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In the case of Bob Reves, et al. v. Ernst & Young in 1992, the U.S Supreme Court ruled on whether an accounting firm could be held liable under RICO (Racketeer Influenced and Corrupt Organizations Act) for its role in a client's fraudulent activities. The Farmers Cooperative of Arkansas and Oklahoma had hired Ernst & Young to audit their financial statements; however, they were later accused of participating in a scheme that defrauded investors by misrepresenting the cooperative's financial condition. The court found that while accountants can potentially be held accountable under RICO if they participate directly or indirectly in conducting an enterprise’s affairs through racketeering activity, it was not applicable here as Ernst & Young did not have primary responsibility for the business' operation or management - merely providing professional services does not equate to 'conducting or participating' in such operations. Therefore, Ernst & Young was deemed not liable under RICO.
In the dissenting opinion for Bob Reves, et al. v. Ernst & Young, Justice Blackmun argued that the majority's decision to apply a "management and operation" test in determining whether an accounting firm could be held liable under RICO was too restrictive. He contended that this interpretation of section 1962(c) of RICO ignored Congress' intent to broadly combat organized crime's infiltration into legitimate businesses through any means necessary, including fraud or deceit by outside professionals such as accountants or lawyers. Furthermore, he disagreed with the majority’s view that only those who participate in operating or managing an enterprise can violate section 1962(c). Instead, he believed anyone involved in conducting its affairs should be included within its scope. Thus, according to him if a defendant participates directly in the commission of predicate acts in a manner which contributes to the conduct of an enterprise’s affairs then they are subject to liability under RICO.