What’s racketeering?

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Racketeering is the operation of an illegal business by a structured group for profit, often associated with organized crime. It includes various criminal acts such as corruption, illegal gambling, and labor manipulation. The FBI targets labor racketeering, which affects industries and businesses related to a workforce, causing economic losses for workers, industry, and consumers. Racketeering is prosecuted under the RICO statute.

Racketeering is the act of running an illegal business or scheme (a racketeering) in order to make a profit, perpetrated by a structured group. It is a broad category of criminal acts that includes corruption, sexual exploitation of children, and illegal gambling, among many others. The practice is closely associated with organized crime, as both are carried out by gangs.

Many criminal acts can be included in this category, including theft and fraud against businesses or individuals. Governments can be racketeered by groups that counterfeit money and trade untaxed alcohol. The provision of illegal services, such as prostitution or drug trafficking, is also a form of racketeering. Racketeering also takes place among legitimate businesses or unions, where it is sometimes referred to as a white-collar crime and can include acts such as extortion and money laundering.

Criminal organizations that engage in racketeering often have legitimate businesses, such as licensed gambling establishments or garbage collection companies, in order to provide cover for their rackets. Additionally, illegal activity is often aided by bribing, blackmailing, or extorting public officials or government employees. Legitimate business owners can similarly be manipulated to help criminal groups and their practices appear legal.

While all forms are targeted by law enforcement, of particular interest to the US government is labor racketeering. The Federal Bureau of Investigation (FBI) defines labor racketeering as the manipulation of a workforce, affecting all industries and businesses related to that workgroup. Beginning in the 1950s, the FBI investigated criminal organizations, especially La Cosa Nostra or the Mafia, with union ties and learned that many of their agents are either faking or colluding with union members. These rackets extort or bribe union officials with offers of favorable contracts or settled disputes, or otherwise force them to agree to certain terms or demands. The ultimate goal is to control the health, welfare and retirement plans of union members, whose total assets usually run into several billion dollars.

Labor racketeering not only denies workers their rights, but also causes economic losses for workers, industry and consumers. The FBI has determined that this activity leads to increased labor costs, which are passed on to consumers and cost the American public millions of dollars a year. By targeting entire corrupt entities instead of replaceable individuals, racketeering is prosecuted at the federal level under the Corrupt and Racketeer-Influenced Organizations (RICO) statute.




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