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$77.8 Million RICO Award Gets Two-Thirds Reduction

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By Jonathan R. Tung, Esq. on August 10, 2016 6:57 AM

The Seventh Circuit has concluded that RICO does not apply to the 2014 conviction of disgraced Gov. Rod Blagojevich because there was "no specific threat" of a scheme existing at the time.

The result is that the $77.8 million that had been awarded to a casino group would get the haircut of the century: a reduction to $25 million.

The Casinos' Case

The casinos had presented enough evidence to support a reasonable jury finding that Blagojevich sold his signature in 2008 by signing a bill that favored the Balmoral Racing Club and Maywood Park Trotting Association in exchange for some $250,000 in donations to the governor's campaign.

Under RICO, the plaintiffs would have to show a number of facts before the trebling of damages could attach. But in the opinion of the circuit, the petitioners failed to do just that.

It's true, the circuit said, that a reasonable jury could find that that John Johnston of the Balmoral Racing Club had violated that element of the federal statute. His intent and agreement to enter into a pay-for-play arrangement with Blagojevich could meet at least a few of the predicated prongs. Overall, the totality of the facts indicated that all manner of quid-pro-quo was envisioned by the parties.

"No Specific Threat"

But the casinos failed to show that the conspiring parties agreed to engage in a continued pattern of racketeering. "Once Blagojevich signed the bill, the scheme was over," the court wrote. "No specific threat of repetition existed."

"Continuity limits RICO to schemes meant to exist over a period of time, not one-off crimes," Hamilton wrote. To give an example of continued scheming that would meet the RICO standards, the court presented the example of monthly "insurance" that resembled a protection-racket.

Lawyers for the casinos indicated that no appeal will be sought and that the case will stop at this stage of litigation.

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