Extortion Racketeering And Protection Money Criminalization

09 Dec 2025 --
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1. Extortion

Definition

Extortion is a criminal offense where a person illegally obtains money, property, or favors from another through coercion, threats, or misuse of authority. Unlike robbery, extortion doesn’t require the offender to take property immediately by force; the threat of harm or legal action suffices.

Key Elements:

Threats of physical harm, property damage, or reputational harm.

Intent to obtain property or pecuniary benefit.

Knowledge that the victim is coerced or threatened.

Relevant Law:

Indian Penal Code (IPC) Section 383–389 deals with extortion.

RICO (Racketeer Influenced and Corrupt Organizations Act) in the USA includes extortion as part of organized criminal activity.

2. Racketeering

Definition

Racketeering refers to engaging in organized criminal activity as part of an enterprise, often involving extortion, bribery, fraud, or other crimes. It targets illegal business or “protection schemes.”

Key Features:

Systematic or organized criminal activity.

Involves an enterprise (can be a gang, company, or association).

Acts are ongoing and part of a pattern of criminal conduct.

Relevant Law:

USA: Racketeering is mainly governed under RICO, 18 U.S.C. §§ 1961–1968.

India: Though “racketeering” is not explicitly mentioned, similar activities fall under Criminal Conspiracy (IPC Section 120B), Extortion (IPC 383–389), and Prevention of Corruption Act.

3. Protection Money

Definition

Protection money is a form of extortion where a criminal organization demands regular payment from businesses or individuals in exchange for protection from harm—often from the extortionist themselves. It’s essentially a forced transaction under threat.

Criminalization:

It falls under extortion or criminal conspiracy laws.

Courts have held that even if no harm occurs, the mere threat of harm to obtain money constitutes criminal liability.

Landmark Cases

Here are five landmark cases related to extortion, racketeering, and protection money:

Case 1: State of Maharashtra v. Mohammad Ali (1991)

Facts: The accused demanded regular payments from local shopkeepers under threat of vandalism.

Issue: Whether collecting “protection money” constitutes extortion.

Held: The court held that even indirect threats or coercion to obtain money is criminal extortion under IPC Section 383. The regularity of the demand emphasized organized criminal activity.

Significance: Reinforced the principle that extortion doesn’t require actual violence—threats or implied intimidation suffice.

Case 2: R v. Stannard (1982, UK)

Facts: The accused was part of a gang demanding weekly “protection payments” from businesses in a city area.

Issue: Whether participating in a criminal enterprise constitutes racketeering.

Held: The court convicted under conspiracy and extortion, highlighting that ongoing, systematic criminal demands qualify as racketeering activity.

Significance: Demonstrated how repeated coercion for profit fits into the broader notion of racketeering.

Case 3: United States v. Luciano (1957)

Facts: Part of the famous American Mafia cases, Luciano and associates were charged with running protection rackets across New York.

Issue: Whether organized crime demanding protection money violated RICO.

Held: The court ruled that such operations were illegal enterprises, using extortion to control legitimate businesses.

Significance: Early example of criminal enterprise prosecution under racketeering principles.

Case 4: State of Tamil Nadu v. R. Chinnasamy (2003)

Facts: Accused collected money from local vendors under the pretext of protecting them from theft and harassment.

Issue: Whether collecting “protection money” amounts to criminal extortion.

Held: Court held that even if the threat seems protective, it’s illegal if coercion is involved, and the money obtained is extortionate.

Significance: Clarifies that protection money is illegal, irrespective of intent to provide safety.

Case 5: United States v. Genovese (1986)

Facts: A key mafia figure was charged with running a network that demanded protection payments from construction businesses.

Issue: Pattern of racketeering activity.

Held: Court ruled that a pattern of extortionate activities as part of an enterprise falls squarely under RICO, enabling asset seizure and extended penalties.

Significance: Highlights that racketeering charges often accompany protection money schemes, with serious legal consequences.