A racket, according to the current common and most general definition, is an organized criminal act or activity in which the criminal act or activity is some form of substantial business, or a way to earn illegal money either regularly, or briefly but repeatedly. A racket is therefore generally a repeated or continuous organized criminal operation or enterprise. Conducting a racket is racketeering. However, according to the original and more specific definition, a racket or racketeering usually involves extortion or criminal coercion. Originally and often still specifically, a "racket" referred to a criminal act in which the perpetrator or perpetrators fraudulently offer a service that will not be put into effect, a service to solve a nonexistent problem, or to solve a problem that would not exist without the racket. Particularly, the potential problem may be caused by the same party that offers to solve it, but that fact may be concealed, with the specific intent to engender continual patronage for this party. The traditional and most common example of a racket is the "protection racket", which promises to protect the target business or person from dangerous individuals in the neighborhood and then either collects the money or causes damage to the business until the owner pays. The racket exists as both the problem and its solution, and it is used as a method of extortion. However, the term "racket" has expanded in definition over time and may now be used less strictly to refer to any continuous or repeated illegal organized crime operation, including those that do not necessarily involve fraudulent practices or extortion. For example, "racket" may refer to the "numbers racket" or the "drug racket", neither of which generally involve extortion, fraud, or deception with regard to the intended clientele. Racketeering is most 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. Specifically, a racket was defined by this coinage as being a service, such as protection which calls forth its own demand, and would not have been needed otherwise.
Examples
Examples of crimes that may be alleged to be part of a pattern of racketeering activity include
A protection racket is a form of extortion whereby racketeers offer to "protect" property from damage in exchange for a fee, while also being responsible, in part or in whole, for the property damage.
On October 15, 1970, the Racketeer Influenced and Corrupt Organizations Act, 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. However, the statute is sufficiently broad to encompass illegal activities relating to any enterprise affecting interstate or foreign commerce. Section 1961 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 US, civil racketeering laws are also used in federal and state courts.
