perjury,
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which is a felony punishable by stiff sentences. If they tell the truth
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right away, you can promise they will escape punishment. In most cases
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that's all that's required to get a signed statement.
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* * * * * *
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RICO Civil Suits
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Title 18 USCS 1964
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"(a) The district courts of the United States shall have jurisdiction to
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prevent and restrain violations of sections 1962 of this chapter [18 USCS
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1962] by issuing appropriate orders, including but not limited to: ordering
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any person to divest himself of any interest, direct or indirect, in any
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enterprise; imposing reasonable restrictions on the future activities or
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investments of any person, including, but not limited to, prohibiting any
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person from engaging in the same type of endeavor as the enterprise engaged
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in, the activities of which affect interstate or foreign commerce; or
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ordering dissolution or reorganization of any enterprise, making due
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provision for the rights of innocent persons.
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(b) The Attorney General may institute proceedings under this section. In
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any action brought by the United States under this section, the court shall
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proceed as soon as practicable to the hearing and determination thereof.
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Pending final determination thereof, the court may at any time enter such
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restraining order or prohibitions, or take such other actions, including
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acceptance of satisfactory performance bonds, as it shall deem proper.
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(c) Any person injured in his business or property by reason of a violation
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of section 1962 of this chapter [18 USCS 1962] may sue therefore in any
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appropriate United States district court and shall recover threefold the
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damages he sustains and the cost of the suit, including a reasonable
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attorney's fee.
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(d) A final judgment or decree rendered in favor of the United States in
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any criminal proceeding brought by the United States under this chapter [18
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USCS 1962 et seq] shall estop the defendant from denying the essential
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allegations of the criminal offense in any subsequent civil proceeding
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brought by the United States."
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* * * * * *
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Clause (c) is important to victims of RICO related crimes. "Any person" may
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sue the lawbreaker in a private suit for THREE times the damages to his
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business or property. Instead of a ordinary civil suit to be reimbursed for
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actual damages, crime victims should use this law to obtain three times the
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business or property damages. (In addition, an "injured party" could also
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file personal damage lawsuits in a separate suit. Triple damages probably
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doesn't apply in CrimeFighter lawsuits for personal damages, although it
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might!) A RICO civil suit should be initiated as soon as possible to lay
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claim to the defendant's assets before they are forfeited in the pending
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criminal action.
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Clause (d) means if a conviction is obtained, or a guilty plea is entered,
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the defendant has no legal defense as to the summary judgment that may be
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obtained in a civil suit.
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As you read the other laws that pay rewards, compare them with RICO for
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effectiveness to maximize your rewards.
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F9 for next Chapter
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