The Racketeer Influenced and Corrupt Organizations (RICO) Act is a United States federal law that provides for extended criminal penalties and a civil cause of action for acts performed as part of an enterprise that engages in a pattern of racketeering activity. The RICO Act was passed in 1970 to strengthen the legal tools in evidence gathering by establishing new penal prohibitions and providing enhanced sanctions and new remedies for dealing with the unlawful activities of those engaged in organized crime. Prior to the enactment of the RICO Act, prosecutors only had the ability to individually try crime that was mob-related. The RICO Act gave prosecutors the ability to take down the whole criminal organization at once.

A violation of RICO occurs when a person, in connection with an enterprise, engages in a pattern of racketeering activity. Racketeering activity includes crimes such as bribery, extortion, money laundering, and wire fraud. The power of RICO lies in its conspiracy provision, based on an enterprise rationale, that allows tying together apparently unrelated crimes with a common objective into a prosecutable pattern of racketeering. In addition, RICO provides for severer penalties and permits a defendant to be convicted and separately punished for both the underlying crimes that constitute the pattern of racketeering activity and for a substantive violation of RICO.

RICO also permits a private individual "damaged in his business or property" by a "racketeer" to file a civil suit. The plaintiff must prove the existence of an "enterprise." The defendant(s) are not the enterprise; in other words, the defendant(s) and the enterprise are not one and the same. A civil RICO action can be filed in state or federal court. Both the criminal and the civil components allow the recovery of treble damages (triple the amount of actual/compensatory damages) .

In summary, the RICO Act is a federal law that provides for extended criminal penalties and a civil cause of action for acts performed as part of an enterprise that engages in a pattern of racketeering activity. It allows prosecutors to take down the whole criminal organization at once and provides for severer penalties and permits a defendant to be convicted and separately punished for both the underlying crimes that constitute the pattern of racketeering activity and for a substantive violation of RICO.