How to Spot Racketeering in Commercial Real Estate

By Published On: September 24, 20211.9 min read

Racketeering is using illegal means to get money. The term is used to describe criminal acts that involve extortion and other illegal methods of making money. In the United States, the Racketeer Influenced and Corrupt Organizations Act (RICO) specifies the illegal acts that are considered to be racketeering. The federal crimes listed in RICO include gambling offences, fraud, bribery, money laundering, financial and economic crimes, murder for hire, sexual exploitation of children and the construction of justice or a criminal investigation.

In the United States, the Racketeer Influenced and Corrupt Organizations Act (RICO) was introduced to curb racketeering in 1970. Racketeering can be prosecuted at state and federal level.

Racketeering and Real Estate

Racketeers can target real estate fraud for four main reasons

  1. To use the property as a base for criminal operations.
  2. To profit directly from the property
  3. To launder money derived from other criminal activities
  4. To use the property as bargaining chip for extortion

Common Rackets in Real Estate

Land Transaction Fraud

Land transaction fraud usually occurs in two main forms: fraud by impersonation and fraud by forgery. In both cases, the aim is to profit from the sales or lease of property which does not belong to the racketeer.

Protection Rackets

In a protection racket, the racketeers extort money from property owners in exchange for ‘protection.’ In reality, the racketeers damage and burn the properties of people who refuse to pay the protection money. In essence people pay the racketeer to protect the property from their own destructive attacks.

Frequently Asked Questions About Racketeering

What does RICO stand for?

RICO stands for the Racketeer Influenced and Corrupt Organizations Act. I5 is a federal law that was passed by the United States government in October 1970.

What crimes are covered by the term racketeering?

Racketeering is a broad term that includes many crimes such as murder, money laundering, kidnapping, bribery, economic and financial crimes, robbery, cyber extortion, drug crimes, sexual exploitation of children, buying or selling obscene material, and more.

Any illegal money-making venture probably qualifies as a racketeering offense.

How long would I be jailed if found guilty of racketeering?

Anyone convicted of RICO crimes can be jailed for 20 years or more. Additional penalties and fines may also apply.

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