Prosecuting Criminal Enterprises: Federal Offense And Offenders
November 1993, NCJ-142524
By K Carlson P Finn, ABT Associates Inc.
Federal prosecutors have available two sets of statutes to dismantle
criminal enterprises that function like businesses. The continuing
criminal enterprise (CCE) statute (21 U.S.C. 848) targets only drug
traffickers who are responsible for long-term and elaborate
conspiracies. The antiracketeering statute (18 U.S.C. 1951-1968), which
includes the Racketeer Influenced and Corrupt Organizations Act (RICO),
targets offenders working at the top levels of various kinds of criminal
The number of prosecutions based on these statutes is relatively small
compared to those for major categories of Federal offenses such as drug
trafficking. Among persons whose cases were terminated in U.S. district
court in 1990, 996 were prosecuted using the racketeering statutes and
128 were prosecuted using CCE, while 17,135 were prosecuted for drug
trafficking using other statutes.
Conviction under most criminal enterprise statutes requires proof of
both a predicate offense and--what is generally more difficult--a
pattern or set of circumstances that connect the predicate offenses.
The importance of the criminal enterprise statutes comes from their
potential to break up associations of highly placed drug traffickers or
to incapacitate criminals who direct complex illegal activities. By
using these statutes, a U.S. attorney can obtain convictions that carry
longer sentences on average than convictions for the predicate offenses
alone. Additionally, based on overlapping jurisdiction with the States,
Federal prosecutors may agree to use the statutes to prosecute crimes
such as murder and robbery that would otherwise be State offenses only.
The main findings from an analysis of matters concluded by U.S.
attorneys and cases terminated in U.S. district courts, from mid-1987 to
mid-1990, include the following:
*In 1990, 2% of Federal offenders were convicted of racketeering or CCE
*CCE offenders constituted less than 1% of Federal drug offenders,
representing a uniquely defined set of the most serious drug
traffickers. Characteristics of these offenders, such as sentence
length and criminal history, can be most clearly observed in comparing
CCE with "other" drug cases.
*Most racketeering convictions were based either on RICO (27%) or
interstate travel in aid of racketeering (28%).
*The predicate offenses on which racketeering convictions were based
were primarily gambling offenses (21%), drug offenses (23%), and threats
and extortion (22%).
*Defendants in both racketeering and CCE cases were less likely than
other Federal defendants to plead guilty but were about as likely as
others to be convicted.
*Whether disposed by plea or trial, CCE cases took considerably longer
to resolve than other drug trafficking cases. Racketeering cases took
somewhat longer to dispose than cases that involved the corresponding
underlying offenses, and approximately 50% longer than the average for
all offenses. (Underlying offenses include all Federal offenses which
could have qualified as predicate offenses in a RICO prosecution, except
for drug trafficking, which is tabulated separately for comparison with
*Offenders convicted of racketeering were more likely to be incarcerated
than were those convicted only of underlying offenses.
*Prison sentences for both racketeering and CCE offenders were
substantially longer than those imposed on offenders convicted of the
underlying racketeering- related or drug trafficking offenses,
respectively. Ten percent of CCE offenders were sentenced to life terms,
and another 29% were sentenced to definite terms of more than 20 years.
*Fines were imposed on a quarter of CCE offenders. The average fine
exceeded $100,000, more than 7 times the average fine imposed on other
Federal racketeering statutes, first enacted in 1934 and periodically
amended, target a number of specific offenses, such as conspiracy to
obstruct, or obstruction of, interstate commerce by robbery or
extortion; travel in interstate or foreign commerce, or use of the
mails, with the intent to facilitate any unlawful activity; and any
offer, acceptance, or solicitation of bribes to influence an employee
benefit plan. Penalties include fines and imprisonment and vary by
Racketeer Influenced and Corrupt Organizations Act (RICO)
The Organized Crime Control Act of 1970 amended existing Federal
racketeering statutes to include the Racketeer Influenced and Corrupt
Organizations Act (RICO).
RICO specifically prohibits four activities: (a) investing the proceeds
of a pattern of racketeering activity (as defined below) in an
enterprise that engages in interstate or foreign commerce; (b) acquiring
or maintaining an interest in such an enterprise by means of a pattern
of racketeering activity; (c) using a pattern of racketeering activity
in conducting the affairs of such an enterprise; or (d) conspiracy to do
(a), (b), or (c).
The statute defines racketeering activity as any of 27 types of
violations of the U.S. Code and 8 types of State felonies. The 27
Federal offenses include specific types of gambling, prostitution, drug
offenses, obscenity, theft, fraud, extortion, counterfeiting, bribery,
obstruction of justice, cigarette boot-legging, and labor law
violations. State predicate crimes include murder, kidnaping, gambling,
arson, robbery, bribery, extortion, and drug offenses.
The statute defines enterprise to include any individual, partnership,
corporation, association, or other legal entity, or any group of
individuals who, though not a legal entity, are associated in fact.
The RICO statute permits fines of up to $25,000, imprisonment for up to
20 years, or both, and requires the forfeiture of ill-gotten gains and
any interest in the enterprise. The statute authorizes restraining
orders and injunctions prior to conviction to prevent the transfer of
potentially forfeitable property.
The civil provisions of RICO permit U.S. attorneys and private citizens
to sue for treble damages and the cost of the suit (including reasonable
attorney fees) if it can be shown that the plaintiff was injured in his
or her business or property and that those injuries resulted from a
pattern of racketeering activity. Many objections raised against the
RICO statute have focused on its use in civil cases, as varied as
divorce proceedings, religious disputes, and contractual disputes
between business people.
The use of the civil penalties provided by RICO is not included in this
report because private parties, not U.S. attorneys, have initiated most
of the civil cases. In the 12 months ending June 30, 1991, a total of
966 civil RICO cases had commenced in U.S. district courts. The United
States was the plaintiff in 12 of these suits.
Continuing Criminal Enterprise statute (CCE)
Although similar in purpose, the CCE statute and RICO differ
considerably. The CCE statute targets only illegal drug activity. The
statute makes it a crime to commit or conspire to commit a continuing
series of felony violations of the 1970 Drug Abuse Prevention and
Control Act when such acts are undertaken in concert with five or more
other persons. Appeals courts have ruled that a continuing "series"
means at least three related violations. For conviction under this
statute, the offender must have been an organizer, manager, or
supervisor of the continuing operation and have obtained substantial
income or resources from the drug violations.
The sentence for a first CCE conviction is a mandatory minimum 20 years'
imprisonment (with a maximum of life imprisonment), a fine of not more
than $2 million, and forfeiture of profits and any interest in the
enterprise. Anyone engaging in a continuing criminal enterprise who
intentionally kills a person or causes an intentional killing (which
actually occurs) may be sentenced to death. Probation, parole, and
suspension of the sentence are prohibited.
In calendar year 1990, U.S. attorneys investigated 2,704 suspects in
matters potentially involving violations of the racketeering statutes
and another 440 in matters where a charge of CCE was considered.
Although only 3% of the suspects in criminal matters terminated in that
year were investigated for these offenses, these matters involved some
of the most serious offenders and led to some of the most severe
sentences among all the cases terminated.
The U.S. attorneys declined to prosecute about half of the suspects in
racketeering matters. This declination rate was roughly comparable to
that for suspects investigated for the underlying offenses mentioned in
the racketeering statute. In CCE matters 85% of suspects became
defendants in Federal prosecutions (although not necessarily on CCE
charges), a prosecution rate comparable to that for other drug suspects.
Declination did not necessarily mean that no action was taken against a
suspect. About a fifth of the racketeering suspects and nearly a third
of CCE suspects whose matters were declined by U.S. attorneys were
referred to other authorities for prosecution.
Among those racketeering matters that prosecutors declined to prosecute,
45% were declined because of problems with the legal case, such as weak
evidence, jurisdictional problems, or the expiration of the statute of
limitations. Among declined CCE matters, 31% were declined for these
Another 16% of suspects in declined racketeering matters were declined
because the actions did not constitute a crime, either for a reason such
as lack of intent or from the conduct not appearing to violate a Federal
law. The remaining 20% of the racketeering declinations and 36% of the
CCE declinations occurred because of a lack of resources to prosecute,
minimum Federal interest, a policy directive in prosecutorial
guidelines, a request from another agency, or personal circumstances
such as the defendant's poor health.
The nature of criminal enterprise offenses
In 1990, 3,248 defendants in cases terminated in U.S. district courts
were charged with either racketeering or one or more of the offenses
underlying the racketeering statute. Thirty-one percent of these
defendants--996--were specifically charged with a racketeering
violation. By contrast, fewer than 1% of the over 17,000 drug
trafficking defendants in 1990 were charged under the CCE statute.
Over a 3-year period ending June 30, 1990, racketeering convictions were
based principally on charges of interstate travel in aid of racketeering
(28%) or RICO (27%). The predicate offenses on which racketeering
convictions were based were primarily gambling offenses (21%), drug
offenses (23%), and threats and extortion (22%).
Among those racketeering offenses for which a monetary loss could be
determined, the average value was $1.9 million. Racketeering charges
were significantly more likely to be brought in the Eastern U.S. than in
the West. Over a quarter (27%) of defendants in racketeering cases
terminated in 1990 were prosecuted in five judicial districts (Northern
Illinois, Southern Florida, Southern and Eastern New York, and South
Disposition of cases
Defendants in CCE and racketeering cases were much less likely to plead
guilty than were defendants charged with other drug trafficking or
underlying offenses. In 1990 among racketeering defendants, 64% pleaded
guilty; among CCE defendants, 57%; while 77% of defendants in cases
involving the underlying offenses related to racketeering and 69% of
non-CCE drug trafficking defendants pleaded guilty.
Despite the greater likelihood of CCE cases going to trial, these
defendants were more likely to be convicted than other drug trafficking
defendants (90% versus 84%).
Conviction rates for racketeering defendants were slightly lower than
for those charged with underlying offenses (81% versus 86%).
Criminal enterprise cases generally took longer to dispose than other
cases. On average, cases of CCE defendants who went to trial took
nearly twice as long from filing to disposition as cases of defendants
in other drug trafficking trials. Even guilty pleas in CCE cases took 5
months longer to dispose than pleas in other drug prosecutions.
Disposition times for racketeering defendants, however, were similar to
or slightly longer than those for defendants charged with underlying
offenses. For defendants who did not plead guilty, both groups of cases
took approximately twice as long to resolve as dispositions for
offenders convicted of crimes unrelated to enterprise offenses. Guilty
pleas in racketeering cases also took nearly twice as long as pleas for
"all other offenses" and 22% longer than for offenses underlying the
Incarceration sentences were imposed on most drug traffickers regardless
of whether the CCE statute was invoked: 98% of CCE and 91% of other
drug traffickers were sentenced to prison in 1990. Racketeering
convictions were more likely to result in prison sentences than were
convictions for underlying offense types (73% versus 61%).
In addition to sentences to prison or probation, fines were imposed on
over a third of convicted racketeering and CCE offenders. The average
fine imposed on CCE offenders exceeded $100,000, more than 7 times the
average fine imposed on other drug traffickers.
Where prison sentences were imposed, they tended to be much longer for
criminal enterprise offenders than for those convicted of comparison
offenses. Of all CCE prison sentences 10% were for life imprisonment,
and another 29% were for definite terms exceeding 20 years. By
comparison, 4% of "other" drug trafficking offenders were sentenced to
terms of more than 20 years.
Twenty-two percent of racketeering prison sentences were for 6 years or
more, compared to 10% of prison sentences for underlying offenses.
Among racketeers sentenced to prison, 10% received terms of 11 years or
more; among those sentenced to prison for underlying offenses, 4% had
terms of 11 years or more.
Characteristics of convicted offenders
Offenders convicted of CCE are nearly all male (97%), mostly white
(76%), less likely to be of Hispanic origin than other drug offenders
(19% versus 26%) and substantially older than other drug offenders (a
median age of 39 versus 31 years).
Racketeering offenders resembled those convicted of underlying offenses,
but were slightly more likely to be male, white, and older than their
The criminal records of enterprise offenders were similar to those of
their counter-parts, although CCE offenders were more than twice as
likely as other drug offenders to have served at least one term of
felony imprisonment, and were somewhat more likely to be on probation,
parole, or pretrial release at the time of arrest for the CCE violation.
Brief history of criminal enterprise statutes
Continuing Criminal Enterprise Statute (21 U.S.C. 848)
1986: Fines for first offenders increased from maximum of $100,000
to $2 million for individuals
1988: Mandatory minimum prison terms for first violations increased
from 10 to 20 years
Federal Racketeering Statutes (18 U.S.C. 1951ff.)
1934: Interference with commerce by threats or violence (Section 1951)
1961: Interstate and foreign travel in aid of racketeering (Sec. 1952)
1961: Interstate transportation of gambling paraphernalia (Sec. 1953)
1962: Offenses related to employee benefit plans (Sec. 1954)
1970: Illegal gambling businesses (Sec. 1955)
1970: RICO (Secs. 1961-68; amended to clarify or broaden scope of
prohibited activities, or adjust penalties in 1978, 1984, 1986,
1988, 1989, 1990)
1984: Use of interstate commerce facilities (including mails) in
commission of murder-for-hire (Sec. 1958)
1984: Violent crimes in aid of racketeering activities (Sec. 1959)
1986: Money laundering (Sec. 1956)
1986: Monetary transactions in property derived from specific unlawful
activity (Sec. 1957)
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