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.
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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.
Examples
Various examples of common racketeering activities include, but are not limited to:
RICO Act
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.