Prosecuting Cybercrimes: The Case for Making the Computer Fraud and Abuse Act a Predicate Act Under the Racketeer Influenced and Corrupt Organizations Act

During the first six months of 2021, financial services firms throughout the United States raised alarms concerning nearly $600 million of transactions that were flagged as suspected payments to perpetrators of ransomware attacks. Meanwhile, the U.S. Department of Treasury identified another $5.2 billion of potential ransomware payments that were funneled through bitcoin transactions. In total, global ransomware attacks were expected to have accounted for about $20 billion of loss in 2021 and are predicted to result in $265 billion of loss by 2031. Ransomware is just one of twenty-four different categories of internet crimes identified by the Federal Bureau of Investigation (“FBI”) in its annual Internet Crime Report, and the figures cited in the report represent only a fraction of the total amount lost to cybercrime every year. As the number of cybercriminals and the sophistication of their methods continue to grow and evolve, the true cost of cybercrime worldwide is estimated to reach a disastrous $10.5 trillion by 2025.

The scale and scope of cyberattacks have increased dramatically in recent years, spurred by a growing reliance on technology, increased connectivity among users, and the rise in popularity of virtual currency exchanges. Another contributing factor is that the very nature of cybercrime makes it difficult to block these attacks or punish those responsible. For example, cybercriminals frequently rely on a variety of techniques to hide their identities and evade detection by law enforcement, such as by operating out of the dark web or routing their activities through a virtual private network (“VPN”). The increasing use of virtual currencies also contributes to this problem by making it more difficult to trace monetary payments made by victims of cybercrime.

Prosecutions of cyberattacks have been constrained by decades-old statutes that are either inapplicable or insufficient to address rapidly changing social and technological environments that contribute to the proliferation of new cybercrimes. In addition to these challenges, many cybercriminals often reside in or flee to countries that are beyond the jurisdictional reach of the United States. In several widely publicized cases, cyberattacks were also believed to be sponsored by hostile foreign state actors. Unfortunately, many victims of these cybercrime attacks are reluctant to report them, usually due to the fact that while reporting an attack does little to address the harm caused, doing so may draw unwanted publicity or attention. Therefore, if the United States wishes to properly address the rise of cybercrime and its accompanying harm to the global economy, Congress must first pass legislation that would authorize the government to overcome these barriers and increase prosecutorial power over cybercrime.

One proposition that appeared before Congress was to expand the Racketeer Influenced and Corrupt Organizations (“RICO”) Act, codified in 18 U.S.C. §§ 1961–1968. This proposition was included in Section II of the International Cybercrime Prevention Act, which was originally presented in 2018 and was later reintroduced by a bipartisan group in June 2021. After it was referred to the U.S. Senate Committee on the Judiciary, the bill stalled and ultimately failed to pass. The status of the bill reflects the general shortage of political capital when it comes to prioritizing cybercrime despite the FBI’s characterization of “malicious cyber activity” as a threat to “the public’s safety and our national and economic security.”

To raise awareness about the threats posed by cybercrimes, this Note will analyze the proposal to expand RICO and, in particular, examine the benefits of making a violation of the Computer Fraud and Abuse Act (“CFAA”) a predicate act for RICO offenses. While a few successful prosecutions of organized cybercrime rings have already been brought under RICO, this Note will evaluate the limitations of those prosecutions when it comes to computer crimes. The Note will conclude that despite the many challenges associated with tackling cybercrime, the constructive application of RICO carries great potential in prosecuting cybercriminals.

Part I of this Note provides the historical context behind RICO and examines its role in the downfall of the American Mafia. It specifically looks at the provisions in RICO that uniquely positioned it for prosecuting organized crime groups as well as legitimate business enterprises that violated state and federal laws. Part II provides an analysis of how RICO applied to traditional organized crime groups and how cybercrime groups can fall under its broad definition of “enterprise.” It also provides further context on the rise of cybercrime and introduces examples of RICO charges that were brought against two cybercrime enterprises. Part III introduces the CFAA and points to key provisions that could be used against cybercrime. It also seeks to address criticisms of the proposal to make violations of the CFAA a predicate act under RICO and evaluates key policy considerations involved in this discussion.


The Illusory Moral Appeal of Living Constitutionalism

Two prominent theories of constitutional interpretation are originalism and living constitutionalism. One common argument for living constitutionalism over originalism is that living constitutionalism better avoids morally unjustifiable results. This Note will demonstrate that this argument is flawed because living constitutionalism lacks a definitive enough prescriptive claim as to how to interpret the United States Constitution.

Proponents of originalism assert that courts should interpret constitutional provisions in accordance with the public meaning of those provisions at the time of their enactment. One criticism of originalism is that if the Supreme Court were to faithfully apply the theory, such application leads morally unjustifiable outcomes. This criticism has two components: (1) had the Supreme Court subscribed to originalism as its interpretive method in the past, then certain outcomes, such as the banning of racial segregation in public schools in Brown v. Board of Education, would not have occurred; and (2) if the Supreme Court employs originalism in the future, the Court might issue rulings contrary to contemporary moral sensibilities. Moreover, some critics of originalism maintain that when confronted with this problem, proponents of originalism deny that its application would lead to those outcomes and stretch the theory’s meaning beyond its capacity for any meaningful constraint on interpretation, or, alternatively, they admit that they would find the morally objectionable practice unconstitutional, even if such holding would be inconsistent with the originalist method. Thus, the claim is that originalists are “faint-hearted;” that is, they either tailor the definition of originalism to conform to morally required decisions or abandon originalism when it is too much to bear. This, critics of originalism assert, indicates that originalism is not viable as a constitutional method and should be abandoned, some argue, in favor of living constitutionalism.

This Note will demonstrate the flaws in the above argument. The argument is flawed, not because it can necessarily be proven that originalism leads to more morally justifiable results than living constitutionalism, but because living constitutionalism lacks a definitive prescriptive claim to make such a comparison between the two theories possible. That is, it is impossible to identify past or hypothetical future outcomes of cases as being consistent or inconsistent with living constitutionalism. Moreover, because it is possible to do so with originalism, and thus, posit how implementing originalism could lead to morally undesirable results, living constitutionalism has an illusory moral superiority over originalism.


Respect for Marriage in U.S. Territories

The 2010s were a watershed decade for marriage equality in the United States. In 2013, the Supreme Court in United States v. Windsor struck down section 3 of the so-called Defense of Marriage Act (“DOMA”), which denied federal recognition to valid state marriages between same-sex couples. The opinion left intact section 2 of DOMA, which “allow[ed] States to refuse to recognize same-sex marriages performed under the laws of other States.” Two years after Windsor, the Supreme Court in Obergefell v. Hodges invalidated all state laws against same-sex marriage. The opinion effectively invalidated section 2 of DOMA and went one step further: states had to not merely recognize out-of-state same-sex marriages but also had to perform same-sex marriages in state as well. Obergefell brought marriage equality to every state.

Although Obergefell seemed to guarantee same-sex couples the constitutional right to marry, marriage equality became vulnerable in the summer of 2022. In addition to providing the critical fifth vote to reverse Roe v. Wade in Dobbs v. Jackson Women’s Health Organization, Justice Thomas wrote a concurrence calling for the complete repudiation of substantive due process. Ominously, he wrote “in future cases, we should reconsider all of this Court’s substantive due process precedents, including . . . Obergefell.”

Justice Thomas’s concurrence in Dobbs reinvigorated congressional efforts to pass the Respect for Marriage Act (“RFMA”), a statute that would require states to grant full faith and credit to out-of-state marriages regardless of race, gender, ethnicity, or national origin. The marriage equality movement succeeded when President Biden signed the RFMA into law in December 2022. Despite the recent controversy of Thomas’s Dobbs concurrence, the RFMA was not new legislation; versions of the RFMA had been proposed in Congress for over a decade, before either the Windsor or Obergefell opinions were issued. The RFMA did not simply codify Obergefell, as the Act does not invalidate any state’s prohibition on licensing same-sex marriage within its own borders. Instead, the RFMA effectively repealed section 2 of DOMA and affirmatively requires states to recognize same-sex marriages legally performed in other states.

Opponents of the RFMA argued that the legislation was unnecessary because Obergefell already protects marriage equality. They seem unimpressed with Justice Thomas’s shot across the bow in Dobbs. For example, one month after Justice Thomas announced his intention to reconsider and perhaps reverse Obergefell, Senator Marco Rubio belittled the RFMA as a “stupid waste of time.” Iowa Senator Chuck Grassley voted against the RFMA, asserting that the “legislation is simply unnecessary. No one seriously thinks Obergefell is going to be overturned so we don’t need legislation.” He implied that RFMA supporters were seeking “to fabricate unnecessary discontent in our nation.”

The argument that the RFMA was unnecessary because marriage equality was already the law of the land failed to appreciate how constitutional law reaches the shores of U.S. territories. Even if Justice Thomas fails in his mission to overturn Obergefell, the RFMA is still essential now to bring the protections of Obergefell to all corners of the American empire. Before the RFMA, the U.S. territory of American Samoa refused to follow Obergefell and continued to restrict marriage licenses to opposite-sex couples.

While Obergefell instantly brought marriage equality to every state, the path toward marriage rights has been more complicated in U.S. territories: American Samoa, Guam, the Commonwealth of the Northern Mariana Islands (“CNMI”), the U.S. Virgin Islands (“USVI”), and Puerto Rico.

Acquired primarily from colonial powers by purchase or as the spoils of war, U.S. territories hold a precarious position in our constitutional structure. Beginning in 1901, the Supreme Court issued a series of opinions known as the Insular Cases. This line of authority prevented constitutional rights from automatically protecting territorial residents. Instead, the Court held that “the Constitution is applicable to territories acquired by purchase or conquest, only when and so far as Congress shall so direct.” In the absence of congressional directive, the Insular rubric provides that federal courts can hold that a constitutional right applies to one or more territories when the court determines that the right is “fundamental” and that recognizing the right would not be “impracticable and anomalous” for that territory. Under this test, for example, the district court in King v. Andrusstruck down rules denying jury trials in criminal cases in American Samoa, finding that it would not be impractical and anomalous to require American Samoa to provide jury trials to criminal defendants, given the structure of the American Samoan judicial system.

Conversely, in rejecting calls to provide birthright citizenship to individuals born in American Samoa, The Court of Appeals for the D.C. Circuit in 2015 in Tuaua v. United States held that it would be “anomalous to impose citizenship over the objections of the American Samoan people themselves” and federal judges should not “forcibly impose a compact of citizenship—with its concomitant rights, obligations, and implications for cultural identity.” In 2021, the Tenth Circuit in Fitisemanu v. United States followed suit and used the Insular framework to block birthright citizenship for American Samoans.

The Fitisemanu plaintiffs petitioned the Supreme Court for certiorari. Some commentators saw the case as the perfect vehicle for challenging the Insular Cases. The hope was not far-fetched. Respected scholars advocate the reversal of the Insular Cases. Significantly, in his concurrence in United States v. Vaello Madero in April 2022, Justice Gorsuch observed the following:

A century ago in the Insular Cases, this Court held that the federal government could rule Puerto Rico and other Territories largely without regard to the Constitution. It is past time to acknowledge the gravity of this error and admit what we know to be true: The Insular Cases have no foundation in the Constitution and rest instead on racial stereotypes. They deserve no place in our law.

On October 17, 2022, however, the Supreme Court denied certiorari in Fitisemanu, thus leaving the Insular Cases intact. While not obvious at first glance, that decision has implications for marriage equality in U.S. territories.

This Article proceeds in three parts. Part I examines how the governments of the five U.S. territories responded to the Obergefell decision. Because of the Insular Cases, Obergefell did not necessarily automatically apply to the territories. Of the most concern, the territorial government of American Samoa has refused to recognize either Obergefell or marriage equality. Part II explains how the RFMA provides a partial solution to the problem created by the Insular Cases. It discusses the unappreciated significance of the RFMA for residents of U.S. territories. The RFMA brings a form of marriage equality to American Samoa for the first time. Less historic, but also important, the RFMA would ensure the continuation of marriage equality in those U.S. territories where the right to same-sex marriage is currently recognized but uniquely vulnerable because of the Insular Cases. Part III exposes some of the limitations of the RFMA. For example, the RFMA requires that states and territories provide full faith and credit to marriages legally performed in other states and territories; same-sex couples still cannot get legally married in American Samoa. They must leave home to get married, a burden not imposed on opposite-sex couples.


Cost-Benefit Analysis Without the Benefits or the Analysis: How Not to Draft Merger Guidelines

Previous iterations of the DOJ/FTC Merger Guidelines have articulated a clear, rigorous, and transparent methodology for balancing the procompetitive benefits of mergers against their anticompetitive costs. By describing agency practice, clear guidelines deter anticompetitive mergers while encouraging procompetitive ones, ensure consistent and reasonable enforcement, increase public understanding and confidence, and promote international cooperation.

But the 2023 Draft Merger Guidelines do not. They go to great lengths to articulate the potential anticompetitive costs of mergers but with no way to gauge “substantiality.” Most significantly, they ignore potential benefits of mergers, which eliminates the need for balancing. In other words, the Draft Guidelines provide very little guidance about current practice, which increases enforcement risk and thus deters mergers, which may be the point of the Draft Guidelines. In this Article, we offer specific recommendations that do a better job differentiating pro- from anticompetitive horizontal, vertical, and tech mergers.


Chinese State Capitalism and the Holding Foreign Companies Accountable Act

In an age of unicorns that “[m]ove fast and break things,”Chinese startup Luckin Coffee Inc. (“Luckin Coffee” or “Luckin”) moved at exceptional speed. Founded in October 2017, the Chinese Starbucks-equivalent grew from a single Beijing location to nearly 4,400 self-operated stores, over 1,600 partnership stores, and about 1,100 Luckin Coffee “EXPRESS” machines in over 220 cities in China by the end of 2021. Yet while the company was achieving tremendous growth—quickly overtaking Starbucks as the leading coffee chain in China—company management attempted to make the company appear even more successful through a series of fraudulent financial statements. Among other things, company executives created a “fake operations database,” altered bank records, and engaged in sham sales designed to create the appearance of faster growth, while simultaneously hiding their misconduct from regulators and their own finance department. The company overstated its revenues by 27% in the second quarter of 2019, and by 45% in the third quarter of 2019, while also understating its net losses for those quarters by 15% and 34%, respectively.

Luckin provided these false statements in earnings calls with investors and in filings with the U.S. Securities and Exchange Commission (“SEC”), including offering documents for its 2020 initial public offering of $418 million in stock and its convertible bond issuance of $446.7 million. However, some investors were suspicious, and a “cryptic email” sent to numerous short sellers in January, 2020, warned that a “new generation of Chinese Fraud 2.0 has emerged,” with “[c]ompanies that start off as fundamentally and structurally flawed business model [sic] that evolves into fraud.” The email offered to share customer receipts and videos from Luckin locations, and included an eighty-nine-page report about the company that the anonymous sender suggested could be published under the name of one of the short sellers. Carson Block, an investor and founder of Muddy Waters LLC, posted the report on Twitter on January 31, 2020.

The stock price hardly moved after the posting, with much of the information in the report seemingly having already been impounded into the market price before it was broadly disseminated. But the stock took a tumble several weeks later as new information emerged and the full extent of the scandal began to take shape. Among other things, investigations later revealed that Luckin executives engaged in conflicted transactions, such as the sale of vouchers for tens of millions of cups of coffee to companies tied to Luckin’s controlling shareholder and chairman, Charles Lu.

Luckin Coffee’s fraud was a large but not unusual kind of corporate scandal. Similar (and even larger) accounting scandals contributed to the bursting of the Dot-Com Bubble in 2000, including frauds at HealthSouth, Tyco, WorldCom, and Enron. As a result of these scandals, Congress passed the Sarbanes-Oxley Act of 2002, which imposed a series of measures designed to ensure that corporate financial statements are accurate and fairly present the financial position of the company. Part of these regulations included the creation of a new quasi-governmental regulator, the Public Company Accounting Oversight Board (“PCAOB”), which was designed to scrutinize the auditors who themselves scrutinize the financial statements of public companies. For the PCAOB to properly perform its work in protecting against accounting frauds, it must have access to the information that the auditors used to perform their audits.

The PCAOB’s access requirement brings the PCAOB in conflict with recently enacted Chinese law and policy, which not only limits what Chinese companies can share with external parties but also formally prohibits their cooperation with the PCAOB. In response to China upping the ante in a high-stakes game of sovereignty over financial regulation, the United States recently played its strongest hand: the SEC, at the direction of Congress, blacklisted Chinese companies listed on U.S. securities exchanges, threatening them with expulsion from U.S. securities markets unless the Chinese government allows access to the PCAOB. The blacklisting regulation, promulgated under the Holding Foreign Companies Accountable Act (“HFCAA” or “the Act”), includes not only suspect companies like Luckin Coffee but also any company headquartered in China and operating under Chinese law. Further, preventing accounting fraud is only part of the purpose of the HFCAA, and a fulsome understanding of the Act requires consideration of the political, economic, and regulatory context from which the Act emerged.

The HFCAA gambit seems to have been successful, as Chinese regulators recently agreed to allow PCAOB officials review audit records in Hong Kong—though some practitioners are skeptical that the agreement reached between Chinese and U.S. regulators will ultimately hold. Much is at stake because, while the HFCAA helps protect investors against accounting frauds of the type Luckin is alleged to have committed, the effects of the Act are subtler and more far-reaching, and the Act’s purpose in blacklisting foreign companies is as much (if not more) about foreign policy as it is about investor protection.

This Essay examines market blacklisting—a term the Essay uses to describe extraordinary government restrictions that limit a corporation’s ability to trade freely in U.S. markets—as a regulatory tool used to deny the benefits of U.S. markets to Chinese firms. Analyzing and recharacterizing the recently enacted HFCAA as a foreign-policy-oriented regulation, this Essay argues that jarring and serious accounting frauds such as Luckin’s are not the most important—or even primary—target of the Act. While capital markets blacklisting operates in opposition to the traditionally open posture of U.S. financial markets, blacklisting can also serve to achieve strategic foreign policy goals. In particular, the passage of the HFCAA demonstrates that, in response to recent Chinese investment activity, the United States increasingly considers its financial markets as a rivalrous national resource and is becoming less willing to share that resource with its greatest economic competitor.


The Double Jeopardy Clause and Successive Prosecutions by Separate Sovereigns for the Same Act

Under the so-called dual sovereignty doctrine (“DSD”), the Fifth Amendment’s Double Jeopardy Clause (“DJC”) is not implicated by successive prosecutions brought by separate sovereigns against the same defendant for the same act. For example, if a defendant is prosecuted first by the federal government for a certain crime, that defendant’s right not “to be twice put in jeopardy of life or limb” for the same offence does not protect him against a subsequent prosecution by a state government for a crime involving the same conduct. As the Court put it in the recent case of Gamble v. United States, “a crime under one sovereign’s laws is not ‘the same offence’ as a crime under the laws of another sovereign.”

I argue in this Article that this DSD errs in two respects, one of which has drawn a bit of attention, and one of which has gone entirely unnoticed in the cases and academic literature. First, as suggested by Justices Ginsburg and Gorsuch in their separate Gamble dissents, and as I elaborate, the DSD rests on a mistaken originalist view of how successive prosecutions by separate sovereigns were regarded at common law; consequently, the inference as to how the eighteenth-century English doctrine applies to the United States, which rests on a concept of divided sovereignty alien to the common law, is fundamentally flawed.

Second, the current and longstanding view of the DJC assesses whether that Clause is implicated by focusing on whether the same offense (or conduct) forms the basis for successive prosecutions by separate sovereigns. I offer an entirely different methodology that does not depend (as does this orthodox view) on an unsound originalist analysis. Rather than focusing on what a defendant did or how a sovereign has defined an offense, the better approach to determining whether successive prosecutions by separate sovereigns violate the DJC is to focus on what the jury found. The methodology I propose hones in on the elements of the crime with which a criminal defendant is charged in the initial prosecution because the outcome of that trial will turn on the factfinder’s evaluation of those elements. To my knowledge, nobody has previously proposed this approach to analyzing double jeopardy challenges to successive prosecutions brought by separate sovereigns.

My starting point is the Supreme Court’s recent decision in Gamble, which I summarize in Part I. Next, in Part II, I identify what I refer to as the twin errors that animate the Gamble holding, one entirely historical, and the other primarily analytical. In Part III, I propose a new methodology for examining whether successive prosecutions violate the DJC; I refer to this methodology as an “elements-based approach.” In Part IV, I compare the analytical method outlined in Part III with Gamble itself and illustrate how Gamble would have been decided using an elements-based approach. In Part V, I turn to the principles of issue preclusion and full faith and credit and argue that an elements-based approach to double jeopardy analysis is symmetrical to a similar inquiry in the civil domain. Finally, I conclude by pointing to the DJC-DSD cases the courts have adjudicated over the past two decades, and I ask how consequential the modification I sketch would be on criminal defendants.


Climate, Controversy, and Courts

The Supreme Court’s 2022 decision in West Virginia v. EPA, along with other recent cases in which federal courts have grappled with the ongoing climate crisis, offers an opportunity to assess the role of the judiciary in helping the United States adopt effective responses to monumental threats such as the climate crisis. Courts reviewing legislative and executive actions must find ways to enforce constitutional limits without preventing the political branches from implementing effective policy responses to potentially catastrophic problems. Three relatively recent climate cases—West Virginia v. EPA, Utility Air Regulatory Group v. EPA, and Juliana v. United States—illustrate the need for courts to balance their competing obligations. In West Virginia and in Juliana, courts lost their balance, disregarding practical consequences in West Virginia and neglecting institutional limits in Juliana. Utility Air Regulatory Group, despite other shortcomings, emerges as the best example of a court striking the proper balance between its dual responsibilities. The fact that Justice Scalia, an ideologically conservative Justice, could write an opinion that constrained EPA’s regulatory authority without impairing the effectiveness of the agency’s policy supplies some basis for optimism that courts can play a constructive role in supporting the development of practical solutions to pressing problems. West Virginia, by contrast, provides a discouraging cautionary example of a court thoroughly out of balance.


Prosecutorial Authority and Abortion

In the wake of Dobbs, abortion is now unlawful in many states. States that prohibit abortion use their regulatory authority, civil justice systems, and criminal law to do so. Presumably, many of the activists and politicians who have been fighting to ban abortion will want to see that outlawing abortion is effective at reducing the incidence of abortion in fact. Once abortion is unlawful in a state, some pro-life partisans will also want those who perform or assist abortions to be criminally punished.

This Essay identifies a serious procedural obstacle to the use of the criminal law against abortion in a post-Dobbs world: exclusive local authority to bring criminal prosecutions. The obstacle is constitutional in a small number of states, but one of those states, Texas, is the most populous state where abortion is now illegal. In these states, only local, autonomous prosecutors (district attorneys and county attorneys) can pursue indictments or file informations to commence criminal cases. Prosecutorial localism is enshrined in the Texas Constitution.

Inside the borders of states that do not allow their attorneys general to initiate prosecutions, criminal law against abortion will be a dead letter in certain urban and suburban counties as pro-choice electorates pick prosecutors who will not bring abortion prosecutions. For politicians in states like Texas with well-entrenched Republican leadership at the statewide level, the pressure to act forcefully against abortion will be immense, but without changes to jurisdictional laws, Republican attorneys general will be unable to enforce abortion bans through criminal law. At the same time, the pressure on Democratic county and district attorneys not to enforce the abortion laws will be equally immense. The outcome may be highly contentious constitutional litigation to revisit old understandings about the allocation of authority between state and local elected officials, as well as efforts in state legislatures to amend statutes and constitutional provisions that mandate localism in criminal procedure.

This brief Essay adds to the growing literature on criminal procedure in a post-Dobbs world. Those prosecuted for performing or having abortions who have lost the Fourteenth Amendment’s shield for the procedure itself will still be protected by the Fourth, Fifth, and Sixth Amendments, as well as broader common law traditions and workaday rules of criminal trials in their states. For instance, Peter Salib and Guha Krishnamurthi have already pointed out the deterrent effect of jury nullification on abortion prosecutions.

This Essay closes by recognizing that criminal prosecutions are not the only tool that pro-life leaders at the state level have to promulgate antiabortion policy. The fact that those involved with abortion in some “blue” counties in some “red” states will be safe from criminal prosecution will not restore the pre-Dobbs status quo. Rather, the likely result in these counties is a kind of gray market condition where unlicensed providers of medication abortions will be able to operate while licensed professionals and established clinics will be kept closed by the threat of regulatory fine, license revocation, and civil liability. And of course, this assumes that pro-life politicians and voters do not quickly amend state laws—even state constitutions—to permit attorneys general to prosecute abortion.