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The language of the Racketeer Influenced and Corrupt Organizations Act gives no obvious indication that a civil action can proceed only after a criminal conviction. The word "conviction" does not appear in any relevant portion of the statute. To the contrary, the predicate acts involve conduct that is "chargeable" or "indictable," and "offenses" that are "punishable, " under various criminal statutes. 18 U.S.C.S. § 1961(1). As defined in the statute, racketeering activity consists not of acts for which the defendant has been convicted, but of acts for which he could be.
The Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U. S. C. §§ 1961-1968, which is directed at "racketeering activity" -- defined in § 1961(1) to encompass, inter alia, acts "indictable" under specific federal criminal provisions, including mail and wire fraud -- provides in § 1964(c) for a private civil action to recover treble damages by any person injured in his business or property "by reason of a violation of section 1962." Section 1962(c) prohibits conducting or participating in the conduct of an enterprise "through a pattern of racketeering activity." Petitioner corporation, which had entered into a joint business venture with respondent company and which believed that it was being cheated by alleged overbilling, filed suit in Federal District Court, asserting, inter alia, RICO claims against respondent company and two of its officers (also respondents) under § 1964(c) for alleged violations of § 1962(c), based on predicate acts of mail and wire fraud. The court dismissed the RICO counts for failure to state a claim. The Court of Appeals affirmed, holding that under § 1964(c) a RICO plaintiff must allege a "racketeering injury" -- an injury "caused by an activity which RICO was designed to deter," not just an injury occurring as a result of the predicate acts themselves -- and that the complaint was also defective for not alleging that respondents had been convicted of the predicate acts of mail and wire fraud, or of a RICO violation.
Did RICO private action under 18 USCS 1964(c) require either distinct racketeering injury or prior conviction of defendant?
The court concluded that based on the statutory language and legislative history, RICO imposed no distinct "racketeering injury" requirement and that the racketeering activity prohibited by the statute consisted not of acts for which respondent had been convicted, but of acts for which it could have been convicted.