One of the reasons RICO is a powerful law for plaintiffs is its conspiracy provision. The typical pattern of racketeering activity is not perpetrated by a single person. Modern financial crimes require the cooperation of others be they office subordinates, co-owners of business entities, marketing departments who publicize fraudulent claims, etc. Can any one person act alone in perpetrating any complex scheme to defraud? It’s very unlikely.
One way of prosecuting a civil RICO case is to sue the business entity that employs the alleged racketeers. This is often difficult because in order to bring a civil RICO case, the racketeer needs to be using an enterprise. Enterprises involving corporate crimes simply do not exist in many cases. The corporation is not committing its crimes through a larger enterprise. Rather, the better way to view the case is to focus on the individuals who actually commit the racketeering acts. Many lawyers will not want to sue these people. They prefer to sue the corporation. I disagree with this traditional way of thinking about liability.
Suing individuals is very likely just as effective in obtaining damages as suing the corporation. Any rational corporation will indemnify its high-level employees and pay for their defense. It would be devastating for the company to have a responsible person admit to carrying out corporate crime on behalf of higher ups. This just shifts responsibility onto the higher ups. It also opens up the company to more litigation brought by other potential plaintiffs who choose to sue for their damages under traditional common law remedies.
Suing co-conspirators can result in the company having to hire separate counsel for each defendant and may therefore increase the cost and burden on the defense, always a consideration in the length of time and the price of settlement of major litigation.
But the most significant factor to be achieved in suing individual conspirators personally instead of a corporation is it focuses liability on those who are most directly responsible, which is the aim of civil RICO. If RICO really is a unique law dedicated to eliminating racketeering activity, as the Supreme Court has said time and again, then liability should not be vicariously imposed on an innocent entity or the victim of the racketeering activity. When criminal acts are committed in the name of a corporation, it may well be a victim of the racketeer, i.e., used as a front to protect the criminal. The corporation should not be sued unless it is, through affirmative acts of its management, acquiescing in the racketeering. A mid-level employee might not be able to act for the company. Where executives do affirmatively enter into criminal schemes, their acts do bind the company. But when that happens, why shield the executives by suing the corporation, which simply gives them the anonymity they crave? They deserve to be named personally.
In short, I’m an advocate of uing RICO aggressively against every person that has approved of the racketeering activity and bringing their misdeeds out into the open. The tendency of most plaintiffs’ lawyers to seek “deep pockets,” a corporate defendant, ignores the reality of how businesses handle major litigation and is inconsistent with the purpose of RICO.