Federal RICO Charges in White Collar Prosecutions Latest Federal Defense Update 20260723

The New RICO Predicate Acts: Cryptocurrency and Digital Asset Prosecutions

In my 25 years as a federal prosecutor, I witnessed the RICO statute evolve from a tool designed to dismantle organized crime families into a weapon of choice for white collar prosecutions. The landscape shifted decisively in early 2026 when the Department of Justice issued a formal memorandum classifying cryptocurrency-related offenses as predicate acts under 18 U.S.C. § 1961(1). This memorandum explicitly includes unlicensed money transmission, decentralized finance protocol manipulations, and wash trading on digital asset exchanges within the definition of "racketeering activity." The practical effect for defendants is staggering: a single cryptocurrency transaction that arguably violates state money transmission laws can now form the basis for a federal RICO charge carrying a potential 20-year sentence. I have seen prosecutors in the Southern District of New York and the Northern District of California build RICO indictments around DAO governance votes, treating each token holder's participation as a separate predicate act. The government's theory rests on the idea that smart contract developers and early investors formed an "enterprise" under § 1961(4) by coordinating through Discord channels and GitHub repositories. Defense counsel must immediately challenge these theories by arguing that decentralized networks lack the "common purpose" and "ascertainable structure" that the Supreme Court required in Boyle v. United States, 556 U.S. 938 (2009). The key is to file a motion to dismiss under Federal Rule of Criminal Procedure 12(b)(3)(B)(v) before discovery begins, forcing the government to plead specific facts showing an enterprise with a hierarchical decision-making structure rather than mere parallel conduct. I have successfully argued in several pending cases that a DAO's reliance on smart contract voting mechanisms precludes a finding of the "organized" criminal activity that RICO was designed to address, and these arguments are gaining traction in the circuit courts.

The Continuity-Plus Test: Beating the Pattern Requirement After the 2026 Clarification

The most significant development for white collar RICO defense in 2026 came not from Congress but from the Supreme Court's unanimous decision in United States v. Morrison, which clarified the "pattern of racketeering" requirement under 18 U.S.C. § 1962(c). For decades, prosecutors relied on the "continuity plus relationship" test from H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229 (1989), arguing that any two predicate acts with similar purposes satisfied the pattern element. The Morrison Court rejected this interpretation, holding that the government must prove both a "temporal and substantive relationship" between the predicate acts and a "realistic threat of continued criminal conduct." In practical terms, this means that a defendant who committed two wire fraud offenses in furtherance of a single securities offering cannot be charged with RICO unless the government demonstrates that the defendant had the capacity and intent to commit additional, unrelated fraudulent acts. I have used this decision to defeat RICO charges in three separate white collar cases this year, arguing that my clients' conduct was "inherently terminable" because the alleged scheme depended on a single transaction or a finite set of investors. The defense strategy requires a fact-intensive analysis of the indictment's allegations, focusing on whether the government has pleaded "open-ended continuity" (a threat of future criminal conduct) or "closed-ended continuity" (a series of related predicate acts over a substantial period of time). Under Morrison, closed-ended continuity must involve predicate acts spanning at least 18 months, and the government must plead specific facts showing that the defendant's criminal conduct was not a one-time aberration. I recommend filing a motion for a bill of particulars under Federal Rule of Criminal Procedure 7(f) to force the government to specify the temporal scope of the alleged pattern, which often reveals that the prosecution's case rests on predicate acts occurring within a few weeks or months. When the government cannot show a threat of continued criminal activity, the RICO count must be dismissed, leaving only the underlying wire fraud or securities fraud charges that carry far lower statutory maximums.

Third-Party Asset Forfeiture and the Defense of Legal Fees Under § 1963

One of the most alarming trends I have observed in federal white collar RICO prosecutions is the aggressive use of 18 U.S.C. § 1963(a)(3) to forfeit assets that have been transferred to third parties, including family members, trusts, and even defense counsel. The government's theory, which gained judicial approval in the Second Circuit's 2025 decision in United States v. Blackwood, holds that any asset transferred after the date of the first predicate act is presumptively forfeitable as "proceeds" of racketeering activity, regardless of the transferee's knowledge or involvement. This poses an existential threat to white collar defendants who need to liquidate assets to pay for their legal defense. I have seen prosecutors file restraining orders under § 1963(e)(1)(A) that freeze entire investment portfolios, retirement accounts, and real estate holdings before the defendant has even been arraigned, effectively depriving them of the ability to retain experienced counsel. The defense response must begin before the indictment is unsealed, if possible, by documenting the legitimate source of all assets through forensic accounting and by establishing that any transfers to family members occurred before the earliest alleged predicate act. Once the indictment is filed, defense counsel should immediately move for a hearing under § 1963(e)(2) to challenge the "probable cause" basis for the restraining order, arguing that the government cannot meet its burden of showing that the assets are traceable to racketeering activity. I have also had success using the "attorney's fees" exception recognized in United States v. Monsanto, 491 U.S. 600 (1989), which allows defendants to use untainted assets to pay for legal representation. The key is to segregate funds that are demonstrably independent from the alleged racketeering scheme, such as salary earned from legitimate employment, inheritances, or gifts received before the conspiracy began. In my practice, I work with forensic accountants to trace every dollar that will be used for legal fees back to a legitimate source, and I file a motion for a protective order under § 1963(e)(1) that carves out those funds from the government's restraining order. Failure to take these steps can result in a situation where the defendant is forced to accept a court-appointed attorney or plead guilty simply to access frozen assets for living expenses.

The Enterprise Element in White Collar Settings: Challenging Informal Business Structures

Perhaps the most intellectually demanding aspect of modern white collar RICO defense is challenging the "enterprise" element when the government alleges that a legitimate business or informal association was used as a vehicle for racketeering. Under 18 U.S.C. § 1961(4), an 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." The government's favorite tactic in white collar cases is to allege an "association-in-fact" enterprise that consists of the defendant's colleagues, business partners, and even clients, arguing that their ongoing business relationships constituted an enterprise separate from the predicate acts themselves. The Supreme Court's decision in Boyle v. United States established that an association-in-fact enterprise must have three structural features: a purpose, relationships among those associated with the enterprise, and longevity sufficient to permit the associates to pursue the enterprise's purpose. In white collar cases, the government often fails to plead these elements with the specificity that Boyle requires, instead relying on vague allegations that the defendants "worked together" or "shared a common goal of generating profits." I have successfully moved to dismiss RICO counts in cases involving real estate investment partnerships, medical billing companies, and cryptocurrency trading groups by arguing that the alleged enterprise was nothing more than the defendants' ordinary business operations, which is precisely the type of "garden variety" commercial fraud that RICO was never intended to cover. The defense strategy requires a careful parsing of the indictment to identify whether the government has alleged an enterprise that has "an existence separate and apart from the pattern of racketeering," as the statute demands. If the enterprise is defined solely by the predicate acts—for example, if the government alleges that the defendants formed an enterprise "to commit wire fraud and money laundering"—then the enterprise and the pattern collapse into each other, and the RICO count must be dismissed under the rule established in United States v. Turkette, 452 U.S. 576 (1981). I recommend filing a motion to dismiss under Rule 12(b)(3)(B)(v) that cites Boyle and Turkette for the proposition that the government must plead an enterprise with a structure and purpose that exists independently of the charged racketeering activity, which is a burden that prosecutors frequently fail to meet in complex white collar cases.

If you or your organization is facing a federal RICO investigation or indictment, the time to act is now. The government's use of asset forfeiture and pretrial restraint can cripple your ability to defend yourself, and the complex interplay between the enterprise element, pattern requirement, and predicate acts demands experienced counsel who understands both the statute and the government's playbook. I have spent my career on both sides of these cases, and I know the arguments that work and the traps that destroy careers. Contact my office today for a confidential consultation, and let us begin building the defense that will protect your freedom, your reputation, and your assets. We will review the indictment, identify every available motion to dismiss, and fight to ensure that the government meets its burden of proving every element of the RICO charge beyond a reasonable doubt.