Sunday, February 20, 2005

RICO - Who is an Outsider?

A recent Seventh Circuit decision, United States v. Cummings, highlights a key limit to the RICO statute. 

For starters this is wonderful case to learn what skip tracing is and the role these individuals serve in finding debtors. The case notes that "Although skip tracing is not necessarily illegal, some skip tracers stray across the line in their efforts to track down  their quarry."

The reversal here is upon a failure by the government to follow the mandates of the case of Reves v. Ernst & Young. Reves clearly holds that one must "conduct or participate" in the "operation or management" of the enterprise. The only exception provided in the case is when the "enterprise might be operated or managed by others associated with the enterprise who exert control over it as, for example, by bribery."  As the accused was an "outsider," the court in the Cummings decision reversed.

For more on how this limitation to RICO operates, see White Collar Crime: Law and Practice, 2nd ed. by Israel, Podgor, Borman & Henning.


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