A racket is an illegal business, usually run as part of organized crime. Engaging in a racket is called racketeering.

Several forms of racket exist. The best-known is the protection racket, in which criminals demand money from businesses in exchange for the service of "protection" against crimes that the racketeers themselves instigate if unpaid (see extortion). A second well known example is the numbers racket, a form of illegal lottery.

Traditionally, the word racket to describe a business is based on the example of the "protection racket" and indicates that the speaker believes that the business is making money by selling a solution to a problem that it created (or that it intentionally allows to continue to exist), specifically so that continuous purchases of the solution are always needed. Example: in a protection racket, a representative from the racket informs a storeowner that a fee of X dollars will be required every month for protection money, though the "protection" that is provided comes in the form of the racket itself not causing damage to the store or its employees.

The term "racketeering" was coined by the Employers' Association of Chicago in June 1927 in a statement about the influence of organized crime in the Teamsters union.

The RICO Act

main: Racketeer Influenced and Corrupt Organizations Act On October 15, 1970, the Racketeer Influenced and Corrupt Organizations Act (18 U.S.C. §§ 1961-1968), commonly referred to as the "RICO Act", became law. The RICO Act allowed law enforcement to charge a person or group with racketeering, defined as committing multiple violations of certain varieties within a 10 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 (1969). However, the statute is sufficiently broad to encompass illegal activities relating to any enterprise affecting interstate or foreign commerce. Section 1961(10) of Title 18 provides that the Attorney General 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 U.S., civil racketeering laws are also used in federal and state courts. The National Federation of Independent Business challenged these civil laws in 2006 for being excessively abusive.

References

See also

• Dixie Mafia
• Mafia
• War Is a Racket