Thursday, 24 May 2012

The world of Micro-Finance appears to be in denial of a new toxic-debt scandal

From 'The Universal Identifying Characteristics of a Cult' (David Brear, Axiom Books, 2005).

False justification. In pernicious cults, a core-group of adherents can be gradually dissociated from external reality and reformed into deployable agents, and/or de facto slaves, and/or expendable combatants, etc., furthering the hidden criminal objectives of their leaders, completely dependent on a collective paranoid delusion of absolute moral and intellectual supremacy fundamental to the maintenance of their individual self-esteem/identity and related psychological function. It becomes impossible for such fanatics to see humour in their situation or to feel pity for, or to empathise with, non-adherents. Their minds are programmed to interpret the manipulation, and/or cheating, and/or dispossession, and/or destruction, of inferior outsiders (particularly, those who challenge their group’s controlling scenario) as perfectly justifiable.

It has recently been reported that certain well-informed staff in the offices of Grameen America have finally applied common-sense and begun openly-warning potentially-vulnerable clients to avoid  'Multi-Level Marketing Income Opportunities' in general, and 'Herbalife' in particular. However, it was already a matter of public knowledge that a significant number of poor people around the world have been borrowing money from micro-finance institutions (like the Grameen Bank), but then progressively handing their borrowed-cash (which was intended to assist them is starting their own economically-viable, lawful business activities) to 'MLM' racketeers in the deluded belief that, by doing so, they would achieve financial independence. At the present time, due to a lack of full-disclosure by the senior officers of the micro-finance institutions concerned, it is impossible to determine exactly how much cash has been stolen in this way. One thing, however, is certain, this is a growing problem and one which has alarming parallels with the toxic-debt/liar-loans scandal - deliberately hidden for years, before it triggered the current world economic crisis. Anyone looking at this problem with fully-functioning critical faculties, should be able immediately to deduce that micro-finance institutions, in their present (opaque, let's trust everyone) form, could almost have been instigated for, or by, 'MLM Prosperity Gospel' racketeers.

In order to continue to function, 'MLM' racketeers were obliged to hunt outside of the USA for fresh, ill-informed victims to deceive and exploit. For a while, this endless-chain recruitment fraud only worked in developed countries, because victims need access to money to play the self-gratifying 'MLM' game of make-believe. However, parasitic groups, like 'Amway' and 'Herbalife, have been able to feed off developing countries (where the average citizen has neither cash nor credit), because micro-finance institutions have conveniently provided otherwise-destitute people with sufficient cash.

The readers of this Blog should be interested to learn that I have recently been told by someone working for the Grameen Foundation in Washington DC, that he (and apparently his senior colleagues) are fully-aware that  'MLM business/income opportunities,' like 'Herbalife' and 'Amway,' are 'pyramid frauds,' but that the Grameen Foundation has the intention of remaining publicly-silent on the issue. After this astonishing verbal declaration, I sent an e-mail to Todd Bernhardt, Director of Marketing and Communications at the Grameen Foundation in Washington DC, clearly informing him of the hidden menace that 'MLM income opportunity' racketeers pose to all poor individuals, families and communities around the world, and to the very concept of micro-finance. I then asked Mr. Bernhart: Who should be made aware of this important information at the Grameen Foundation? At no point in my e-mail did I suggest that the Grameen Foundation is itself a micro-finance institution directly responsible for making loans to the poor. 

The following is part of Mr. Bernhart's Orwellian response:

'I’m sure my colleagues are concerned about the prospect of poor people being taken advantage of; I think what they might have been trying to explain is how we pursue our mission to empower the poor, and what our relationship is to the various Grameen entities around the world.

Though inspired by the work of Nobel Peace Prize winner Prof. Muhammad Yunus, who helped found our organization and still serves on our Board as Director Emeritus, Grameen Foundation is in no way affiliated with Grameen Bank, the Bangladeshi microfinance institution (MFI) that Prof. Yunus founded in the late 1970s.  We also are not affiliated with Grameen American, an MFI that makes small loans to the poor in the United States. We are not a MFI – we do not make microloans or provide direct financial services to poor people anywhere in the world.

Instead, we work to support the microfinance sector around the world by providing products and services, including access to financing, that help make them more efficient and effective. We also work to empower the poor by providing them with mobile phone-based solutions that help them more effectively take care of their crops, animals, health and finances. These are the areas where we focus our attention, and our work has been very effective.

In the microfinance sector, MFIs are directly responsible for working with their clients, for assessing their creditworthiness and for providing guidance on how to use the funds that they lend them.  In the classic model of microfinance, such small loans should be used for productive, income-generating activities, and the vast majority of MFIs give this guidance to their clients, who typically follow a group-lending model where all five people in a borrowing group are responsible for each others’ loans.  Ultimately, however, it is the individual client’s responsibility to use their funds in a responsible manner, to ensure that they are able to pay back the loan they’ve taken and can continue to take out loans from the MFI.

As a non-profit organization, we constantly have to make decisions about how we can best use our limited resources to most effectively empower the poor.  We focus on the strategy spelled out above because we believe this is the best way to do the most possible good with the limited resources we have.  We do not communicate directly to poor people about multi-level marketing and other schemes because there are already many sources of information about these schemes out there, and we believe that people in the developing world – the people we are trying to help – already have access to this information.'

Thus, the 'Director of Marketing and Communications' at the Grameen Foundation has claimed his organization to be 'on a mission to empower the poor,' but in complete contradiction of his written statement (and of his own job description), he then says that he and his colleagues do not communicate directly to poor people, because they believe that poor people already have access to many sources of information. Unfortunately, 'knowledge itself is power,' and (by the same token) ignorance is vulnerability. 

Meanwhile, in the adult world of quantifiable reality, countless millions of poor and vulnerable, potential 'MLM' victims in developing countries, remain ignorant of the fact that more than 50 years of evidence (in the form of an almost total lack of payment of income tax), proves that, in practise, it has been impossible to generate an overall net-income lawfully by participating in a so-called 'Multi-Level Marketing business/income opportunity.' This, in theory, would involve regularly selling effectively-unsaleable 'MLM' products, and/or services, directly to the general public for a profit. Indeed, no one seriously diputes that (other than an insignificant minority of schills at the top of 'MLM' pyramids) the hidden overall loss/churn rate for all so-called 'MLM income opportunities,' has always been effectively 100%. Any micro-finance institution which has lent money to poor clients knowing that that were under the malign influence of 'MLM' racketeers has, in fact, been participating in a cruel fraud. Surely, years ago, the senior staff of micro-finance institutions must have spotted the glaring red flag that loans to would-be 'MLM' millionaires, never get repaid.

'Prosperity Gospel' cults like 'Amway' and  'Herbalife' have been deliberately designed to shut-down the critical and evaluative faculties of not only their victims, but also those of all casual observers. To the average person, famous people, like Madeleine Albright and David Beckham cannot possibly be associated with a racket, but when you have billions of dollars, it is possible to buy just about anyone (particularly, in the USA). Thus, Mr Bernhart's apparently genuine belief that poor people already have access to information about 'MLM' schemes, is revealed as being naive to the point of crass stupidity; particularly, when you know that 'MLM' racketeers have invested many millions of dollars of their ill-gotten gains in keeping the world ignorant of quantifiable reality in order to preserve and peddle their profitable, and pernicious, fiction as fact.

(Whilst watching this deceptively-kitsch video of the 'Amway' version of the 'MLM' Utopian fairytale,, keep in mind that the quantifiable evidence proves beyond all reasonable doubt that, since 1959, tens of millions of individuals around the world have been churned through the so-called 'Amway MLM income opportunity' whilst the actual, hidden net-profitability rate for so-called 'Amway Independent Business Owners' has been effectively-zero). 

Mr. Beckham is a personality who, although extremely wealthy, is not exactly noted for his intellectual capacities, but, in the case of Ms. Albright, it is difficult to believe that someone with her background and achievements can have fallen for a 'capitalist' adaptation of the age-old totalitarian/Utopian fairytale. Surely, she must have read George Orwell's 'Animal Farm.' Consequently, I am publicly asking Madeleine Albright the following, common-sense question (to which the only truthful answer is: 'none'):

Exactly what quantifiable evidence have you seen which proves that a significant number of people have actually earned an overall net-income lawfully from regularly retailing 'Herbalife' products to the general public for a profit?

However, it shouldn't be me asking this question of Madeleine Albright, it should be law enforcement agents.

Self-evidently, the recruiting, and/or co-opting, of celebrities and opinion-makers, for the purpose of promoting/hiding fraud, is one of the oldest, thought-stopping cultic tricks in the book. In respect of 'MLM Income Opportunity' fraud, this propaganda by association clearly forms part of an overall pattern of ongoing major racketeering activity (as defined by the US federal Racketeer Influenced and Corrupt Organizations Act, 1970).

For all poor persons who have been persuaded to invest their money, time and effort in the exploitative cultic racket known as 'MLM,' it has been the same as buying, and getting others to buy, monthly-tickets for a fake lottery fixed so that no one (except the handful of manipulative crooks who organized it) can win. The minority of apparent 'MLM' winners have all steadfastly pretended to have achieved a form of secure Utopian existence ('total financial freedom') by exactly duplicating the 100% positive attitude and behaviour of their own leaders, and by following a proven plan of recruitment and self-consumption. In reality, the bulk of the cash generated by 'MLM Prosperity Gospel' racketeers has derived from their peddling countless millions of effectively-valueless publications, recordings, tickets meetings, etc., on the fraudulent pretext that these exclusive materials are vital to achieving success in 'MLM.'

Because they have been deliberately set up to generate, and to hide the fact that they have had, no significant or sustainable retail sales to the general public, all so called 'MLM Income Opportunities' have been dissimulated closed-market swindles without any real source of revenue other than that deriving from their own constantly churning losing-participants.

Apparently, it has not been in the interests of micro-finance institutions to make a full-disclosure of their 'MLM'-related losses, because these institutions depend on maintaining their clean image in order to keep acquiring donations. Unfortunately, at the present time, any person or body of persons, making a cash-deposit with a micro-finance institution (certain that they are helping to empower the poor), risks their 'donation' winding up in the bulging pockets of billionaire 'MLM' racketeers.

David Brear (copyright 2012)

Saturday, 19 May 2012

'Herbalife' and 'NuSkin' shares are proved to be effectively-valueless

I have previously, clearly explained on this Blog that, despite their banal external appearance (and celebrity associations), the demonstrably-fake 'direct selling' companies known as 'Herbalife' and 'NuSkin' are the corporate fronts for vast, and ongoing, dissimulated closed-market swindles and associated advance fee frauds (a.k.a. 'Tool scams'). To date, no one has attempted to refute these detailed charges by producing the quantifiable evidence (in the form of audited accounts; particularly, income- tax payment receipts) which would prove that a significant percentage of the participants in any so-called 'MLM income opportunity' has actually generated an overall net-income lawfully from regularly retailing goods, and/or services, directly to the general public for a profit.

Although the grinning 'Herbalife' and 'NuSkin' racketeers have copied their cultic blame-the-victim criminal activities from the grinning bosses of the 'Amway' mob, by also withholding key information from financial regulators, they have significantly raised the stakes in the already-outrageous 'MLM' bluff - fraudulently generating billions of dollars via their peddling millions of effectively-valueless shares in their essentially-identical, camouflaged criminal enterprises. Sadly, before these counterfeit documents were launched on the stock market, some blindingly-obvious questions were evidently never put to the corporate officers of 'Herbalife' or 'NuSkin' by anyone from the SEC or the FBI; principally:

Where has the bulk of your alleged 'lawful direct selling companies' alleged 'income opportunities'' alleged 'sales revenue' actually come from:

the regular retailing of goods, and/or services, directly to the general public by your alleged 'distributors' for a profit,


from an endless-chain of recruits' regular, losing-investments laundered as 


On May 1st 2012, American hedge-fund manager, David Einhorn, publicly began to extract the ugly truth lurking behind so-called 'Multi-Level Marketing,' in a conference call with the evasive and inflexible bosses of the 'Herbalife' mob. 

Michael Johnson

Des Walsh
Des Walsh
John DeSimone
John DeSimone
Brett Chapman

The following is a transcript of the initial exchange (the 'Herbalife' racketeers were Messrs. Michael Johnson, Des Walsh, John DeSimone and Brett Chapman):

Q. (David Einhorn)... how much of the sales that you’d make in terms of final sales are sold outside the network and how much are consumed within the distributor base?

A. ('Herbalife') So, David, we have a 70% custom rule which is basically says that 70% of all products sold to consumers or actually consume by distributors for their own personal use. So obviously what we’ve seen with nutrition clubs is that we now have visibility for the first time to our customers. We know that we reported on this call for the first time the number of commercial clubs around the world, which is in excessive of 30,000, so that has given us feasibility to the tremendous amount of products that are being sold directly to the consumers and we see that as a growing trend in our business.

Q. (David Einhorn). So, what is the percentage actually sold to consumers who are not distributors?

A.('Herbalife') So, we don’t have an exact percentage David because we don’t have visibility to that level of detail.

Q. (David Einhorn). Do you have an approximation?

A. ('Herbalife') So well again going back to our 70%, where we believe is that it is that 70% or potentially in excess of that.

Self-evidently, given the wider evidence, during the course of David Einhorn's brief interrogation of the 'Herbalife' mob, everything these crooks said (and did not say), fitted into an overall pattern of ongoing, major racketeering activity (as defined by the US federal Racketeer Influenced and Corrupt Organizations Act, 1970, and clarified by subsequent US Supreme Court judgements). By failing to make a full public disclosure of their dissimulated closed-market swindle, when invited to do so by an investor (or potential investor) in their counterfeit company's shares, the 'Herbalife' bosses committed wire fraud and attempted to obstruct justice. Laughably, they continued with their absurd 'MLM direct selling' bluff - withdrawing into Orwellian double-think - first steadfastly pretending that 'Herbalife's' must be a law abiding company, because it has a 70% retail sales rule. However, when pressed, they said that they only believe that at least 70% of 'Herbalife's' declared multi-billion dollar annual sales are to persons who are not 'Herbalife Distributors,' but almost in the same breath, the 'Herbalife' racketeers tried to convince David Einhorn that it is perfectly normal for them not to have access to any evidence which would support their anecdotal claim to be acting within the law. In the adult world of quantifiable reality, this predictable dodging of a rather fundamental question, quickly wiped around 33% off the counterfeit share-values of 'NuSkin' and 'Herbalife'. In 'Herbalife's' case, this represented $1.7 billions. Yet, even in the light of these remarkable events, only a few independent commentators have begun to use their critical, and evaluative, faculties and comprehend the full-horror lurking behind the pernicious 'MLM' fairytale of which 'Herbalife' and 'NuSkin' are just two reality-inverting chapters.

In a recent court case in Belgium, part of the pernicious 'MLM' fairytale was challenged by attorneys acting for a Belgian consumer protection association. At this time, 'Herbalife's' attorney's were given the perfect opportunity to produce evidence that the company's so-called 'MLM income opportunity' has had a significant and sustainable source of revenue other than that deriving internally from its own constantly-churning participants. However, when 'Herbalife's' Belgian attorneys failed to produce this evidence (for the simple reason that it does not exist), the company's activities were judged to be an unlawful pyramid scheme, but, predictably, this common-sense verdict was immediately appealed

David Brear (copyright 2012)

Tuesday, 15 May 2012

The Bosses of 'Herbalife' have been robbing the Grameen Bank via its customers

Professor Muhammad Yunus is a Bangladeshi economist who, in 1976, attempted to tackle the problem of world-poverty by founding the Grameen Bank. It is widely-reported that this international institution now distributes more than $100 millions of low interest, small (or micro-credit) loans annually, to persons (mostly women) without collateral, in order to help them to escape the poverty-trap by starting their own businesses and achieving financial self-sufficiency. Muhammad Yunus was awarded the Nobel Peace Prize in 2006, along with Grameen Bank, for their campaign to create economic and social development around the world. 

Muhammad Yunus U.S. President Barack Obama (R) presents the Medal of Freedom to Professor Muhammad Yunus, founder of the Grameen Bank, during a ceremony in the East Room of the White House August 12, 2009 in Washington, DC. Obama presented the medal, the highest civilian honor in the United States, to 16 recipients during the ceremony.

Amongst many other international awards, Muhammad Yunus received the Presidential Medal of Freedom from Barack Obama, in 2009.

It might come as a surprise for readers to learn that, legally, Grammeen Bank has not been classified as a bank in the USA and it has, therefore, not been subject to usual bank regulation. This is because Grameen America can't accept deposits from the public and, instead, raises capital through non-refundable deposits or 'donations.' In other words, Grameen has not been fully-accountable to the people financing it; for they are not investors and their motivation has not been profit. In 2008, Grameen America opened its first Branch in the New York borough of Queens. This was followed, in 2009, with a branch in the South Side of Omaha, Nebraska, where almost all borrowers have been unemployed, women immigrants from Latin America.

It has recently been reported that many of the poor women who received their initial $1500 loans from Grameen America in New York and Omaha, have been persuaded to pour this borrowed-cash into 'Herbalife' and other 'MLM income opportunity' frauds, believing that they were going to achieve total financial freedom through buying a quota of products each month whilst recruiting their friends and relatives to duplicate the same endless-chain plan. In this way, numerous empty stores in Omaha were transformed into so-called 'Herbalife Nutrition Clubs.' These were typically draped with green curtains and decorated with posters of soccer stars who play for clubs sponsored by 'Herbalife.' 

Sadly, these so-called 'Herbalife Clubs' continue to vanish and the loans which were used to create them, have not been repaid via profits generated via regular sales of 'Herbalife' products to the general public (based on value and demand).

In reality, so-called 'MLM income opportunities' have been dissimulated closed-market swindles (i.e. without a significant or sustainable source of revenue other than that deriving from their own contributing participants, due to the fact that 'MLM' wampum always been effectively-unsaleable on the open market). Classically, other than an insignificant minority of schills at the top of these pyramids, so-called 'MLM income opportunities,' have had 100% rolling loss/churn rates, whilst this key-information has been deliberately hidden from the public by their instigators.

Until recently the Grameen Bank has operated a policy of trusting its clients to make their own choice of business. However, for obvious reasons, certain Grameen staff have belatedly begun to advise their American borrowers not to get involved with with 'MLM' in general, and 'Herbalife,' in particular.

It is interesting to note that the US federal government's Small Business Administration (without actually naming any so-called 'MLM' companies, because that is forbidden by law) specifically lists all 'pyramid sales plans' as being ineligible for financial assistance; describing them as:

... 'plans, where a participant's primary incentive is based on the sales made by an ever-increasing number of participants. Such products as cosmetics, household goods, and other soft goods lend themselves to this type of business.'

David Brear (copyright 2012)

Monday, 7 May 2012

The US federal Racketeer Influenced and Corrupt Organizations Act was originally drawn up to combat a form of pernicious cultism

From 'The Universal identifying Characteristics of a Cult' (David Brear, Axiom Books, copyright 2005).

Structural mystification. The instigators of pernicious cults can continue to organize the creation, and/or dissolution, and/or subversion, of further (apparently independent) corporate structures pursuing lawful, and/or unlawful, activities in order to prevent, and/or divert, investigation and isolate themselves from liability. In this way, some cults survive all low-level challenges and spread like cancers enslaving the minds, and destroying the lives, of countless individuals in the process. At the same time, their leaders acquire absolute control over capital sums which place them alongside the most notorious racketeers in history. They operate behind ever-expanding, and changing, fronts of ‘privately-controlled, limited-liability, commercial companies,’ and/or ‘non-profit-making associations,’ etc. Other than ‘religious /philosophical’ and ‘political’ movements and ‘secret societies,’ typical reality-inverting disguises for cultic crime are:

‘charity/ philanthropy’; ‘fund-raising’; ‘lobbying’ on topical issues (‘freedom’, ‘ethics’, ‘environment’, ‘human rights’, ‘women’s rights’, ‘child protection’, ‘law enforcement’, ‘social justice’, etc.); ‘publishing and media’; ‘education’; ‘academia’; ‘celebrity’; ‘patriotism’; ‘information technology’; ‘public relations’; ‘advertising’; ‘medicine’; ‘alternative medicine’; ‘nutrition’; ‘rehabilitation’; ‘manufacturing’; ‘retailing’; ‘direct selling/ marketing’; ‘multilevel marketing’; ‘network marketing’; ‘regulation’; ‘personal development’; ‘self-betterment’; ‘positive thinking’; ‘self-motivation’; ‘leadership training’; ‘life coaching’; ‘research and development’; ‘investment’; ‘real estate’; ‘sponsorship’; ‘bereavement/trauma counselling’; ‘addiction counselling’; ‘legal counselling’; ‘cult exit-counselling’; ‘financial consulting’; ‘management consulting’; ‘clubs’; etc. 

Repression of all dissent. The leaders of the most-destructive cults are megalomaniacal psychopaths (i.e. suffering from a chronic mental disorder, especially when resulting in paranoid delusions of grandeur and self-righteousness, and the compulsion to pursue grandiose objectives). The unconditional deference of their deluded adherents only serves to confirm, and magnify, the leaders’ own paranoid delusions. This type of cult leader maintains an absolute monopoly of information whilst perpetrating, and/or directing, evermore heinous crimes. They sustain their activities by the imposition of arbitrary contracts and codes (secrecydenunciation, confession,justice, punishment, etc.) within their groups, and by the use of humiliation, and/or intimidation, and/or calumny, and/or malicious prosecution (where they pose as victims), and/or sophism, and/or the infiltration of traditional culture, and/or corruption, and/or intelligence gathering and blackmail, and/or extortion, and/or physical isolation, and/or violence, and/or assassination, etc., to repress any internal or external dissent.


I've recently been asked:

What is the connection between the 'Mafia' and cultism and what has the RICO Act got to do with cults ?

Quite a lot, as it turns out.

The Racketeer Influenced Corrupt Organizations (RICO) Act (enacted by section 901 [a.] of the Organized Crime Control Act) is a United States federal law which (in theory) provides extended criminal penalties for, and powerful civil remedies against, the leaders and agents of ongoing criminal organizations and their de facto associate enterprises. 

(A copy of the RICO Act, can be found at the end of this article)

J. Edgar Hoover               Robert Kennedy

In the early 1960s, after Robert Kennedy was appointed Attorney General, the US Dept. of Justice was given a significant role with a co-ordinated national ‘Strike Force,’ established under the direction of the Inspector General of the US Dept. of Labor. This new initiative was the product of an overt, joint congressional policy to hold the leaders of major organized crime groups to account, as well as dismantle their webs of corrupt political figures, judges, attorneys, trade union officials, senior law enforcement agents, etc.

Even though he never faced criminal prosecution, the long-time Director of the FBI, J. Edgar Hoover, is now known to have been under the influence of racketeers. He was certainly being bribed and probably blackmailed. Despite a growing mountain of conclusive evidence, for decades, Hoover steadfastly denied the existence of  the 'Mafia,' let alone a syndicate of major organized crime groups, in the USA. Yet, the average American knew full-well that, during these same decades, a pernicious criminal underworld had been gnawing its way into the heart of the republic. However, although the Democratic administration’s will to protect US citizens was apparently hardened by the assassinations of President Kennedy and Robert Kennedy, existing legislation was deemed inadequate. Paradoxically, the US Justice Dept. had an ‘Organized Crime and Racketeering Section,’ but technically these offences were not really defined in law. Thus, RICO was signed into law in 1970 by the new Republican President, Richard Nixon, but only as a result of ground-breaking recommendations made in the late 1960s by President’s Johnson’s 'Commission to Examine Crime in America.' 

Prof. G. Robert Blakey
John Little Mcclellan

The Bill was drafted by Prof. G. Robert Blakey
(former Special Attorney in the Organized Crime and Racketeering Section of the Justice Dept.) under the close supervision of the veteran Democratic Senator for Arkansas, John Little McClellan . 

Subsequently (guided by Prof. Blakey), a number of individual States (notably, California) enacted similar legislation.

Edward G. Robinson as 'Little Rico'

The RICO Act appeared for all the world to be directed against the Italian American ‘Mafia,’ although its authors refuted this. Whether intentional or not, the Italian-sounding acronym, 'RICO,' is the name of the fictional anti-hero of the classic 1931 Hollywood gangster movie, ‘Little Caesar’ (starring Edward G. Robinson, directed by Mervyn LeRoy and based on the 1929 Novel by William R. Burnett). The RICO Act was drafted by lawyers for lawyers, and is, therefore, legalistic, but, at first glance, it can appear to be written in plain language, because it also contains some popular terms. Even when deconstructed, the Act  (like the enduring phenomenon it addresses) cannot be fully-understood in isolation. In reality, in respect of the ‘Mafia,’ by 1970, the RICO legislators were trying to shut the stable door long after the horses had bolted and begun to breed. 

Frank Tieri
Joe Valachi

Tellingly, another full decade was to elapse before an elderly and insignificant ‘Mafia’ decoy 'boss', Frank Tieri (who had previously pretended to be an employee of a sportswear manufacturer), was actually convicted under RICO. However, RICO legislators (who were not obstructed by 'sociologists of religion') had access to a lot of key-information, some of which had been supplied by 'Mafia' apostates like Joe Valachi

- Violent gangs of thieves had been endemic to, and feeding off, Sicilian and southern Italian culture for centuries. However, at the beginning of the 19th century a pernicious phenomenon appeared in Sicily. By the mid-19th century, well-organized, all-male gangs were being described in reports (written by insightful Italian government officials) as ‘sects’ or ‘cults' of 'thieves.' Their main criminal enterprise involved the instigation of a form of perverted belief system in which converts were persuaded of imminent and omnipresent doom, but then they were peddled salvation. This classic cultic racket was based on the fact that fear spreads like a virus and, eventually, can become a way of life. By means of strategic attacks,  farmers in certain regions of Sicily (where government was distrusted), became convinced that their crops and homes would be burned and that they, and/or their families, and/or their livestock, would be poisoned, shot, mutilated, etc., if they didn't keep paying for private protection. Like 'Fagin' in 'Oliver Twist,' leaders of these extortion-gangs directed operations and controlled all the profits, exploiting not only victims, but also gang members who displayed unquestioning loyalty to a point where they would lay down their lives. This behaviour has been described as being part of Sicilian culture, but (according to reliable witness testimonies) it was actually produced by co-ordinated, devious techniques of social, psychological and physical persuasion - comprising ritual incrimination combined with ritual initiation into pyramids of secrecy and obedience like those found within 'Catholic,' Military Orders (e.g. the ‘Knights Templar’) and Fraternal Secret Societies (e.g. the ‘Freemasons’). 

- Although, Sicilian 'cults of thieves' did not have formal names, their adherents became commonly-referred to as ‘Mafiosi’ (those who boast and swagger), whilst the gangs were known as ‘Mafia.' It is interesting to note that the original meaning of  'Mafiosi,' is a good description of arrogant narcissists.

- ‘Mafia’ were ruled by a 'Don' ('Father'). These patriarchal positions and the territories they exploited, were passed on within gangs, but they weren't necessarily hereditary. The essentially-identical, secret rituals and structure of 'Mafia,' were never to be written down or passed to the uninitiated.

-'Mafiosi' occupied well-defined, military-style ranks in the pyramid of obedience. Although not necessarily related by blood, new recruits (who were often obliged to commit a ritual murder as an act of initiation) swore an oath of 'Family' loyalty. This also obliged them, on pain of death, to respect a strict code of silence, ‘Omerta’ or 'Manhood' (i.e. 'Mafiosi' had to behave like men and settle their own problems).  Consequently, if questioned, ‘Mafiosi’ systematically denied not only their own involvement, but also the ‘Mafia’s’ existence. Indeed, once initiated into even the lowest level of secrecy and obedience in a ‘Mafia Family,’ there was no real exit other than death.

- During the second half of the 19th century, mass-immigration brought single-ethnic gangs to American cities, particularly New York. One of the earliest Italian cultic gangs to become notorious in the USA was known as ‘A Manu Niura’ ('The Black Hand'). Its leaders specialized in extortion - sending out letters (sometimes printed with a black hand) graphically threatening assassination, kidnapping, arson, mutilation, etc., if demands for money weren’t met. Immigrants with family-members remaining in Italy, were particularly vulnerable to this type of crime. 

- Soon, within the densely-populated Italian enclaves, ‘Mafiosi’ were employing all their familiar, brutal tactics to establish the widespread belief that if you didn't keep paying them for salvation, you were doomed. The sustainable racket euphemistically-known as ‘selling protection/insurance,’ remained the base activity, but other crimes included trafficking in illegal immigrants

-‘Mafia' usually hid behind a front of a banal, Italian, family-owned, commercial enterprises. However, internally they were classic totalitarian dictatorships in microcosm - centrally-controlled and requiring of their adherents an absolute subservience to the group and its patriarchal leadership above all other persons. It didn't take the bosses long to discover that the more, counterfeit 'commercial' fronts they created, and/or subverted, in the USA: the more difficult it became for inexperienced, non-Italian, law enforcement agents to fathom what was lurking behind them.  

- Typical ‘Mafia’ victims were non-English-speaking immigrants who already didn't trust the authorities, and who were far too scared to complain to law enforcement agencies. The few who did, were subjected to terrifying intimidation and they generally withdrew their complaints before any trial. Those who refused to bow down to the ‘Mafia,’ were invariably assassinated along with their family members (sometimes years afterwards).

- Prior to 1919 (and the prohibition of the sale alcohol by a short-sighted federal law that was effectively-unenforceable), the problem of single ethnic gangs was largely-confined to their respective communities in cosmopolitan American cities. The authorities apparently never considered that, one day, they might pose a serious threat to democracy and the rule of law in the USA. As we all now know, during the 1920s, bootlegging enabled the most-ruthless gang leaders (not just Italians) to expand their activities and illegally acquire absolute control over capital sums which made them infinitely more powerful than State or federal law enforcement agencies. Cities like Chicago, became totalitarian enclaves within the republic - completely controlled by a handful of fabulously wealthy racketeers who had corrupted, and/or intimidated, and/or blackmailed, and/or assassinated, a remarkable number of political figures, judges, senior law enforcement agents, attorneys, public officials, journalists, editors, etc. In effect, during the period 1919-1933, US federal legislators handed one of the nation’s most profitable industries and sources of tax revenue, into the hands of criminal psychopaths. By the time reality was faced, the damage had already been done; major organized crime was well and truly established in the USA.

- By the 1930s, what the press called, a ‘National Crime Syndicate,’ had evolved. The various ethnic gang bosses of NYC and New Jersey began to co-operate - Italian, German, Irish and Jewish. 

- Eventually, the entire USA was secretly sectioned off into geographically-defined enclaves exploited by 26 gangs. Although a system of internal dispute resolution was introduced, during certain periods, bosses formed alliances with, and fought internecine wars against, other gangs in order to expand and protect their respective interests. 

- Italian racketeers, proved the most adaptable when prohibition ended, turning to:  unlicensed gambling/bookmaking; prostitution; theft; fraud; blackmail; kidnapping; counterfeiting; usury (loan-sharking); drug dealing; etc. They followed their age-old, esoteric tactics and hid behind ever more-mystifying labyrinths of corporate structures pursuing unlawful, and/or lawful enterprises. These were maliciously created in order to prevent, and/or divert, investigation and isolate the final beneficiaries from liability. The corporate officers of individual 'Mafia' front-groups were usually non-initiates chosen for their innocent appearance (wives, young relatives, etc.), and ignorance of how the 'Mafia' functioned. Consequently, if they were questioned, arrested or taken to court, they knew nothing that might endanger the bosses or the wider-operation.

- Until the late 1950s, as far as most US law enforcement agencies were concerned, the ‘Mafia' bosses had maintained almost an absolute monopoly of information about their grandiose criminal objectives. In 1957, this monopoly was first publicly challenged (in respect of the 'Mafia's' corruption of trade union officials) by a Senate Committee chaired by John Little McClellan, supported by some attorneys within the US Dept. of Justice. . 

- The 'Mafia' bosses were still able to sustain their wider activities by the enforcement of existing, arbitrary contracts and codes (secrecy, denunciation, confession, justice, punishment, etc.) within their ‘Families,’ and by their use of intimidation, and/or the infiltration of traditional culture, and/or corruption, and/or intelligence gathering, and/or blackmail, and/or extortion, and/or violence, and/or assassination, etc. to repress any internal or external dissent. 

- Although the Italian American 'Mafia' was positively identified as a real phenomenon (referred to by its initiates as, 'Cosa Nostra' or 'Our Thing'), and various isolated 'Mafiosi, and their corrupt contacts, were imprisoned during the 1960s for individual crimes, the organization remained effectively above the law. In reality, what its bosses were doing (i.e. running an axis of secretive, and abusive, totalitarian States in microcosm, within a democracy), was, by its very nature, designed to keep them beyond the reach of the law.

The above, was essentially the catastrophic situation that faced US federal legislators at the end of the 1960s. In reality, the law they enacted in 1970, sought to combat a form of pernicious cultism, or occult totalitarianism, but without listing the universal identifying characteristics of the underlying phenomenon. However, RICO is an important piece of legislation in that it officially recognized (after decades of official denial) that dissimulated, subversive/criminogenic organizations exist which have been maliciously constructed to deceive all but the most-intellectually-rigorous of investigators, and that their activities cannot be fully understood in isolation, because they form part of an overall pattern. In the end, RICO should probably be judged by the facts that it has not really been used effectively by federal prosecutors, and that 24 'Mafia Families' are still known to survive, whilst  major organized crime has become an ongoing global problem.

Theoretically, under RICO, in the USA an individual who is a member of any enterprise that has committed any two of 35 crimes (27 federal and 8 State) within a period of 10 years can be charged with ‘racketeering.’ The penalty for this crime is a fine of $250 thousands, and/or 20 years in prison, per racketeering count. In addition the convicted racketeer must forfeit all benefits, and any interest on these benefits, derived from a pattern of racketeering activity. RICO also allows for a private individual victimized by the actions of a criminal organization to file a civil suit against the racketeers, and, if successful, claim triple damages. Furthermore, when an individual is indicted under RICO, the US Attorney has the option of seeking a pre-trial restraining order or injunction to seize the defendant’s assets and, thus, block the transfer of illegally acquired-property which might be forfeited in the future.

Two generations of 'Amway' bosses + decoys (c. 1995)

During the 1990s, the author of RICO, Prof. G. Robert Blakey, was retained by attorneys acting for the 'Proctor and Gamble' company to offer his expert opinion of the 'Amway Corporation.' The result was, what has become known as, 'The Blakey Report.' At one time, I exchanged e-mails with G. Robert Blakey. For obvious reasons, he was not at all helpful and he advised me that, if I published any part of his report, he would be obliged to take legal action against me; apparently, on the grounds that his report was subject to a legal settlement in which Proctor and Gamble's attorneys agreed that his opinion of 'Amway' had been confidential and would be kept confidential. Strangely, Prof. Blakey also informed me that his once-confidential report had, in fact, been stolen from his office by an assistant, and posted on the Internet without his permission. When you read it, it's not difficult to see why the bosses of 'Amway' didn't want the wider-world to know what the author of the RICO Act thought of their hidden activities. Ironically, when the wider-evidence is examined, 'Amway's' attorneys' failed-attempts to suppress this key-information clearly form part of an overall pattern of ongoing, major racketeering activity (as defined by the Racketeer Influenced and Corrupt Organizations Act, 1970, and clarified by subsequent US Supreme Court judgements).

Prof. Blakey opened his report, by stating:

'It is my opinion that the Amway business is run in a manner that is parallel to that of major organized crime groups, in particular the Mafia. The structure and function of major organized crime groups, generally consisting of associated enterprises engaging in patterns of legal and illegal activity, was the prototype forming the basis for federal and state racketeering legislation that I have been involved in drafting. The same structure and function, with associated enterprises engaging in patterns of legal and illegal activity, is found in the Amway business.'

It is my opinion that G. Robert Blakey (who apparently was only given access to a very limited amount of evidence about the 'Amway' mob), began to identify (in his particular terminology) one section of a wider criminogenic phenomenon which I have described as representing (due to its unchecked, multi-billion dollar growth and extensive infiltration of traditional culture) perhaps the greatest threat to democracy and rule of law, of any latter-day form of pernicious cultism. Sadly, various essentially-identical 'MLM prosperity Gospel' mobs, now form a powerful global syndicate of organized crime, the existence of which is still largely-unthinkable to casual observers (including, legislators, law enforcement agents, judges and journalists).

David Brear (copyright 2012)


The following is taken from 'Black's Law Dictionary,' page 1286 (8th ed. 2005).

In 1970, the RICO Act was passed with the purpose of attacking organized criminal activity and preserving marketplace integrity by investigating, controlling, and prosecuting persons who participate or conspire to participate in racketeering.

Racketeering has two pertinent definitions. First, racketeering may be “a system of organized crime traditionally involving the extortion of money from businesses by intimidation, violence, or other illegal methods." Id. Additionally, 18 U.S.C. §§ 1961 et seq., defines racketeering as a "pattern of illegal activity (such as bribery, extortion, fraud, and murder) carried out as part of an enterprise (such as a crime syndicate) that is owned or controlled by those engaged in the illegal activity." Id. at 1287; see also 18 U.S.C. § 1961(1) (2005). This second definition has expanded the legal conception of racketeering to contain additional crimes, including the collection of illicit gambling debts, securities fraud, and mail fraud. Id. The RICO Act is open to broad interpretation, so it may be employed in a manner unintended by Congress. In one case, the U.S. Attorney stated that a perpetrator who attacked an abortion clinic could be charged under the RICO statutes if he acted as part of an organization. Joseph Berger, Prosecutors to Present Clinic Doctor's Slaying to Grand Jury,N.Y. TIMES (Apr. 20, 1999) at B5. Commenting on a civil lawsuit brought against an anti-abortion group, one Florida Representative said, "It was never the intention that the law be used against advocacy groups." SeeClinic bomb victim speaks against bill to curb RICO, FORT WORTH STAR-TELEGRAM Jul 18, 1998 at 7. The RICO statutes can be applied in both criminal and civil cases, for a plaintiff can file a suit against a defendant for treble damages. id. at 1286. Consequently, both prosecutors and plaintiffs have reason to claim that many actions are punishable under the RICO statutes.

The Crime

18 U.S.C. § 1962 (2005).
Under this section, there are three different crimes that can be committed, plus an additional conspiracy provision.

Under section 1962(a), it is a crime for any person who has received any income derived from a pattern of racketeering activity or through collection of an unlawful debt in which such person has participated as a principal, to
  • use or invest, directly or indirectly, any part of such income, or the proceeds of such income,
    • in acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce. 18 U.S.C. § 1961(a).
Under section 1962(b), it is a crime for a person, through a pattern of racketeering activity or through collection of an unlawful debt,
  • to acquire or maintain, directly or indirectly, any interest in or control of any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce. Id. § 1962(b)
Under section 1962(c), it is a crime for a person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to
  • conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt. Id. § 1962(c)
Under section 1962(d), it is a crime for any person to conspire to violate any of the provisions of section 1962. Id. § 1962(d).
Section 1962(a) generally does not apply to a purchase of securities on the open market for purposes of investment, and without the intention of controlling or participating in the control of the issuer, if the securities of the issuer held do not amount in the aggregate to one percent of the outstanding securities of any one class, and do not confer, either in law or in fact, the power to elect one or more directors of the issuer.) 18 U.S.C. § 1962(a).

The Punishment

18 U.S.C. § 1963 (2005).
A violation of section 1962 can be punished by

  • a fine,
  • imprisonment for not more than 20 years, or
  • both. 18 U.S.C. § 1963(a).
If the violation is based on a racketeering activity for which the maximum penalty includes life imprisonment, then the violation can be punished by
  • a fine,
  • imprisonment for up to life, or
      both. Id.
    Furthermore, the violation will result in the forfeiture to the United States of
    • any interest the person has acquired or maintained in violation of section 1962. 18 U.S.C. § 1963(a)(1).
    • any-
      • interest in any enterprise which the person has established, operated, controlled, conducted, or participated in the conduct of, in violation of section 1962; id. § 1963(a)(2)(A);
      • security of any enterprise which the person has established, operated, controlled, conducted, or participated in the conduct of, in violation of section 1962; id. § 1963(a)(2)(B);
      • claim against any enterprise which the person has established, operated, controlled, conducted, or participated in the conduct of, in violation of section 1962; id. § 1963(a)(2)(C); or
      • property or contractual right of any kind affording a source of influence over any enterprise which the person has established, operated, controlled, conducted, or participated in the conduct of, in violation of section 1962; id. § 1963(a)(2)(D); and
    • any property constituting, or derived from, any proceeds which the person obtained, directly or indirectly, from racketeering activity or unlawful debt collection in violation of section 1962. 18 U.S.C. § 1963(a)(3)
    Furthermore, in lieu of a fine otherwise authorized by this section, a defendant who derives profits or other proceeds from an offense may be fined not more than twice the gross profits or other proceeds. 18 U.S.C. § 1963(a).
    The remaining provisions of section 1963 concern forfeiture procedures.


18 U.S.C. § 1961 (2005).
Section 1961 contains a long list of definitions of what constitutes racketeering. As used in the RICO statutes,

  • "racketeering activity" means
    • any act or threat involving
      • murder,
      • kidnapping,
      • gambling,
      • arson,
      • robbery,
      • bribery,
      • extortion,
      • dealing in obscene matter, or
      • dealing in a controlled substance or listed chemical,
      which is chargeable under State law and punishable by imprisonment for more than one year; 18 U.S.C. § 1961(1)(A).
    • any act which is indictable under any of the following provisions of title 18, United States Code:
      • Section 201 (relating to bribery),
      • section 224 (relating to sports bribery),
      • sections 471, 472, and 473 (relating to counterfeiting),
      • section 659 (relating to theft from interstate shipment) if the act indictable under section 659 is felonious,
      • section 664 (relating to embezzlement from pension and welfare funds),
      • sections 891-894 (relating to extortionate credit transactions),
      • section 1028 (relating to fraud and related activity in connection with identification documents),
      • section 1029 (relating to fraud and related activity in connection with access devices),
      • section 1084 (relating to the transmission of gambling information),
      • section 1341 (relating to mail fraud),
      • section 1343 (relating to wire fraud),
      • section 1344 (relating to financial institution fraud),
      • section 1425 (relating to the procurement of citizenship or nationalization unlawfully),
      • section 1426 (relating to the reproduction of naturalization or citizenship papers),
      • section 1427 (relating to the sale of naturalization or citizenship papers),
      • sections 1461-1465 (relating to obscene matter),
      • section 1503 (relating to obstruction of justice),
      • section 1510 (relating to obstruction of criminal investigations),
      • section 1511 (relating to the obstruction of State or local law enforcement),
      • section 1512 (relating to tampering with a witness, victim, or an informant),
      • section 1513 (relating to retaliating against a witness, victim, or an informant),
      • section 1542 (relating to false statement in application and use of passport),
      • section 1543 (relating to forgery or false use of passport),
      • section 1544 (relating to misuse of passport),
      • section 1546 (relating to fraud and misuse of visas, permits, and other documents),
      • sections 1581-1591 (relating to peonage, slavery, and trafficking in persons),
      • section 1951 (relating to interference with commerce, robbery, or extortion),
      • section 1952 (relating to racketeering),
      • section 1953 (relating to interstate transportation of wagering paraphernalia),
      • section 1954 (relating to unlawful welfare fund payments),
      • section 1955 (relating to the prohibition of illegal gambling businesses),
      • section 1956 (relating to the laundering of monetary instruments),
      • section 1957 (relating to engaging in monetary transactions in property derived from specified unlawful activity),
      • section 1958 (relating to use of interstate commerce facilities in the commission of murder-for-hire),
      • sections 2251, 2251A, 2252, and 2260 (relating to sexual exploitation of children),
      • sections 2312 and 2313 (relating to interstate transportation of stolen motor vehicles),
      • sections 2314 and 2315 (relating to interstate transportation of stolen property),
      • section 2318 (relating to trafficking in counterfeit labels for phonorecords, computer programs or computer program documentation or packaging and copies of motion pictures or other audiovisual works),
      • section 2319 (relating to criminal infringement of a copyright),
      • section 2319A (relating to unauthorized fixation of and trafficking in sound recordings and music videos of live musical performances),
      • section 2320 (relating to trafficking in goods or services bearing counterfeit marks),
      • section 2321 (relating to trafficking in certain motor vehicles or motor vehicle parts),
      • sections 2341-2346 (relating to trafficking in contraband cigarettes),
      • sections 2421-2424 (relating to white slave traffic),
      • sections 175-178 (relating to biological weapons),
      • sections 229-229F (relating to chemical weapons),
      • section 831 (relating to nuclear materials). Id. § 1961(1)(B).
    • an act which is indictable under title 29 U.S.C. § 186 (dealing with restrictions on payments and loans to labor organizations) or 18 U.S.C. § 501(c) (relating to embezzlement from union funds). Id. § 1961(1)(C).
    • any offense involving fraud connected with
      • a case under title 11 (except a case under 18 U.S.C. § 157),
      • fraud in the sale of securities, or
      • the felonious manufacture, importation, receiving, concealment, buying, selling, or otherwise dealing in a controlled substance or listed chemical, punishable under any law of the United States. Id. § 1961(1)(D).
    • any act which is indictable under the Currency and Foreign Transactions Reporting Act. Id. § 1961(1)(E)
    • any act which is indictable under the Immigration and Nationality Act,
      • 8 U.S.C. § 1324 (relating to bringing in and harboring certain aliens),
      • 8 U.S.C. § 1327 (relating to aiding or assisting certain aliens to enter the United States),
      • 8 U.S.C. § 1328 (relating to importation of alien for immoral purpose)
      if the act indictable under such section of such Act was committed for the purpose of financial gain. Id. § 1961(1)(F).
    • any act that is indictable under any provision listed in 18 U.S.C. § 2332b(g)(5)(B). Id. § 1961(1)(G)
  • "enterprise" includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity. 18 U.S.C. § 1961(4).
  • "pattern of racketeering activity" requires at least two acts of racketeering activity, one of which occurred after the effective date of this chapter and the last of which occurred within ten years (excluding any period of imprisonment) after the commission of a prior act of racketeering activity. 18 U.S.C. § 1961(5).
  • "unlawful debt" means a debt
    • incurred or contracted in gambling activity which was in violation of the law of the United States, a State or political subdivision thereof, or which is unenforceable under State or Federal law in whole or in part as to principal or interest because of the laws relating to usury, 18 U.S.C. § 1961(6)(A) and
    • which was incurred in connection with the business of gambling in violation of the law of the United States, a State or political subdivision thereof, or the business of lending money or a thing of value at a rate usurious under State or Federal law, where the usurious rate is at least twice the enforceable rate. Id. § 1961(6)(B).
  • "racketeering investigator" means any attorney or investigator so designated by the Attorney General and charged with the duty of enforcing or carrying into effect this chapter. 18 U.S.C. § 1961(7).
  • "racketeering investigation" means any inquiry conducted by any racketeering investigator for the purpose of ascertaining whether any person has been involved in any violation of this chapter or of any final order, judgment, or decree of any court of the United States, duly entered in any case or proceeding arising under this chapter [18 USCS §§ 1961 et seq.]. 18 U.S.C. § 1961(8).

Case Law Interpreting the RICO Act

As can be clearly seen from section 1961, the list of affiliated activities is quite large and many organizations and individuals can easily find themselves subject to the stiff penalties and sanctions afforded under RICO. As a preliminary matter, it should be noted that, while the Act refers to "Criminal Organizations," membership in organized crime is not a necessary element of a RICO conviction. United States v. Uni Oil, Inc. 646 F.2d 946, 953 (5th Cir. 1981).
In order to secure a conviction under the RICO Act, the government must prove both the existence of an "enterprise," and a connected "pattern of racketeering activity." United States v. Turkette, 452 U.S. 576, 583 (1981). An enterprise is an entity, and it can be proved by evidence of an ongoing organization, and by evidence that the carious associates function as a continuing unit. Id. The pattern of racketeering activity is a series of criminal acts, which can be proved by evidence of the requisite number of acts of racketeering committed by the participants in the enterprise. Id. Proof of one, however, does not necessarily prove the other. Id. Furthermore. Racketeering enterprises or racketeering predicate acts do not need to be accompanied by an underlying economic motive. NOW v. Scheidler, 510 U.S. 249, 259, 261 (1994).
To clarify how each of the three subsections of section 1962 operate, the case Kehr Packages v. Fidelcor, Inc., 926 F.2d 1406 (3rd Cir. 1991) is informative. Under section 1962(a), the plaintiff (or government) must allege an injury specifically from the use or investment of income in the named enterprise; under section 1962(b) the plaintiff (or government) must allege a specific nexus between control of a named enterprise and the alleged racketeering activity; and while section 1962(c) is not subject to these nexus limitations, cases brought under section 1962(c) cannot allege that an entity is both an enterprise and a defendant. Kehr at 1411.
In establishing a pattern of racketeering activity, the prosecutor must show that racketeering predicates are related and that they amount to or pose a threat of continued criminal activity. H.J., Inc. v. Northwestern Bell Tel, Co. 492 U.S. 229, 240 (1989). This may be done in a variety of ways. Id. at 241. "A party alleging a RICO violation may demonstrate continuity over a closed period by proving a series of related predicates extending over a substantial period of time. Predicate acts extending over a few week or months and threatening no future criminal conduct do not satisfy this requirement." Id. at 242. Congress, apparently, "was concerned in RICO with longterm criminal conduct." Id. If continuity cannot be established by showing longterm activity, "liability depends on whether the threat of continuity is demonstrated." Id. (emph. in original). Because "threat of continuity" depends on the specific facts of each case, it can be sufficiently established "where the predicates can be attributed to a defendant operating as part of a long-term association that exists for criminal purposes." Id. at 242-43. The continuity requirement can also be satisfied by showing "that the predicates are a regular way of conducting defendant's ongoing legitimate business (in the sense that it is not a business that exists for criminal purposes), or of conducting or participating in an ongoing and legitimate RICO 'enterprise.'" Id. at 243.
Defining an "enterprise" is therefore important. An enterprise can technically exist with only one actor to conduct it, even though it will, in most situations, be conducted by more than one person or entity. Salinas v. United States, 522 U.S. 52, 65 (1997) (dicta). The existence of a RICO enterprise is shown where
  1. there is an ongoing organization with a decision-making framework for controlling a group that remains unchanged over time
  2. various associates function as continuing unit, and
  3. enterprise is separate and apart from the pattern of racketeering activity. United States v. Sanders, 928 F.2d 940, 943 (10th Cir. 1991).