A “racket” is an illegal process or organization and “racketeering” is furthering or participating in a racket. The Office of the Inspector General is a government agency responsible for conducting investigations and audits on grantees and contractors that deal with the government. In other words, the agency is to contractors as the Internal Revenue Service (IRS) is to the American taxpayer. The Office of the Inspector General defines “labor racketeering” as “the infiltration, domination, and/or use of a union or employee benefit plan for personal benefit by illegal, violent, or fraudulent means.” The DOL’s OIG claimed $397.8 million from organizations whose practices were deemed illegal in the fiscal year 2012.
The OIG’s definition of labor racketeering encompasses an array of practices that violate many criminal statutes. Among these practices are white collar crimes such as extortion, embezzlement, loan sharking and fraud, and violent crimes such as assault or making a threat. Historically, the Mafia, also known as La Cosa Nostra, has been charged numerous times with labor racketeering, extortion, and union embezzlement, among other charges. However, in recent years, organizations from Russia, Asia and Africa have reportedly engaged in kinds of unforeseen labor racketeering involving complex fraud, immigration fraud and unemployment insurance fraud.
In March, a high-profile Newark-based criminal defense lawyer was convicted of murder and racketeering, among his 23 total charges. The attorney rose to prominence as the defense attorney for rap star Lil’ Kim as well as U.S. soldiers in Iraq. The FBI stated the attorney racketeered through his firm by scheming to tamper with witnesses, traffic drugs, prostitution and organize prostitution. The attorney faces a mandatory life sentence for three of his charges and a sentence of up to life for another charge.
In March, the OIG assisted in a federal investigation in Maine that led to two brothers pleading guilty to document fraud and harboring undocumented aliens. The brothers owned a chain of Mexican restaurants that employed illegal Mexican workers. The brothers may serve up to 10 years in prison and pay up to $250,000.
In February, a New Jersey man was sentenced to four and a half years in federal prison after being convicted of racketeering involving gambling and theft from an employee benefit plan. The man, a “made” member of the Philadelphia La Cosa Nostra organization, was said to have aided the organization by creating a phantom employee position within a bookmaking organization. As a “no show” employee, the man received health benefits without working for the company.