What is Racketeering
Racketeering refers to the act of engaging in illegal activities to earn profits and control markets. Examples include fraud, extortion, bribery, embezzlement, and loan sharking (there is a more detailed list later in this article).
The Connecticut General Assembly quotes the US Racketeer Influenced and Corrupt Organizations Act (RICO), which has the following definition of racketeering:
“RICO defines ‘racketeering activity’ as a long list of state and federal crimes. The federal crimes include bribery, various fraud offenses, gambling offenses, money laundering, a number of financial and economic crimes, obstructing justice or a criminal investigation, murder for hire, and sexual exploitation of children.”
“The state crimes include murder, kidnapping, gambling, arson, robbery, bribery, extortion, dealing in obscene matters, and drug crimes.”
Brief history – the concept of racketeering
The concept gained widespread attention in the United States with the enactment of RICO in 1970. This law was designed to combat organized crime groups that used illegal methods to monopolize markets and intimidate competition.
When we hear the term racketeering, we think of mobsters and gang members. However, it can involve any person, group of people, or organization that uses criminal methods for financial gain.
Examples of racketeering
Below are some examples of racketeering and their meanings:
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Bribery
Offering, giving, receiving, or soliciting something of value to influence the actions of an official or other person in charge of a public or legal duty.
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Extortion
Obtaining money, property, or services from a person or entity, through coercion.
Wrongful or criminal deception intended to result in financial or personal gain.
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Embezzlement
Theft or misappropriation of funds placed in one’s trust or belonging to one’s employer.
The process of making large amounts of money generated by a criminal activity, such as drug trafficking or terrorist funding, appear to be earned legally.
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Illegal Gambling
Conducting, financing, managing, supervising, directing, or owning all or part of an illegal gambling business.
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Loan Sharking
Offering loans at extremely high interest rates, often with the threat of violence for non-repayment.
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Obstruction of Justice
Interfering with the orderly administration of law and justice, such as tampering with witnesses, jurors, or evidence.
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Counterfeiting
Producing a copy of an item, without authorization, intending to deceive or defraud by passing the copy as genuine.
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Trafficking
Illegal trade or dealing in goods, often drugs, arms, or human beings, for the purpose of exploitation.
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Cybercrime
Criminal activities carried out by means of computers or the internet, including hacking and the dissemination of viruses.
The fraudulent acquisition and use of a person’s private identifying information, usually for financial gain.
Racketeering, a racket, and a racketeer
A “racket” describes a specific type of criminal activity or scheme, such as extortion or fraud.
“Racketeering,” meanwhile, refers to the act of engaging in those activities, especially as part of a broader pattern or as part of an organized crime group. Racketeering indicates involvement in or the operation of rackets, typically in a sustained or organized manner.
The person who is involved in racketeering or running a racket is a “racketeer.”
A global phenomenon
Racketeering exists all over the world. Its impact on society is profound. It undermines the local economy, corrupts public officials, scares people, and erodes public trust in institutions.
By monopolizing sectors of the economy, racketeers can inflate prices and decrease the quality of goods and services in the marketplace.
Three Videos
These three educational YouTube videos come from our sister channel, Marketing Business Network. They explain what the terms “Obstruction of Justice”, “Loan Shark”, and “Money Laundering” mean using easy-to-understand language and examples:
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What is Obstruction of Justice?
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What is a Loan Shark?
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What is Money Laundering?