The expanding application of the Racketeer Influenced and Corrupt Organization (RICO) Act in both criminal and civil cases, including tax fraud, has become one of the most hotly debated issues in the field of white collar crime.
Relatively broad definitions of racketeering activity have been adopted, and courts have approved pretrial orders freezing assets for later forfeiture. The rationale behind liberal interpretations of RICO is that the language of the statute itself is extremely broad and that Congress intended for the law to be applied in a wide variety of cases. The possible incursion of RICO into tax cases, however, may be contrary to congressional purposes in enacting RICO, since RICO does not identify tax fraud as a racketeering activity. Even so, in United States v. Porcelli, a RICO conviction was affirmed in a case involving a scheme to evade New York State sales taxes. Because of the forfeiture and civil implications of RICO, applying RICO in tax cases raises the possibility of RICO being used by the government to collect taxes in ways that would circumvent procedures established by Congress and the Internal Revenue Service to assess and collect Federal taxes. The use of RICO in tax cases reaches the outer limits of the law, and bringing RICO into the tax area may produce results that are not in the best interests of the government and the general public. Case law before and after Porcelli is reviewed, and steps that should be taken to ensure RICO and mail fraud do not become sources of abuse in tax cases are outlined. 48 notes
11 Ferry Lane West, Westport, CT 06880, United States
United States of America