Thursday, April 11, 2013

Everything you wanted to know about RICO

Posted By on Thu, Apr 11, 2013 at 2:05 PM

Former Atlanta Public Schools Superintendent Beverly Hall
You probably don't know the Racketeer Influenced Corruption Organization Act. Or, as it's known by its friends, RICO.

If you do, you think it's only used to put away mobsters. But as we saw from the recent indictments of former Atlanta Public Schools Superintendent Beverly Hall and 34 other administrators, principals, and teachers allegedly involved in the cheating scandal, it's not.

So why is Fulton County District Attorney Paul Howard using RICO to go after the men and women named in the indictments? Here are four theories:

1. Stiffer punishments: In a mafia-type criminal enterprise - and you can decide if APS meets the definition - you have a boss, capo, bagmen and all the rest. The boss never gets his or her hands dirty and never conducts the actual work of the criminal organization, whether that means drug running or, as has been alleged in this case, test cheating. He or she is insulated from the nefarious misdeeds and criminal acts.

Note that none of the 35 APS defendants are charged with cheating. They are predominately charged with false swearing (verbal lying, based on lying to investigators) and false signing (written lying, generally certifying test results). Each of those two offenses carries a punishment of between one and five years in prison and a $1,000 fine.

To take down an alleged boss (in this case, Hall, who made $580,000 during the period in question), that just won't do.

Enter RICO (suavely). RICO's minimum jail time is five years, maxing out at 20. And its fine is $25,000. That's much more appropriate for a high-profile financial crime, which APS's testing scheme is alleged to be. But that $25,000 doesn't tell the whole story, which brings us to point No. 2.

2. You (the government) can get your money back: RICO convictions allow for a fine consisting of the money illegally obtained by the defendant through the scheme to be repaid. In this case, Hall received financial bonuses for achieving the test score improvements. If prosecutors successfully prove their RICO case, it can proceed to a civil forfeiture hearing!

"But Stefan," I can hear you saying, "what does that mean?" The federal government does these all the time, and they have great names like United States v. 1976 Cadillac Eldorado or United States v. A Wallet We Found. In Georgia, these are more rare, but RICO allows the government to do it as part of the same case, which is a huge procedural advantage. Prosecutors can proceed in rem against people's possessions, which means they can seize property, whether it's a boat, a house, or anything of value, and seek to have it forfeited to the government.

Pretty sweet, eh? It is for the prosecutors and people who have been wronged. Not so much for the bosses and capos.

3. You (yes, you!) can get your money back: RICO also allows for something called "a private right of action." That means that if you were negatively affected by an alleged scheme, you might be able to sue Hall and possibly the school system, assuming you meet certain requirements. How about a citywide class action based on loss in home values attributable to the APS scandal? RICO makes that a possibility, but only just.

4. RICO's purpose is to pierce a criminal enterprise, and it was Howard's only option:This alleged scam is about cheating on tests, but nobody is charged with erasing answers or any of the acts that made for the actual cheating. They are all charged with making false statements to cover up those acts, not the acts themselves.

Alone among the APS defendants, Hall is charged with theft by taking for bonuses she received based on improvements in test scores. However, this isn't classic theft by taking, which most jurors will think of like a mugging. It may be difficult for a jury to understand how someone receiving money to which she was contractually entitled constitutes theft.

For a jury to be able to convict, RICO requires that prosecutors prove two of the underlying crimes (called "predicate acts" in the code). Without RICO, getting a conviction on false swearing by itself will seem like a loss for the district attorney. But false swearing and false signing each count as predicate crimes, which means that prosecutors can lose the theft by taking charge and still get the punishment it is looking for: large fines and serious jail time.

So take a lesson from Bill Clinton, Martha Stewart and, allegedly, Beverly Hall. Commit one crime, not two. And when the investigators come calling, take the Fifth. It's what it's there for.

Stefan Turkheimer is an Atlanta attorney and contributor to Peach Pundit.

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