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A racket, according to the current common and most general definition, is an organized criminal act in which the criminal act is some form of substantial business, or a way to earn illegal money either regularly, or briefly but repeatedly. A racket is therefore generally a repeated or continuous criminal operation. However, originally and often still specifically, a “racket” referred to a criminal act in which the perpetrator or perpetrators fraudulently offer a service to solve a nonexistent problem, a service that will not be put into effect, or a service that would not exist without the racket. Conducting a racket is racketeering. Particularly, the potential problem may be caused by the same party that offers to solve it, but that fact may be concealed, with the specific intent to engender continual patronage for this party.
The most common example of a racket is the "protection racket", which promises to protect the target business or person from dangerous individuals in the neighborhood and then either collects the money or causes damage to the business until the owner pays. The racket exists as both the problem and its solution, and it is used as a method of extortion.
However, the term "racket" has expanded in definition and may now be used less strictly to refer to any continuous or repeated illegal organized crime operation, including those that do not necessarily involve fraudulent practices. For example, "racket" may be used to refer to the "numbers racket" or the "drug racket", neither of which generally or explicitly involve fraud or deception with regard to the intended clientele.
Racketeering is most often associated with organized crime, and the term was coined by the Employers' Association of Chicago in June 1927 in a statement about the influence of organized crime in the Teamsters union.
Examples of crimes that may be alleged to be part of a pattern of racketeering activity include
- A protection racket is a form of extortion whereby racketeers offer to "protect" property from damage in exchange for a fee, while also being responsible, in part or in whole, for the property damage.
- A fencing racket is an operation specializing in the resale of stolen goods.
- A numbers racket is any unauthorized lottery or illegal gambling operation.
- Money laundering and other creative accounting practices that are misused in ways to disguise sources of illegal funds.
- Theft operations, including: burglary, home invasion, robbery, identity theft, auto theft, art theft, car hijacking, truck hijacking, organized retail crime, shoplifting, and copyright infringement (including the sale of counterfeit goods)
- Fraud and embezzlement operations, including: credit card fraud, check fraud, health care fraud, insurance fraud, mail and wire fraud, securities fraud, bank fraud, mortgage fraud, skimming (fraud), electoral fraud, confidence tricks, and bid rigging
- Murder and murder-for-hire
- Bribery and police corruption
- Organized academic dishonesty by school administrators
- Loan sharking
- Computer crimes
- Drug trafficking
- Arms trafficking
- Prostitution and commercial sexual exploitation of children
- Human trafficking
- People smuggling
- Tax evasion and cigarette smuggling
- Witness tampering and intimidation
- Skimming (casinos)
- Operating chop shops
- Illegal gambling or bookmaking, including match fixing
- Criminal operation of otherwise ostensibly legal operations, such as strip clubs, casinos, and waste management firms
- Poaching, overfishing, illegal logging, illegal construction, and illegal mining
- Dog fighting, cockfighting, and bullfighting
On October 15, 1970, the Racketeer Influenced and Corrupt Organizations Act (18 U.S.C. §§ 1961–1968), commonly referred to as the "RICO Act", became United States law. The RICO Act allowed law enforcement to charge a person or group of people with racketeering, defined as committing multiple violations of certain varieties within a ten-year period. The purpose of the RICO Act was stated as "the elimination of the infiltration of organized crime and racketeering into legitimate organizations operating in interstate commerce". S.Rep. No. 617, 91st Cong., 1st Sess. 76 (1968). However, the statute is sufficiently broad to encompass illegal activities relating to any enterprise affecting interstate or foreign commerce.
Section 1961(10) of Title 18 provides that the Attorney General of the United States may designate any department or agency to conduct investigations authorized by the RICO statute and such department or agency may use the investigative provisions of the statute or the investigative power of such department or agency otherwise conferred by law. Absent a specific designation by the Attorney General, jurisdiction to conduct investigations for violations of 18 U.S.C. § 1962 lies with the agency having jurisdiction over the violations constituting the pattern of racketeering activity listed in 18 U.S.C. § 1961.
In the US, civil racketeering laws are also used in federal and state courts.
- "Racketeering". Dictionary.com. Retrieved 2012-06-29.
- David Witwer, "'The Most Racketeer-Ridden Union in America': The Problem of Corruption in the Teamsters Union During the 1930s", in Corrupt Histories, Emmanuel Kreike and William Chester Jordan, eds., University of Rochester Press, 2004. ISBN 1-58046-173-5
- "Organized Crime and Racketeering". Usdoj.gov. Retrieved 2012-02-18.