The Collaborative International Dictionary of English v.0.48:

Blackmail \Black"mail`\, v. t. [imp. & p. p. Blackmailed; p.
   pr. & vb. n. Blackmailing.]
   To extort money from by exciting fears of injury other than
   bodily harm, as injury to reputation, distress of mind, etc.;
   as, to blackmail a merchant by threatening to expose an
   alleged fraud. [U. S.]
   [1913 Webster]