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A racket is a service that is fraudulently offered to solve a problem, such as for a problem that does not exist, that will not be put into effect, or that would not otherwise exist if the racket did not exist. Conducting a racket is racketeering. Particularly, the potential problem may be caused by the same party that offers to solve it, although 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." The racket itself promises to protect the target business or person from dangerous individuals in the neighborhood; then either collects their money or causes the damages to the business until the owner pays. The racket exists as both the problem and its solution and is used as a method of extortion.
Racketeering is 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.
Various examples of common racketeering activities include, but are not limited to:
- Protection racket: 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.
- Fencing racket: whereby stolen goods are (indirectly) sold back to their original owner.
- Numbers racket: An unauthorised lottery or illegal gambling operation
- Money laundering and other creative accounting practices that are misused to disguise illegal sources of funds.
- Academic dishonesty of any kind, especially extreme cases, such as in the Atlanta Public Schools cheating scandal
- Loan sharking: Distribution of unregulated and "under-the-table" loans given on terms which are unlikely to ever be paid back
- Cheque fraud ("paper hanging")
- Check kiting
- Insurance fraud
- Drug trafficking
- Human trafficking
- People smuggling
- Tax evasion
- Arms trafficking
- Truck hijacking
- Car hijacking
- Cigarette smuggling
- Mail and wire fraud
- Securities fraud
- Mortgage fraud
- Witness tampering
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 U.S., 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
- "Racketeering: Organized Criminal Activities". Lawyers.com. Retrieved 3 November 2016.
- "Organized Crime and Racketeering". Usdoj.gov. Retrieved 2012-02-18.