In 1978, Congress passed the Racketeer Influenced and Corrupt Organizations Act (RICO) to help prosecutors battle organized crime. California has a similar law on its books, as well.
Before RICO took effect, prosecutors didn't have laws on their side to fight organized crime, known as "rackets." Prosecutors frequently could get convictions of only lower-ranking members of the rackets since they only carried out the orders of someone above them - the ones committing the actual crimes.
Putting those criminals behind bars was beneficial, but it was just a temporary fix. There always was someone new to take their places. The leaders of the rackets, though, were almost untouchable because it was too hard to tie them to the crimes.
Historically, rackets operated in industries that committed crimes like counterfeiting, prostitution or trafficked in sex, drugs or illegal weapons. Over time, however, organized crime evolved to encompass more white collar crimes, such as embezzlement or theft of pension plan funds. Racketeering has the potential to wipe out a company, leaving shareholders with huge losses and employees out of a job.
Now, with RICO laws, the government doesn't have to show that someone committed an illegal activity on their own. In other words, the government no longer has to prove that someone got their own hands dirty to be convicted of a crime.
Instead, the government must prove that the defendant is the owner or manager of an organization and that organization takes part in certain illegal activities on a regular basis.
The RICO Act originally was intended to prosecute organized crime rings, but since then, charges have been brought in many other instances.
Racketeering, therefore, doesn't occur just with the mob bosses who give orders from smoke-filled rooms, as we see in the movies. There are other, less obvious offenses that fall under the RICO Act. A racketeering charge is serious and requires a rigorous legal defense.