What constitutes a RICO violation?
RICO's substantive liability provisions are found in section 1962, which has four subsections labeled (a), (b), (c) and (d).
In plain English, section 1962(a) generally makes it unlawful for a person to use an enterprise to launder money generated by a pattern of racketeering activity. Lightening Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1188 (3d Cir. 1993).
Section 1962(b) makes it unlawful for a person to acquire or maintain an interest in an enterprise through a pattern of racketeering activity. Section 1962(b) is perhaps the most difficult RICO claim to express in practical terms. A stereotypical violation of section 1962(b) occurs when a victim business owner cannot make payments to a loan shark; upon default, the loan shark says: "you're either going to die or you're going to give me your business." Given the threat to this life, the victim transfers control of his business to the loan shark. Usually, the victim business owner remains the owner on paper but the loan shark controls the business and receives all income from the business. Thus, the loan shark has acquired and maintained interest or control over an enterprise (i.e. the business) through a pattern of racketeering (i.e., loan sharking and extortion).
Section 1962(d) makes it unlawful for a person to conspire to violate subsections (a), (b) or (c) of the RICO Act.
By far the most useful and common civil RICO claim is found under section 1962(c), which makes it unlawful for a person to manipulate an enterprise for purposes of engaging in, concealing, or benefiting from a pattern of racketeering activity. Given its broad utility, the general elements of a RICO claim will be discussed in the context of a section 1962(c) claim. Distinctions will then be made between section 1962(c) claims and claims under 1962(a), (b) and (d).
Section 1962(c) Claims
Section 1962(c) prohibits any defendant person from operating or managing an enterprise through a