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UNITED STATES CODE SERVICE
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TITLE 18. CRIMES AND CRIMINAL PROCEDURE
PART I. CRIMES
CHAPTER 96. RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS
Go to the United States Code Service Archive Directory
18 USCS § 1961
Review expert commentary from The National Institute for Trial Advocacy
§ 1961. Definitions
As used in this chapter [18 USCS §§ 1961 et seq.]-(1) "racketeering activity" means (A) any act or threat involving murder, kidnapping, gambling, arson, robbery, bribery, extortion, dealing in obscene matter, or dealing in a controlled substance or listed chemical (as defined in section
102 of the Controlled Substances Act [21 USCS § 802]), which is chargeable under State law and punishable by imprisonment for more than one year; (B) any act which is indictable under any of the following provisions of title 18,
United States Code: Section 201 [18 USCS § 201] (relating to bribery), section 224 [18 USCS § 224] (relating to sports
bribery), sections 471, 472, and 473 [18 USCS §§ 471, 472, and 473] (relating to counterfeiting), section 659 [18 USCS
§ 659] (relating to theft from interstate shipment) if the act indictable under section 659 [18 USCS § 659] is felonious,
section 664 [18 USCS § 664] (relating to embezzlement from pension and welfare funds), sections 891-894 [18 USCS
§§ 891 through 894] (relating to extortionate credit transactions), section 1028 [18 USCS § 1028] (relating to fraud and
related activity in connection with identification documents), section 1029 [18 USCS § 1029] (relating to fraud and related activity in connection with access devices), section 1084 [18 USCS § 1084] (relating to the transmission of gambling information), section 1341 [18 USCS § 1341] (relating to mail fraud), section 1343 [18 USCS § 1343] (relating to
wire fraud), section 1344 [18 USCS § 1344] (relating to financial institution fraud), section 1425 [18 USCS § 1425] (relating to the procurement of citizenship or nationalization unlawfully), section 1426 [18 USCS § 1426] (relating to the
reproduction of naturalization or citizenship papers), section 1427 [18 USCS § 1427] (relating to the sale of naturalization or citizenship papers), sections 1461-1465 [18 USCS §§ 1461 through 1465] (relating to obscene matter), section
1503 [18 USCS § 1503] (relating to obstruction of justice [influencing or injuring officer or juror generally]), section
1510 [18 USCS § 1510] (relating to obstruction of criminal investigations), section 1511 [18 USCS § 1511] (relating to
the obstruction of State or local law enforcement), section 1512 [18 USCS § 1512] (relating to tampering with a witness,
victim, or an informant), section 1513 [18 USCS § 1513] (relating to retaliating against a witness, victim, or an informant), section 1542 [18 USCS § 1542] (relating to false statement in application and use of passport), section 1543 [18
USCS § 1543] (relating to forgery or false use of passport), section 1544 [18 USCS § 1544] (relating to misuse of passport), section 1546 [18 USCS § 1546] (relating to fraud and misuse of visas, permits, and other documents), sections
1581-1592 [18 USCS §§ 1581-1592] (relating to peonage, slavery, and trafficking in persons)[.], section 1951 [18 USCS
§ 1951] (relating to interference with commerce, robbery, or extortion), section 1952 [18 USCS § 1952] (relating to
racketeering), section 1953 [18 USCS § 1953] (relating to interstate transportation of wagering paraphernalia), section
1954 [18 USCS § 1954] (relating to unlawful welfare fund payments), section 1955 [18 USCS § 1955] (relating to the
prohibition of illegal gambling businesses), section 1956 [18 USCS § 1956] (relating to the laundering of monetary instruments), section 1957 [18 USCS § 1957] (relating to engaging in monetary transactions in property derived from
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specified unlawful activity), section 1958 [18 USCS § 1958] (relating to use of interstate commerce facilities in the
commission of murder-for-hire), section 1960 [18 USCS § 1960] (relating to illegal money transmitters), sections 2251,
2251A, 2252, and 2260 [18 USCS §§ 2251, 2251A, 2252, and 2260] (relating to sexual exploitation of children), sections 2312 and 2313 [18 USCS §§ 2312 and 2313] (relating to interstate transportation of stolen motor vehicles), sections 2314 and 2315 [18 USCS §§ 2314 and 2315] (relating to interstate transportation of stolen property), section 2318
[18 USCS § 2318] (relating to trafficking in counterfeit labels for phonorecords, computer programs or computer program documentation or packaging and copies of motion pictures or other audiovisual works), section 2319 [18 USCS §
2319] (relating to criminal infringement of a copyright), section 2319A [18 USCS § 2319A] (relating to unauthorized
fixation of and trafficking in sound recordings and music videos of live musical performances), section 2320 [18 USCS
§ 2320] (relating to trafficking in goods or services bearing counterfeit marks), section 2321 [18 USCS § 2321] (relating
to trafficking in certain motor vehicles or motor vehicle parts), sections 2341-2346 [18 USCS §§ 2431 through 2346]
(relating to trafficking in contraband cigarettes), sections 2421-24 [18 USCS §§ 2421 through 24] (relating to white
slave traffic), sections 175-178 [18 USCS §§ 175-178] (relating to biological weapons), sections 229-229F [18 USCS §§
229-229F] (relating to chemical weapons), section 831 [18 USCS § 831] (relating to nuclear materials), (C) an act
which is indictable under title 29, United States Code, section 186 [18 USCS § 186] (dealing with restrictions on payments and loans to labor organizations) or section 501(c) [18 USCS § 501(c)] (relating to embezzlement from union
funds), (D) any offense involving fraud connected with a case under title 11 (except a case under section 157 of this title
[18 USCS § 157]), fraud in the sale of securities, or the felonious manufacture, importation, receiving, concealment,
buying, selling, or otherwise dealing in a controlled substance or listed chemical (as defined in section 102 of the Controlled Substances Act [21 USCS § 802]), punishable under any law of the United States, (E) any act which is indictable
under the Currency and Foreign Transactions Reporting Act, (F) any act which is indictable under the Immigration and
Nationality Act, section 274 [8 USCS § 1324] (relating to bringing in and harboring certain aliens), section 277 [8 USCS
§ 1327] (relating to aiding or assisting certain aliens to enter the United States), or section 278 [8 USCS § 1328] (relating to importation of alien for immoral purpose) if the act indictable under such section of such Act was committed for
the purpose of financial gain, or (G) any act that is indictable under any provision listed in section 2332b(g)(5)(B) [18
USCS § 2332b(g)(5)(B)];
(2) "State" means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any
territory or possession of the United States, any political subdivision, or any department, agency, or instrumentality
thereof;
(3) "person" includes any individual or entity capable of holding a legal or beneficial interest in property;
(4) "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;
(5) "pattern of racketeering activity" requires at least two acts of racketeering activity, one of which occurred after
the effective date of this chapter and the last of which occurred within ten years (excluding any period of imprisonment)
after the commission of a prior act of racketeering activity;
(6) "unlawful debt" means a debt (A) incurred or contracted in gambling activity which was in violation of the law of
the United States, a State or political subdivision thereof, or which is unenforceable under State or Federal law in whole
or in part as to principal or interest because of the laws relating to usury, and (B) which was incurred in connection with
the business of gambling in violation of the law of the United States, a State or political subdivision thereof, or the
business of lending money or a thing of value at a rate usurious under State or Federal law, where the usurious rate is at
least twice the enforceable rate;
(7) "racketeering investigator" means any attorney or investigator so designated by the Attorney General and charged
with the duty of enforcing or carrying into effect this chapter [18 USCS §§ 1961 et seq.];
(8) "racketeering investigation" means any inquiry conducted by any racketeering investigator for the purpose of
ascertaining whether any person has been involved in any violation of this chapter [18 USCS §§ 1961 et seq.] or of any
final order, judgment, or decree of any court of the United States, duly entered in any case or proceeding arising under
this chapter [18 USCS §§ 1961 et seq.];
(9) "documentary material" includes any book, paper, document, record, recording, or other material; and
(10) "Attorney General" includes the Attorney General of the United States, the Deputy Attorney General of the
United States, the Associate Attorney General of the United States, any Assistant Attorney General of the United States,
or any employee of the Department of Justice or any employee of any department or agency of the United States so
designated by the Attorney General to carry out the powers conferred on the Attorney General by this chapter [18 USCS
§§ 1961 et seq.]. Any department or agency so designated may use in investigations authorized by this chapter [18
USCS §§ 1961 et seq.] either the investigative provisions of this chapter [18 USCS §§ 1961 et seq.] or the investigative
power of such department or agency otherwise conferred by law.
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HISTORY:
(Added Oct. 15, 1970, P.L. 91-452, Title IX, § 901(a), 84 Stat. 941; Nov. 2, 1978, P.L. 95-575, § 3(c), 92 Stat. 2465;
Nov. 6, 1978, P.L. 95-598, Title III, § 314(g), 92 Stat. 2677; Oct. 12, 1984, P.L. 98-473, Title II, Ch IX, § 901(g), Ch X,
Part N, § 1020, 98 Stat. 2136, 2143; Oct. 25, 1984, P.L. 98-547, Title II, § 205(1), (2), 98 Stat. 2770; Oct. 27, 1986, P.L.
99-570, Title I, Subtitle H, § 1365(b), 100 Stat. 3207-35; Nov. 10, 1986, P.L. 99-646, § 50(a), 100 Stat. 3605; Nov. 18,
1988, P.L. 100-690, Title VII, Subtitle B, §§ 7013, 7020(c), 7032, 7054, Subtitle N, Ch 1, § 7514, 102 Stat. 4395, 4396,
4398, 4402, 4489; Aug. 9, 1989, P.L. 101-73, Title IX, Subtitle F, § 968, 103 Stat. 506; Nov. 29, 1990, P.L. 101-647,
Title XXXV, § 3560, 104 Stat. 4927; Sept. 13, 1994, P.L. 103-322, Title IX, Subtitle A, § 90104, Title XVI, §
160001(f), Title XXXIII, § 330022(1), 108 Stat. 1987, 2037, 2051; Oct. 22, 1994, P.L. 103-394, Title III, § 312(b), 108
Stat. 4140; April 24, 1996, P.L. 104-132, Title IV, Subtitle D, § 433, 110 Stat. 1274; July 2, 1996, P.L. 104-153, § 3,
110 Stat. 1386; Sept. 30, 1996, P.L. 104-208, Div C, Title II, Subtitle A, § 202, 110 Stat. 3009-565; Oct. 11, 1996, P.L.
104-294, Title VI, §§ 601(b)(3), (i)(3), 604(b)(6), 110 Stat. 3499, 3501, 3506; Oct. 26, 2001, P.L. 107-56, Title VIII, §
813, 115 Stat. 382.)
(As amended Nov. 2, 2002, P.L. 107-273, Div B, Title IV, § 4005(f)(1), 116 Stat. 1813; Dec. 19, 2003, P.L. 108-193,
§ 5(b), 117 Stat. 2879; Dec. 17, 2004, P.L. 108-458, Title VI, Subtitle I, § 6802(e), 118 Stat. 3767; Jan. 10, 2006, P.L.
109-164, Title I, § 103(c), 119 Stat. 3563; March 9, 2006, P.L. 109-177, Title IV, § 403(a), 120 Stat. 243.)
HISTORY; ANCILLARY LAWS AND DIRECTIVES
References in text:
The "Currency and Foreign Transactions Reporting Act", referred to in para. (1) of this section, is Act Oct. 26, 1970,
P.L. 91-508, which was repealed in the general revision of Title 31 USCS. For similar provisions, see 31 USCS §§ 5311
et seq.
The "effective date of this chapter", referred to in para. (5), is October 15, 1970.
Explanatory notes:
In para. (1), "influencing or injuring officer or juror generally" has been inserted in brackets to indicate the language
probably intended by Congress.
In para. (1), the period has been enclosed in brackets to indicate the probable intent of Congress to delete it.
Amendments:
1978. Act Nov. 2, 1978 (effective 11/2/78, as provided by § 4(a) of that Act, which appears as 18 USCS § 2341 note), in
para. (1)(B), added "sections 2341-2346 (relating to trafficking in contraband cigarettes),".
Act Nov. 6, 1978 (effective 10/1/79, as provided by § 402(a) of such Act, which appears as a note preceding 11
USCS § 101), in para. (1)(D) substituted "fraud connected with a case under title 11" for "bankruptcy fraud".
1984. Act Oct. 12, 1984, in para. (1), in cl. (A), inserted "dealing in obscene matter,", in cl. (B), inserted "sections
1461-1465 (relating to obscene matter),", in cl. (C), deleted "or" following "(relating to embezzlement from union
funds),", in cl. (D), inserted ", or" following "United States", and added cl. (E).
Act Oct. 25, 1984, in para. (1)(B), inserted "sections 2312 and 2313 (relating to interstate transportation of stolen
motor vehicles),", and inserted "section 2320 (relating to trafficking in certain motor vehicles or motor vehicle parts),".
1986. Act Oct. 27, 1986, in para. (1)(B), inserted "section 1956 (relating to the laundering of monetary instruments),
section 1957 (relating to engaging in monetary transactions in property derived from specified unlawful activity),".
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Act Nov. 10, 1986, as amended Act Nov. 18, 1988, P.L. 100-690, § 7013, in para. (1)(B), inserted "section 1512 (relating to tampering with a witness, victim, or an informant), section 1513 (relating to retaliating against a witness, victim, or an informant),".
1988. Act Nov. 18, 1988, in para. (1)(B), inserted ", section 1029 (relative to fraud and related activity in connection
with access devices)" inserted ", section 1958 (relating to use of interstate commerce facilities in the commission of
murder-for-hire), sections 2251-2252 (relating to sexual exploitation of children)", inserted "sections 2251 through 2252
(relating to sexual exploitation of children),", and substituted "section 2321" for "section 2320"; and, in para. (10), inserted "the Associate Attorney General of the United States,".
Section 7013 of such Act further amended the directory language of Act Oct. 27, 1986, P.L. 99-646 without amending the text of this section.
1989. Act Aug. 9, 1989, in para. (1)(B), inserted "section 1344 (relating to financial institution fraud),".
1990. Act Nov. 29, 1990, in para. (1), substituted "section 1029 (relating" for "section 1029 (relative" and deleted "sections 2251 through 2252 (relating to sexual exploitation of children)," preceding "sections 2312 and 2313".
1994. Act Sept. 13, 1994, in para. (1), substituted "kidnapping" for "kidnaping", substituted "a controlled substance or
listed chemical (as defined in section 102 of the Controlled Substances Act)" for "narcotic or other dangerous drugs" in
two places.
Such Act further, as amended by Act Oct. 11, 1996 (effective on 9/12/94, pursuant to § 604(d) of such Act, which
appears as 18 USCS § 13 note), in para. (1), substituted "2251, 2251A, 2252, and 2258" for "2251-2252".
Act Oct. 22, 1994 (effective on enactment and inapplicable with respect to cases commenced prior to enactment, as
provided by § 702 of such Act, which appears as 11 USCS § 101 note), in para. (1)(D), inserted "(except a case under
section 157 of that title)".
1996. Act April 24, 1996, in para. (1), inserted "section 1028 (relating to fraud and related activity in connection with
identification documents) if the act indictable under section 1028 was committed for the purpose of financial gain,",
inserted "section 1542 (relating to false statement in application and use of passport) if the act indictable under section
1542 was committed for the purpose of financial gain, section 1543 (relating to forgery or false use of passport) if the
act indictable under section 1543 was committed for the purpose of financial gain, section 1544 (relating to misuse of
passport) if the act indictable under section 1544 was committed for the purpose of financial gain, section 1546 (relating
to fraud and misuse of visas, permits, and other documents) if the act indictable under section 1546 was committed for
the purpose of financial gain, sections 1581-1588 (relating to peonage and slavery),", and deleted "or" before "(E)".
Such Act further purported to amend para. (1) by inserting before the period at the end ", or (F) any act which is indictable under the Immigration and Nationality Act, section 274 (relating to bringing in and harboring certain aliens),
section 277 (relating to aiding or assisting certain aliens to enter the United States), or section 278 (relating to importation of alien for immoral purpose) if the act indictable under such section of such Act was committed for the purpose of
financial gain"; however, the matter was inserted before the concluding semicolon in order to effectuate the probable
intent of Congress.
Act July 2, 1996, in para. (1)(B), inserted ", section 2318 (relating to trafficking in counterfeit labels for
phonorecords, computer programs or computer program documentation or packaging and copies of motion pictures or
other audiovisual works), section 2319 (relating to criminal infringement of a copyright), section 2319A (relating to
unauthorized fixation of and trafficking in sound recordings and music videos of live musical performances), section
2320 (relating to trafficking in goods or services bearing counterfeit marks)".
Act Sept. 30, 1996, in para. (1), deleted "if the act indictable under section 1028 was committed for the purpose of
financial gain" following "identification documents)", inserted "section 1425 (relating to the procurement of citizenship
or nationalization unlawfully), section 1426 (relating to the reproduction of naturalization or citizenship papers), section
1427 (relating to the sale of naturalization or citizenship papers),", deleted "if the act indictable under section 1542 was
committed for the purpose of financial gain" following "(relating to false statement in application and use of passport)",
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deleted "if the act indictable under section 1543 was committed for the purpose of financial gain" following "(relating to
forgery or false use of passport)", deleted "if the act indictable under section 1544 was committed for the purpose of
financial gain" following "(relating to misuse of passport)", and deleted "if the act indictable under section 1546 was
committed for the purpose of financial gain" following "(relating to fraud and misuse of visas, permits, and other documents)".
Act Oct. 11, 1996, in para. (1), in cl. (B), substituted "2260" for "2258" and, in cl. (D), substituted "this title" for
"that title".
Such Act further (effective on 9/13/94, pursuant to § 604(d) of such Act, which appears as 18 USCS § 13 note)
amended the directory language of Act Sept. 13, 1994 without affecting the text of this section.
2001. Act Oct. 26, 2001, in para. (1), substituted "(F)" for "or (F)"
Such Act further, as amended by Act Nov. 2, 2002 (effective 10/26/2001, as provided by § 4005(f)(1) of Act Nov. 2,
2002), purported to amend para. (1) by inserting ", or (G) any act that is indictable under any provision listed in section
2332b(g)(5)(B)" before the period at the end; however, the matter was inserted before the concluding semicolon in order
to effectuate the probable intent of Congress.
2002. Act Nov. 2, 2002 (effective 10/26/2001, pursuant to § 4005(f)(1) of such Act), amended the directory language of
Act Oct. 26, 2001 without affecting the text of this section.
2003. Act Dec. 19, 2003, in para. (1)(B), substituted "sections 1581-1591 (relating to peonage, slavery, and trafficking
in persons)." for "sections 1581-1588 (relating to peonage and slavery)". Although the Act purported to amend section
1961(1)(A), the amendment was executed to para. (1)(B) of this section in order to effectuate the probable intent of
Congress.
2004. Act Dec. 17, 2004, in para. (1)(B), inserted "sections 175-178 (relating to biological weapons), sections 229-229F
(relating to chemical weapons), section 831 (relating to nuclear materials),".
2006. Act Jan. 10, 2006, in para. (1)(B), substituted "1581-1592" for "1581-1591".
Act March 9, 2006, in para. (1)(B), inserted "section 1960 (relating to illegal money transmitters),".
Short titles:
Act Oct. 15, 1970, P.L. 91-452, § 1, 84 Stat. 922, provides: "This Act may be cited as the 'Organized Crime Control
Act of 1970'.". For full classification of such Act, consult USCS Tables volumes.
Act Oct. 12, 1984, P.L. 98-473, Title II, Ch III, § 301, 98 Stat. 2040, provides: "This title [probably intended to be
"chapter"] may be cited as the 'Comprehensive Forfeiture Act of 1984'.". For full classification of such Title (Chapter),
consult USCS Tables volumes.
Other provisions:
Congressional statement of findings and purpose. Act Oct. 15, 1970, P.L. 91-452, § 1, 84 Stat. 922, provided:
"The Congress finds that (1) organized crime in the United States is a highly sophisticated, diversified, and widespread
activity that annually drains billions of dollars from America's economy by unlawful conduct and the illegal use of
force, fraud, and corruption; (2) organized crime derives a major portion of its power through money obtained from
such illegal endeavors as syndicated gambling, loan sharking, the theft and fencing of property, the importation and
distribution of narcotics and other dangerous drugs, and other forms of social exploitation; (3) this money and power are
increasingly used to infiltrate and corrupt legitimate business and labor unions and to subvert and corrupt our democratic processes; (4) organized crime activities in the United States weaken the stability of the Nation's economic system,
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harm innocent investors and competing organizations, interfere with free competition, seriously burden interstate and
foreign commerce, threaten the domestic security, and undermine the general welfare of the Nation and its citizens; and
(5) organized crime continues to grow because of defects in the evidence-gathering process of the law inhibiting the
development of the legally admissible evidence necessary to bring criminal and other sanctions or remedies to bear on
the unlawful activities of those engaged in organized crime and because the sanctions and remedies available to the
Government are unnecessarily limited in scope and impact.
"It is the purpose of this Act to seek the eradication of organized crime in the United States by strengthening the legal
tools in the evidence-gathering process, by establishing new penal prohibitions, and by providing enhanced sanctions
and new remedies to deal with the unlawful activities of those engaged in organized crime.".
Liberal construction of provisions; supersedure of Federal or State laws; authority of attorneys representing
United States. Act Oct. 15, 1970, P.L. 91-452, Title IX, § 904, 84 Stat. 947, provided:
"(a) The provisions of this title shall be liberally construed to effectuate its remedial purposes.
"(b) Nothing in this title shall supersede any provision of Federal, State, or other law imposing criminal penalties or
affording civil remedies in addition to those provided for in this title.
"(c) Nothing contained in this title shall impair the authority of any attorney representing the United States to-"(1) lay before any grand jury impaneled by any district court of the United States any evidence concerning any
alleged racketeering violation of law;
"(2) invoke the power of any such court to compel the production of any evidence before any such grand jury; or
"(3) institute any proceeding to enforce any order or process issued in execution of such power or to punish disobedience of any such order or process by any person.".
Act Oct. 15, 1970; separability of provisions. Act Oct. 15, 1970, P.L. 91-452, Title XIII, § 1301, 84 Stat. 962, provided: "If the provisions of any part of this Act or the application thereof to any person or circumstances be held invalid,
the provisions of the other parts and their application to other persons or circumstances shall not be affected thereby.".
For full classification of this Act, consult USCS Tables volumes.
Act Nov. 6, 1978; savings provisions. Act Nov. 6, 1978, P.L. 95-598, Title IV, § 403(d), 92 Stat. 2683, provided:
"The amendments made by section 314 of this Act do not affect the application of chapter 9, chapter 96, section 2516,
section 3057, or section 3284 of title 18 of the United States Code [18 USCS §§ 151 et seq., §§ 1961 et seq., § 2516, §
3057, or § 3284] to any act of any person-"(1) committed before October 1, 1979; or
"(2) committed after October 1, 1979, in connection with a case commenced before such date.".
Executive Order 12435 revoked. Ex. Or. No. 12435 of July 28, 1983, 48 Fed. Reg. 34723, as amended by Ex. Or.
No. 12507 of March 22, 1985, 50 Fed. Reg. 11835, formerly classified as a note to this section, was revoked by Ex. Or.
No. 12610 of Sept. 30, 1987, § 3, 52 Fed. Reg. 36901, which appears as 5 USCS Appx. § 14 note. It provided for the
President's Commission on Organized Crime.
President's Commission on Organized Crime; taking of testimony and receipt of evidence. Act July 17, 1984,
P.L. 98-368, 98 Stat. 490, provided for the Commission established by Ex. Ord. No. 12435, formerly set out below,
authority relating to taking of testimony, receipt of evidence, subpoena power, testimony of persons in custody, immunity, service of process, witness fees, access to other records and information, Federal protection for members and staff,
closure of meetings, rules, and procedures, for the period of July 17, 1984, until the earlier of 2 years or the expiration
of the Commission.
Effective date of Nov. 2, 2002 amendment. Act Nov. 2, 2002, P.L. 107-273, Div B, Title IV, § 4005(f)(1), 116 Stat.
1813, provides that the amendment made by such section to the directory language of § 813(2) of Act Oct. 26, 2001,
P.L. 107-56, is effective on the date of the enactment of such P.L. 107-56.
NOTES:
Related Statutes & Rules:
Racketeering in interstate or foreign commerce, 18 USCS § 1951.
Interstate and foreign travel or transportation in aid of racketeering enterprises, 18 USCS § 1952.
Interstate transportation of wagering paraphernalia, 18 USCS § 1953.
Prohibition of illegal gambling businesses, 18 USCS § 1955.
Venue and process of proceedings involving Chapter 96, 18 USCS § 1965.
Multiple venue of prosecutions in federal courts, 18 USCS § 3237(a).
This section is referred to in 7 USCS § 12a; 18 USCS §§ 924, 1956, 1959.
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Research Guide:
Federal Procedure:
2 Moore's Federal Practice (Matthew Bender 3d ed.), ch 9, Pleading Special Matters § 9.03.
5 Moore's Federal Practice (Matthew Bender 3d ed.), ch 23, Class Actions § 23.45.
6 Moore's Federal Practice (Matthew Bender 3d ed.), ch 26, Duty to Disclose; General Provisions Governing Discovery § 26.46.
18 Moore's Federal Practice (Matthew Bender 3d ed.), ch 132, Issue Preclusion and Collateral Estoppel §§
132.02-132.05.
26 Moore's Federal Practice (Matthew Bender 3d ed.), ch 632.2, Criminal Forfeiture § 632.2.02.
3 Fed Proc L Ed, Arbitration § 4:18.
4B Fed Proc L Ed, Banking and Financing §§ 8:1542, 1569, 1575, 1576.
5 Fed Proc L Ed, Bankruptcy § 9:12.
5B Fed Proc L Ed, Bonds, Civil Fines, and Forfeitures §§ 10:132, 135, 152, 170, 172, 183, 205, 212, 215, 218, 219,
228, 230, 243, 248, 254, 261.
8A Fed Proc L Ed, Criminal Procedure §§ 22:74, 257, 305.
9 Fed Proc L Ed, Criminal Procedure §§ 22:877, 1058, 1061, 1073, 1088, 1103.
9A Fed Proc L Ed, Criminal Procedure § 22:1630.
19 Fed Proc L Ed, Injunctions and Restraining Orders §§ 47:130, 131.
20A Fed Proc L Ed, Internal Revenue § 48:1594.
21A Fed Proc L Ed, Judgments and Orders § 51:95.
28 Fed Proc L Ed, Postal Service § 63:435.
Am Jur:
1 Am Jur 2d, Abortion and Birth Control § 113.
3A Am Jur 2d, Aliens and Citizens §§ 6, 23.
5 Am Jur 2d, Appellate Review § 620.
9 Am Jur 2d, Bankruptcy §§ 18, 227, 552.
9A Am Jur 2d, Bankruptcy § 1381.
9C Am Jur 2d, Bankruptcy § 2699.
10 Am Jur 2d, Banks and Financial Institutions § 8.
19 Am Jur 2d, Corporations § 2207.
20 Am Jur 2d, Costs § 10.
20 Am Jur 2d, Counterclaim § 26.
20 Am Jur 2d, Courts § 93.
31A Am Jur 2d, Extortion, Blackmail, and Threats §§ 109, 120, 121, 125, 132, 144, 191.
32A Am Jur 2d, Federal Courts § 1139.
35A Am Jur 2d, Federal Tax Enforcement § 1215.
45 Am Jur 2d, Involuntary Servitude and Peonage § 12.
48A Am Jur 2d, Labor and Labor Relations § 1542.
61 Am Jur 2d, Plant and Job Safety--OSHA and State Laws § 51.
61A Am Jur 2d, Pleading § 211.
62B Am Jur 2d, Private Franchise Contracts § 126.
63C Am Jur 2d, Prostitution §§ 31, 33.
68 Am Jur 2d, Searches and Seizures § 426.
Am Jur Trials:
88 Am Jur Trials, Stockbroker Liability Litigation, p. 1.
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18 USCS § 1961
89 Am Jur Trials, Arbitrating Securities Industry Disputes, p. 55.
91 Am Jur Trials, When Clergy Fail Their Flock: Litigating the Clergy Sexual Abuse Case, p. 151.
Am Jur Proof of Facts:
10 Am Jur Proof of Facts 3d, "Pattern of Racketeering Activity" Under the Racketeer Influenced and Corrupt Organizations Act (RICO), p. 289.
22 Am Jur Proof of Facts 3d, Liability of Private Trade School to Student, p. 411.
37 Am Jur Proof of Facts 3d, Liability for Airing False or Misleading Television Infomercials, p. 259.
55 Am Jur Proof of Facts 3d, Proof That Motion Picture is Obscene or Harmful to Minors, p.249.
66 Am Jur Proof of Facts 3d, Liability of Health Maintenance Organizations, p. 1.
71 Am Jur Proof of Facts 3d, Enforcement of Casino Gambling Debts, p. 193.
Forms:
3 Bender's Federal Practice Forms, Form 8(VI):601, Federal Rules of Civil Procedure.
Fed Procedural Forms L Ed, Labor and Labor Relations (2007) § 46:369.
1A Fed Procedural Forms L Ed, Actions in District Courts (2008) § 1:930.
3B Fed Procedural Forms L Ed, Banking and Financing § 8:257.
5A Fed Procedural Forms L Ed, Commodity and Stock Exchanges (2009) § 12:152.
10E Fed Procedural Forms L Ed, Immigration, Naturalization, and Nationality (2006) §§ 40:904, 905.
4A Am Jur Pl & Pr Forms (2004), Banks, § 22.
7A Am Jur Pl & Pr Forms (2002), Conversion, § 101.
13B Am Jur Pl & Pr Forms (2009), Hospitals, § 153.
19B Am Jur Pl & Pr Forms (2007), Physicians, Surgeons, and Other Healers, § 201.
20B Am Jur Pl & Pr Forms (2008), Products Liability, § 314.
22 Am Jur Pl & Pr Forms (Rev ed), Securities Regulation § 34.
22A Am Jur Pl & Pr Forms (Rev ed), Securities Regulation § 57.
23 Am Jur Pl & Pr Forms (Rev ed), Stock and Commodity Exchanges § 62.
23A Am Jur Pl & Pr Forms (Rev ed), Telecommunications § 71.
Intellectual Property:
6 Chisum on Patents (Matthew Bender), ch 19, Defenses § 19.03.
7 Chisum on Patents (Matthew Bender), ch 20, Remedies § 20.01.
4 Nimmer on Copyright (Matthew Bender), ch 15, Criminal Actions § 15.05.
3 Milgrim on Trade Secrets (Matthew Bender), ch 13, Issues Prior to Commencement of Action § 13.03.
Commercial Law:
1 Debtor-Creditor Law (Matthew Bender), ch 4, Unfair and Deceptive Credit Practices § 4.07.
1 Debtor-Creditor Law (Matthew Bender), ch 6, The Cost of Credit §§ 6.08, 6.09.
1 Debtor-Creditor Law (Matthew Bender), ch 8, Fair Debt Collection § 8.08.
1 Debtor-Creditor Law (Matthew Bender), ch 12, Student Loans and Trade School Abuses § 12.08.
1 Debtor-Creditor Law (Matthew Bender), ch 13, Foreclosure Defense § 13.07.
4 Debtor-Creditor Law (Matthew Bender), ch 40, Asset Protection Trusts § 40.04.
5 Debtor-Creditor Law (Matthew Bender), ch 43, Usury § 43.19.
2 Goods in Transit (Matthew Bender), ch 9, Jurisdiction and Venue § 9.02.
Page 9
18 USCS § 1961
Criminal Law and Practice:
3 Criminal Constitutional Law (Matthew Bender), ch 14B, Civil Forfeiture § 14B.02.
1A Criminal Defense Techniques (Matthew Bender), ch 12, Misjoinder and Prejudicial Joinder of Offenses and Defendants § 12.05.
2 Criminal Defense Techniques (Matthew Bender), ch 52, Defense of a Gambling Case § 52.01.
3 Criminal Defense Techniques (Matthew Bender), ch 54, Defense of an Obscenity Case § 54.07.
3 Criminal Defense Techniques (Matthew Bender), ch 56, Defense of a Securities Case § 56.02.
3 Criminal Defense Techniques (Matthew Bender), ch 56A, Defense of a Tax Case § 56A.05.
3 Criminal Defense Techniques (Matthew Bender), ch 59, Defense of a Conspiracy Case § 59.03.
3A Criminal Defense Techniques (Matthew Bender), ch 62A, "RICO" Racketeer Influenced and Corrupt Organizations Act §§ 62A.01-62A.04.
3A Criminal Defense Techniques (Matthew Bender), ch 62B, Federal Forfeiture § 62B.05.
2 Business Crime (Matthew Bender), ch 6A, Preventing Corporate Criminal Liability § 6A.01.
5 Business Crime (Matthew Bender), ch 20A, Monetary Transactions and Money Laundering § 20A.06.
5 Business Crime (Matthew Bender), ch 22, Commercial Bribery §§ 22.01, 22.04.
5 Business Crime (Matthew Bender), ch 24, Racketeer Influenced and Corrupt Organizations Act of 1970 "RICO" §§
24.01-24.07.
5 Business Crime (Matthew Bender), ch 25, Federal Labor Law Violations §§ 25.01, 25.06, 25.07.
6 Business Crime (Matthew Bender), ch 31, Environmental Law Violations § 31.06.
6 Business Crime (Matthew Bender), ch 34, Bankruptcy Fraud § 34.04.
6 Business Crime (Matthew Bender), ch 36, Insurance Fraud § 36.03.
Bankruptcy:
1 Collier on Bankruptcy (Matthew Bender 15th ed. rev), ch 7, Bankruptcy Crimes PP 7.01, 7.07, 7.07A, 7.08.
5 Collier Bankruptcy Practice Guide, ch 79, Lender Liability PP 79.01, 79.06.
Immigration:
1 Immigration Law and Procedure (rev. ed.), ch 7, Sanctions, Discrimination and Employment Authorization § 7.05.
8 Immigration Law and Procedure (rev. ed.), ch 111, Civil Liabilities and Criminal Offenses § 111.08.
Corporate and Business Law:
8 Antitrust Laws and Trade Regulation, 2nd Edition (Matthew Bender), ch 162, Antitrust Statutes of Limitations §
162.02.
2 Antitrust Counseling and Litigation Techniques (Matthew Bender), ch 16, Counseling the Foreign Multinational on
United States Antitrust Law § 16.04.
3 Antitrust Counseling and Litigation Techniques (Matthew Bender), ch 24, Criminal Rights in Civil Antitrust Litigation: Grand Jury Secrecy and the Right Against Self-Incrimination § 24.01.
5 Antitrust Counseling and Litigation Techniques (Matthew Bender), ch 65, Sentencing § 65.09.
1 Liability of Corporate Officers and Directors (Matthew Bender), ch 5, Duty of Obedience § 5.12.
1 Liability of Corporate Officers and Directors (Matthew Bender), ch 6, Liability of Creditors and Other Third Parties § 6.10.
1 Liability of Corporate Officers and Directors (Matthew Bender), ch 8, Criminal Liability § 8.07.
1 Liability of Corporate Officers and Directors (Matthew Bender), ch 11, Depository Institutions: Directors and Officers § 11.02.
1 Securities Law Techniques (Matthew Bender), ch 1, Overview of Federal Private Placement Exemptions § 1.01.
6 Securities Law Techniques (Matthew Bender), ch 82, Complying with the Foreign Corrupt Practices Act § 82.08.
Page 10
18 USCS § 1961
Labor and Employment:
3 Larson on Employment Discrimination, ch 46, Sexual Harassment § 46.10.
3 Labor and Employment Law (Matthew Bender), ch 73, Sexual Harassment § 73.10.
Federal Taxation:
5 Rabkin & Johnson, Federal Income, Gift and Estate Taxation (Matthew Bender), ch 88, Criminal Penalties and
Procedures § 88.01.
3 Rhoades & Langer, U.S. International Taxation & Tax Treaties, ch 61, Assistance in Collection of Foreign Tax
Claims § 61.01.
Annotations:
Supreme Court's application of the rules of ejusdem generis and noscitur a sociis. 46 L Ed 2d 879.
Validity, construction, and application of Racketeer Influenced and Corrupt Organizations Act (RICO) (18 USCS §§
1961 et seq.)--Supreme Court cases. 139 L Ed 2d 945.
Application of Common Law Revenue Rule by Federal Courts. 4 ALR Fed 2d 279.
Application of Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C.A. §§ 1961 et seq. [18 USCS
§§ 1961 et seq.], to Terrorists and Acts of Terrorism. 10 ALR Fed 2d 461.
Construction and Application of Whistleblower Provision of Sarbanes-Oxley Act, 18 U.S.C.A. § 1514A(a)(1) [18
USCS § 1514A(a)(1)]. 15 ALR Fed 2d 315.
Construction and application of provision of Rule 9(b), Federal Rules of Civil Procedure, that circumstances constituting fraud or mistake be stated with particularity. 27 ALR Fed 407.
Validity, construction, and application of 18 USCS § 1962, making unlawful certain acts involving "pattern of racketeering activity" or "collection of unlawful debt". 29 ALR Fed 826.
Joinder of offenses under Rule 8(a), Federal Rules of Criminal Procedure. 39 ALR Fed 479.
What is an "enterprise," as defined at 18 USCS § 1961(4), for purposes of the Racketeer Influenced and Corrupt Organizations (RICO) statute (18 USCS §§ 1961 et seq.). 52 ALR Fed 818.
Requirement of 18 USCS § 1955, prohibiting illegal gambling businesses, that such businesses involve five or more
persons. 55 ALR Fed 778.
Construction and application of provision of Organized Crime Control Act of 1970 (18 USCS § 1963(a)) that whoever violated 18 USCS § 1962 shall forfeit to United States any interest in unlawful enterprise. 61 ALR Fed 879.
Civil action for damages under 18 USCS § 1964(c) of the Racketeer Influenced and Corrupt Organizations Act (RICO, 18 USCS §§ 1961 et seq.) for injuries sustained by reason of racketeering activity. 70 ALR Fed 538.
When will expert testimony "assist trier of fact" so as to be admissible at federal trial under Rule 702 of Federal
Rules of Evidence. 75 ALR Fed 461.
Seizure under RICO Comprehensive Forfeiture Act of 1984 (18 USCS § 1963) of funds received by attorney as fees
from accused. 76 ALR Fed 258.
Propriety of ordering consolidation under Rule 42(a) of Federal Rules of Civil Procedure in actions involving securities, 83 ALR Fed 367.
Constitutional right to counsel as ground for quashing or modifying federal grand jury subpoena directed to attorney.
83 ALR Fed 504.
Validity, construction, and application of § 501(c) of Labor-Management Reporting and Disclosure Act, 29 USCS §
501(c), prohibiting embezzlement of union assets. 85 ALR Fed 803.
Commencement of limitation period for criminal prosecution under Racketeer Influenced and Corrupt Organizations
Act (RICO), 18 USCS §§ 1961-1968. 89 ALR Fed 887.
Recovery of damages for personal injuries in civil action for damages under Racketeer Influenced and Corrupt Organizations Act (RICO) (18 USCS § 1964(c)), 96 ALR Fed 881.
Liability, under Racketeer Influenced and Corrupt Organizations Act (RICO) (18 USCS §§ 1961-1968), for retaliation against employee for disclosing or refusing to commit wrongful act. 100 ALR Fed 667.
Double jeopardy defense to separate or successive prosecutions under Racketeer Influenced and Corrupt Organizations Act (RICO) (18 USCS § 1962). 108 ALR Fed 594.
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18 USCS § 1961
Statute of limitations in civil actions for damages under the Racketeer Influenced and Corrupt Organizations Act
(RICO), 18 U.S.C.A. §§ 1961-1968 [18 USCS §§ 1961-1968]. 156 ALR Fed 361.
Validity, Construction, and Application of Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C.A. §§
1961 et seq. [18 USCS §§ 1961 et seq.]--Supreme Court Cases. 171 ALR Fed 1.
Acceptance and Application of Reverse Veil-Piercing--Third-Party Claimant. 2 ALR6th 195.
Contribution Between Joint Tortfeasors as Affected by Settlement with Injured Party by One or More Tortfeasors.
17 ALR6th 1.
Products Liability: Cardiac Pacemakers. 23 ALR6th 223.
Validity, Construction, Application, and Effect of Master Settlement Agreement (MSA) Between Tobacco Companies and Various States, and State Statutes Implementing Agreement; Use and Distribution of MSA Proceeds. 25
ALR6th 435.
Construction and Application of Rule of Necessity in Judicial Actions, Providing that a Judge Is Not Disqualified to
Try a Case Because of Personal Interest If Case Cannot Be Heard Otherwise. 27 ALR6th 403.
Pre-emption by workers' compensation statute of employee's remedy under state "whistleblower" statute. 20
ALR5th 677.
Validity, Construction, and Application of "Fiduciary Shield" Doctrine--Modern Cases. 79 ALR5th 587.
Criminal Prosecutions under State RICO Statutes for Engaging in Organized Criminal Activity. 89 ALR5th 629.
Conviction or Acquittal in Federal Court as Bar to Prosecution in State Court for State Offense Based on Same
Facts--Modern View. 97 ALR5th 201.
Common-Law Retaliatory Discharge of Employee for Refusing to Perform or Participate in Unlawful or Wrongful
Acts. 104 ALR5th 1.
Common-Law Retaliatory Discharge of Employee for Disclosing Unlawful Acts or Other Misconduct of Employer
or Fellow Employees. 105 ALR5th 351.
Civil action for damages under state Racketeer Influenced and Corrupt Organizations Acts (RICO) for losses from
racketeering activity. 62 ALR4th 654.
Discovery, in civil proceeding, of records of criminal investigation by state grand jury. 69 ALR4th 298.
Liability for retaliation against at-will employee for public complaints or efforts relating to health or safety. 75
ALR4th 13.
Texts:
2 Adoption Law and Practice (Matthew Bender), ch 16, Liability of Adoption Agencies and Attorneys for Misconduct in the Disclosure of Health-Related Information § 16.03.
4 Banking Law (Matthew Bender), ch 103, Fraudulent Activities: Bases of Liability § 103.05.
6 Banking Law (Matthew Bender), ch 127, Liabilities: Drawee Bank § 127.02.
12 Banking Law (Matthew Bender), ch 230, Judicial Proceedings and the Law Applicable to Credits, Guarantees,
and Bonds § 230.02.
2A Environmental Law Practice Guide (Matthew Bender), ch 12C, Criminal Enforcement § 12C.04.
4A Environmental Law Practice Guide (Matthew Bender), ch 29A, Hazardous Materials Transportation § 29A.06.
4 Frumer & Friedman, Products Liability (Matthew Bender), ch 35, Manufacturers' Liability § 35.02.
2 Government Contracts: Law, Administration & Procedure (Matthew Bender), ch 14, Fraud, Conflicts of Interest
and Gratuities § 14.150.
7 Government Contracts: Law, Administration & Procedure (Matthew Bender), ch 48, Small Business Aids and
Preferences § 48.180.
1 The Law of Advertising (Matthew Bender), ch 11, Federal Remedies Available to Competitors § 11.04.
2 The Law of Advertising (Matthew Bender), ch 14, Consumers' Actions Based on Contents of Advertisements §
14.04.
2 The Law of Advertising (Matthew Bender), ch 15, Federal Remedies Available to Consumers §§ 15.01, 15.06.
3 The Law of Advertising (Matthew Bender), ch 37, Enforcement § 37.04.
3 The Law of Advertising (Matthew Bender), ch 43, Liabilities of Advertisers § 43.01.
3 The Law of Advertising (Matthew Bender), ch 44, Liabilities of Advertising Agencies § 44.02.
3 The Law of Advertising (Matthew Bender), ch 45, Liabilities of Media § 45.02.
3 The Law of Advertising (Matthew Bender), ch 52, Advertising by Financial Institutions § 52.05.
Page 12
18 USCS § 1961
3 The Law of Advertising (Matthew Bender), ch 55, Lotteries, Games of Chance, Sweepstakes, and Similar Promotional Marketing Schemes §§ 55.03, 55.08.
Law Review Articles:
Nevin; Scott. The USA Patriot Act: Time To Speak Up [Discussion of T. Derden, One Year Under the Patriot Act].
46 Advoc (Boise) 19, December 2003.
Brandt; Van Valkenburgh. The USA Patriot Act: The Devil is in the Details [Discussion of T. Derden, One Year
Under the Patriot Act]. 46 Advoc (Boise) 24, December 2003.
What Have They Done to Civil RICO: The Supreme Court Takes the Racketeering Requirement Out of Racketeering. 35 Am U L Rev 821, Spring 1986.
Kennedy. Civil RICO in the Antitrust Context. 55 Antitrust L J 463, 1986.
Barnette. The End of Court Imposed Limitations to Civil RICO--Sedima S.P.R.L. v Imrex Co., 105 S. Ct. 3275
(1985). 1986 Ariz St L J 521.
Jury Instructions for Civil and Criminal RICO Cases Approved by: RICO Cases Committee, Criminal Justice Section of the American Bar Association. 1987 BYU L Rev 1.
Chemerinsky. Litigation alerts in the USA Patriot Act. 23 Cal Law 29, April 2003.
Bertz. Pursuing a Business Fraud RICO Claim. 21 Cal W L Rev, Civ RICO Symposium 246, Winter 1985.
Brown. RICO Repercussions: Sedima and Haroco. 21 Cal W L Rev, Civ RICO Symposium 282, Winter 1985.
Curnow; Matloff. The Case for Divestiture to Private Plaintiffs Under 18 USC Section 1964(a). 21 Cal W L Rev,
Civ RICO Symposium 302, Winter 1985.
Dwyer, Jr.; Kiely. Vicarious Civil Liability Under the Racketeer Influenced and Corrupt Organizations Act. 21 Cal
W L Rev, Civ RICO Symposium 324, Winter 1985.
Parnon. RICO Damages: Look to the Clayton Act, Not the Predicate Act. 21 Cal W L Rev, Civ RICO Symposium
348, Winter 1985.
Moran. The Meaning of Pattern in RICO. 62 Chi-Kent L Rev 139, 1985.
Title IX of the Organized Crime Control Act of 1970: An Analysis of Issues Arising in its Interpretation. 27 De
Paul L Rev 89.
Binder. The Potential Application of RICO in the Natural Resources/Environmental Law Context. 63 Denver U L
Rev 535, 1986.
Rosenszweig. Civil Liberty and the Response to Terrorism. 42 Duq L Rev 663, Summer 2004.
Bridges. Private RICO Litigation Based Upon "Fraud in the Sale of Securities." 18 Ga L Rev 43, Fall 1983.
Goldsmith. Judicial immunity for white-collar crime: the ironic demise of civil RICO. 30 Harv J on Legis 1, Winter
1993.
Duggan. Pleading a RICO claim. 78 Ill BJ 454, September 1990.
The Applicability of Civil RICO to Toxic Waste Polluters. 62 Ind L J 451, Spring 1987.
Tyson; Ain. RICO: The Newest Litigation Gambit in Corporate Takeover Battles. 6 J Comp Bus & Cap Market L
355, December 1984.
Coolley. RICO: Modern Weaponry Against Software Pirates. V Computer L J 143, Fall 1984.
Lacovara; Aronow. The Legal Shakedown of Legitimate Business People: The Runaway Provisions of Private Civil
RICO. 21 New Eng L Rev 1, 1985-1986.
Murphy. Reconsideration of Pattern in Civil RICO Offenses. 62 Notre Dame L Rev 83, 1986.
Cowden. Attorney Fee Forfeiture Under the Comprehensive Forfeiture Act of 1984: If It Works, Don't Fix It. 63
Notre Dame L Rev 535, 1988.
The USA Patriot Act: Privacy Versus Security in a Post-9/11 World. Symposium. 29 NC J Int'l & Com Reg 595,
Summer 2004.
RICO Post-Indictment Restraining Orders: The Process Due Defendants. 60 NYUL Rev 1162, December 1985.
Against Forfeiture of Attorneys' Fees Under RICO: Protecting the Constitutional Rights of Criminal Defendants. 61
NYUL Rev 124, April 1986.
Frame. The 1984 RICO Amendments: Will Defendants and Their Attorneys Be Short-Changed? 18 Pac L J 31,
1986.
Black. Racketeer Influenced and Corrupt Organizations (RICO)--Securities and Commercial Fraud as Racketeering
Crime After Sedima: What Is a "Pattern of Racketeering Activity"? 6 Pace L Rev 365, Spring 1986.
Sproule. The Effect of the USA Patriot Act on Workplace Privacy. 49 Prac Law 35, February 2003.
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18 USCS § 1961
Kessler. And a little child shall lead them: New York's Organized Crime Control Act of 1986. 64 St John's L Rev
797, Fall 1990.
Markus. Procedural Implications of Forfeiture Under RICO, the CCE, and the Comprehensive Forfeiture Act of
1984: Reforming the Trial Structure. 59 Temp L Q 1097, Winter 1986.
Atkinson. "Racketeer Influenced and Corrupt Organizations," 18 USCS §§ 1961-68: Broadest of the Federal Criminal Statutes. 69 The Journal of Criminal Criminology 1, Spring 1978.
Nagel; Plager. RICO, Past and Future: Some Observations and Conclusions. 52 U Cin L R 450, 1983.
MacIntosh. Racketeer Influenced and Corrupt Organizations Act: Powerful New Tool of the Defrauded Securities
Plaintiff. 31 U Kansas L Rev 7, Fall 1982.
Smith. The Scope of Real Property Forfeiture For Drug-Related Crimes Under the Comprehensive Forfeiture Act.
137 U Pa L Rev 303, November 1988.
Friedrich. Forfeiture of Attorneys' Fees: The Impact of the Comprehensive Forfeiture Act of 1984. 56 UMKC L Rev
545, Spring 1988.
Forfeitability of Attorney's Fees Traceable as Proceeds From a RICO Violation Under the Comprehensive/Crime
Control Act of 1984. 32 Wayne L Rev 1499, Summer 1986.
RICO: Limiting Suits By Altering the Pattern. 28 Wm & Mary L Rev 177, Fall 1986.
Fasman. The Proper Application of Civil RICO to Patent Fraud. 96 Yale LJ 1323, May 1987.
Emerging Issues Analysis
Benson on How Employers Defend RICO/Immigration & Antitrust/Immigration Lawsuits
In his analysis of the recent wave of lawsuits alleging employer violations of the immigration laws under the Racketeer Influenced and Corrupt Organization Act ("RICO") and state antitrust statutes, Littler Mendelson shareholder
Donald W. Benson examines the following: Which employers are most at risk, Vulnerabilities the lawsuits attack,
Working with subcontractors and staffing agencies, Handling social security no-match letters, Immigration violations,
Wage and hour violations, and Building a better defense. This commentary is based in part on the following article,
which was published originally by Littler Mendelson P.C. and later reprinted (with permission from Littler Mendelson
P.C.) in the December 2006 issue of Bender's Labor & Employment Bulletin: "RICO/Immigration Overflows Into Antitrust/Immigration Lawsuits," by Donald W. Benson and Michelle R. Barrett.
Interpretive Notes and Decisions:
I.IN GENERAL .1. US Supreme Court Alert 1. Purpose 2.--Controlling organized crime 3. Constitutionality 4.--Bills
of attainder 5.--Ex post facto laws 6. Construction 7. Relationship to State law 8.--Acquittal on or dismissal of predicate
act charges 9.--Defenses 10.--Statute of limitations
II.PARTICULAR TERMS
A.In General
1.Racketeering Activity 11. Generally 12. "Involving" 13. Relationship to State offenses
2.Pattern of Racketeering Activity
a.In General 14. Generally 15. Number of predicate acts 16. Number of schemes, goals, or episodes
17.--Circumstances of case as determinative 18. Preparatory acts 19. Duration and continuity 20. Organized crime
connection 21. Relationship among predicate acts
b.Particular Conduct 22. Arson 23. Bankruptcy fraud 24. Bribery 25. Contract-related fraud
26.--Construction 27.--Employment 28.--Franchises, dealerships, and distributorships 29.--Sales 30.--Service 31.
Drugs and narcotics 32. Embezzlement 33. Extortion 34.--Financial institution fraud 35.--Single scheme 36.
Gambling 37. Insurance 38. Labor 39. Mail or wire fraud, generally 40.--Single scheme or goal 41. Misappropriation of public funds 42. Murder 43. Oil and gas interests 44. Real estate development and sales 45. Securities,
commodities, or bond fraud 46.--Continuity 47.--Number of predicate acts 48.--Single scheme 49.--Insider trading
50. Tax 51. Trade practices 52. Unlawful debt collection 53. Miscellaneous 54.--Continuity 55.--Single scheme
or episode
3.Enterprise 56. Generally 57. Discrete existence apart from racketeering activity 58.--Financial institutions
59.--Other particular cases 60. Continuity 61.--Single, finite goal 62. Corporations 63.--As both person and enter-
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18 USCS § 1961
prise 64.--Association of corporations 65.--Association within corporation 66.--Professional corporations 67. Estates 68. Labor organizations 69. Governmental agencies or officers 70.--Judiciary 71.--Law enforcement 72.
Inanimate objects 73. Individuals 74. Partnerships 75. Sole proprietorship 76. Trust funds 77. Illegitimate associations 78.--Drugs and narcotics 79.--Gambling 80.--Prostitution 81.--Tax avoidance 82.--Miscellaneous 83.
Other entities
4.Person 84. Generally 85. Corporation 86. Governmental unit 87. Partnership 88. Relation to "enterprise"
89.--Under 18 USCS § 1962(a), (c), or (d) 90.--Particular cases
5.Unlawful Debt 91. Gambling 92. Interest
B.Predicate Acts 93. Generally 94. Arson 95. Bribery 96.--State law 97. Conspiracy 98. Contract fraud
99. Counterfeiting 100. Drugs and narcotics 101. Extortion 102. Fiduciary duty breach 103. Labor and employment
104.--Employee's civil RICO claim 105. Litigation threat 106. Mail or wire fraud, generally 107.--Aiding and abetting 108.--Intrastate communication 109.--Specificity of pleadings 110.--Particular cases 111.--Financial institutions
112.--Insurance 113.--Tax returns 114.--Trade practices 115. Mail theft 116. Malicious prosecution 117. Murder
118. Obscenity 119. Obstruction of justice 120. Patent infringement 121. Perjury 122. Robbery 123. Securities
fraud 124.--Churning 125.--Particular cases 126. Tax fraud 127. Other
I.IN GENERAL .1. US Supreme Court Alert
US Supreme Court Case Alert--On May 4, 2009, Court granted petition for writ of certiorari to Second Circuit on
question of whether city government met Racketeer Influenced and Corrupt Organizations Act (18 USCS §§ 1961 et
seq.) standing requirement that plaintiff be directly injured in its business or property by alleging noncommercial injury
resulting from nonpayment of taxes by nonlitigant third parties. City of New York v Smokes-Spirits.com, Inc. (2008, CA2
NY) 541 F3d 425, cert gr (US) 129 S Ct 2159, 173 L Ed 2d 1155.
1. Purpose
Both Racketeer Influenced and Corrupt Organizations Act (RICO) (18 USCS §§ 1961 et seq.) and Clayton Act (15
USCS § 15b) share common congressional objective of encouraging civil litigation to supplement government efforts to
deter and penalize prohibited practices; object of civil RICO actions is thus not merely to compensate victims, but to
turn them into prosecutors dedicated to eliminating racketeering activity. Rotella v Wood (2000) 528 US 549, 145 L Ed
2d 1047, 120 S Ct 1075, 2000 CDOS 1357, 2000 Daily Journal DAR 1905, RICO Bus Disp Guide (CCH) P 9837, 2000
Colo J C A R 952, 13 FLW Fed S 127.
Purpose of 18 USCS §§ 1961 et seq. is to prevent and punish financial infiltration and corrupt operation of legitimate business operations affecting interstate commerce. United States v Sutton (1979, CA6 Ohio) 605 F2d 260, different results reached on reh (1980, CA6 Ohio) 642 F2d 1001, cert den (1981) 453 US 912, 69 L Ed 2d 995, 101 S Ct
3143, 101 S Ct 3144 and post-conviction relief dismd (2001, CA6 Ohio) 11 Fed Appx 496.
Primary purpose of RICO (18 USCS §§ 1961 et seq.) is to cope with infiltration of legitimate businesses. United
Energy Owners Committee, Inc. v United States Energy Management Systems, Inc. (1988, CA9 Cal) 837 F2d 356, 10
FR Serv 3d 253.
Purpose of RICO is to impose enhanced sanctions on those engaging in racketeering activities. United States v
Yarbrough (1988, CA9 Wash) 852 F2d 1522, 26 Fed Rules Evid Serv 334, cert den (1988) 488 US 866, 102 L Ed 2d
140, 109 S Ct 171 and (criticized in United States v Smith (1995, CA10 Kan) 63 F3d 956, 42 Fed Rules Evid Serv 1296)
and (criticized in United States v Marshall (1996, CA7 Ill) 75 F3d 1097).
RICO defendant may be retried without violating double jeopardy on criminal charges that resulted in hung jury at
prior trial where wrongful conduct which is basis for unresolved charges was also basis for separate charges for which
defendant was acquitted. United States v Jenkins (1990, CA6 Mich) 902 F2d 459, reh den, en banc (1990, CA6) 1990
US App LEXIS 10102.
Multiple convictions on racketeering, RICO conspiracy, and conspiracy to distribute heroin may be overlapping
and cumulative, but do not violate double jeopardy clause of Fifth Amendment. United States v Johnson (1990, CA10
Okla) 911 F2d 1394, cert den (1991) 498 US 1050, 112 L Ed 2d 781, 111 S Ct 761 and (criticized in United States v
Baker (1995, CA9 Mont) 63 F3d 1478, 95 CDOS 7886, 95 Daily Journal DAR 13531) and post-conviction relief den
(1996, WD Okla) 1996 US Dist LEXIS 19488, app dismd (1997, CA10 Okla) 1997 US App LEXIS 69.
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18 USCS § 1961
Principal purpose of Title IX of Organized Crime Control Act of 1970 (18 USCS §§ 1961-1963) is to strengthen
means of preventing money and power obtained from such illegal endeavors as syndicated gambling, loan sharking,
theft and fencing of property, importation and distribution of narcotics and other dangerous drugs, and other forms of
social exploitation from being used to infiltrate and corrupt legitimate businesses and labor unions and to subvert and
corrupt our democratic processes so as to interfere with free competition and to burden interstate and foreign commerce.
United States v Forsythe (1977, WD Pa) 429 F Supp 715, revd on other grounds (1977, CA3 Pa) 560 F2d 1127.
Unpublished Opinions
Unpublished: Business owner's Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS §§ 1961-68,
action was properly dismissed on res judicata grounds, and his motion for reconsideration denied, because, though he
waged claims relating to handling of his business's receivership, receiver, counsel, and accountants had been released
from liability, and such was improper collateral attack; RICO was many things, but it was not exception to res judicata.
Peterson v Saperstein (2008, CA10 Utah) 2008 US App LEXIS 4213.
2.--Controlling organized crime
18 USCS §§ 1961 et seq. jurisdictional reach is not limited to large enterprises engaged in organized crime. United
States v Gottesman (1984, CA11 Fla) 724 F2d 1517, 222 USPQ 206, 15 Fed Rules Evid Serv 98, reh den (1984, CA11
Fla) 729 F2d 1468.
18 USCS §§ 1961 et seq. is not designed to apply exclusively to organized crime participants. United States v
Romano (1984, CA11 Fla) 736 F2d 1432, vacated, remanded, in part, on reh, petition dismd on other grounds (1985,
CA11 Fla) 755 F2d 1401 and (ovrld in part by Crutchfield v Wainwright (1986, CA11 Fla) 803 F2d 1103) and (ovrld in
part as stated in Reynolds v Alabama DOT (1998, MD Ala) 4 F Supp 2d 1055).
Congressional intent behind enacting Racketeer Influenced and Corrupt Organizations Act, 18 USCS §§
1961-1968, was to establish new prohibitions, enhanced sanctions, and new remedies; its goal was to attempt to eradicate organized crime rather than simply to provide avenue of redress for wrongs cognizable at common law and, therefore, most racketeering activity that could form predicate for civil RICO claim is defined in terms of specific federal
statutory violations; additional elements of civil RICO claim under 1964, such as affect on interstate commerce, commission of two predicated acts within span of ten years, and required existence of RICO "enterprise," find no counterparts at common law. Cullen v Margiotta (1987, CA2 NY) 811 F2d 698, 22 Fed Rules Evid Serv 877, 7 FR Serv 3d
785, cert den (1987) 483 US 1021, 97 L Ed 2d 764, 107 S Ct 3266 and (ovrld as stated in Cruz v Kennedy (1998, SD
NY) 1998 US Dist LEXIS 15599) and (ovrld in part as stated in Toys "R" Us, Inc. v Feinberg (1999, CA2 NY) 1999 US
App LEXIS 29833) and (criticized in Weston v AmeriBank (1999, WD Mich) 1999 US Dist LEXIS 20287).
Target of RICO statute is criminal activity which, because of its organization, duration, and objectives, poses, or
during its existence posed, threat of series of injuries over significant period of time. Marshall-Silver Constr. Co. v
Mendel (1987, CA3 Pa) 835 F2d 63, vacated on other grounds (1989) 492 US 913, 106 L Ed 2d 582, 109 S Ct 3233.
Congress designed RICO (18 USCS §§ 1961 et seq.) as weapon against sophisticated racketeers as well as artless
ones, and RICO was intended to provide new weapons of unprecedented scope for assault on organized crime and its
economic roots. United States v Perholtz (1988, App DC) 268 US App DC 347, 842 F2d 343, 25 Fed Rules Evid Serv
425, cert den (1988) 488 US 821, 102 L Ed 2d 42, 109 S Ct 65 and (criticized in Lockheed Martin Corp. v Boeing Co.
(2005, MD Fla) 357 F Supp 2d 1350, 18 FLW Fed D 381).
Purpose of 18 USCS §§ 1961 et seq. is to provide enhanced sanctions and new remedies to deal with unlawful activities of participants in organized crime. Parnes v Heinold Commodities, Inc. (1980, ND Ill) 487 F Supp 645.
18 USCS §§ 1961 et seq. is expression of Congressional purpose to deal with organized crime's control over business enterprises of all sorts, whether legitimate or illegitimate. Noonan v Granville-Smith (1981, SD NY) 537 F Supp
23, CCH Fed Secur L Rep P 98727.
Statutory offenses created by RICO were aimed at evils of criminal racketeering by organized crime and sweep of
RICO does not embrace ordinary violators charged in common law fraud actions or federal securities law violations as
predicate offenses for RICO relief, albeit use thereof to accomplish one of enumerated felonies in statute may be element of and lead to RICO liability if organized criminals engage in prohibited activity. Moss v Morgan Stanley, Inc.
(1983, SD NY) 553 F Supp 1347, CCH Fed Secur L Rep P 99045, affd (1983, CA2 NY) 719 F2d 5, CCH Fed Secur L
Rep P 99478, 70 ALR Fed 511, cert den (1984) 465 US 1025, 79 L Ed 2d 684, 104 S Ct 1280 and (ovrld as stated in
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18 USCS § 1961
United States v Private Sanitation Indus. Ass'n (1992, ED NY) 793 F Supp 1114, 123 CCH LC P 10380) and (criticized
in United States v Bryan (1995, CA4 W Va) 58 F3d 933, CCH Fed Secur L Rep P 98787) and (criticized in Frooks v
Town of Cortlandt (1998, SD NY) 997 F Supp 438).
RICO "pattern of racketeering activity" requirement is not unconstitutionally vague as applied to tire manufacturer's
allegations that trading company engaged in fraudulent scheme to defraud manufacturer where (1) allegations, if
proved, would satisfy pattern requirement, and (2) allegations present factual scenario likely to be among typical situations envisioned by Congress within RICO's scope. Uniroyal Goodrich Tire Co. v Mutual Trading Corp. (1990, ND
Ill) 749 F Supp 869.
3. Constitutionality
Fact that definition of "enterprise" is broad enough to include both legitimate and illegitimate enterprises does not
make statute vague; 18 USCS §§ 1961-1968 is not repugnant to Eight Amendment because it may be applied to other
than members of organized crime; defendant's right to equal protection was not violated by §§ 1961-1968 because of
discretion permitted prosecutor to charge offense under that Act or to select only underlying crime. United States v
Aleman (1979, CA7 Ill) 609 F2d 298, cert den (1980) 445 US 946, 63 L Ed 2d 780, 100 S Ct 1345.
RICO statute is not unconstitutionally vague as applied to conduct which consists of ongoing scheme to defraud
and extract cash from victim. United States v Morelli (1981, CA6 Mich) 643 F2d 402, cert den (1981) 453 US 912, 69
L Ed 2d 994, 101 S Ct 3143.
Multiple convictions on racketeering, RICO conspiracy, and conspiracy to distribute heroin may be overlapping
and cumulative, but do not violate double jeopardy clause of Fifth Amendment. United States v Johnson (1990, CA10
Okla) 911 F2d 1394, cert den (1991) 498 US 1050, 112 L Ed 2d 781, 111 S Ct 761 and (criticized in United States v
Baker (1995, CA9 Mont) 63 F3d 1478, 95 CDOS 7886, 95 Daily Journal DAR 13531) and post-conviction relief den
(1996, WD Okla) 1996 US Dist LEXIS 19488, app dismd (1997, CA10 Okla) 1997 US App LEXIS 69.
Although Supreme Court has admitted that it finds it difficult to formulate in abstract any general test for continuity, court of appeals will not thereby find RICO Act unconstitutionally vague. United States v Dischner (1992, CA9
Alaska) 960 F2d 870, 92 CDOS 2854, 92 Daily Journal DAR 4590, 35 Fed Rules Evid Serv 485, amd, reh den (1992,
CA9 Alaska) 974 F2d 1502, 92 CDOS 7769, 92 Daily Journal DAR 12621, 92 Daily Journal DAR 12901, cert den
(1993) 507 US 923, 122 L Ed 2d 682, 113 S Ct 1290 and (criticized in United States v Brumley (1996, CA5 Tex) 79 F3d
1430) and (ovrld as stated in Loral Infared & Imaging Sys. v ERA Helicopters (1997, CA9 Cal) 1997 US App LEXIS
14850).
Breach of fiduciary duty is not one of specified state crimes listed in definition of "racketeering activity" and therefore cannot support civil RICO claim. Manion v Freund (1992, CA8 Mo) 967 F2d 1183, RICO Bus Disp Guide (CCH)
P 8028, reh den (1992, CA8) 1992 US App LEXIS 16540.
RICO statute is not unconstitutionally vague as applied to "enterprise" of mayor and advisors involved in kickback
and bribery scheme. United States v Dischner (1992, CA9 Alaska) 974 F2d 1502, 92 CDOS 7769, 92 Daily Journal
DAR 12621, 92 Daily Journal DAR 12901, cert den (1993) 507 US 923, 122 L Ed 2d 682, 113 S Ct 1290 and (criticized
in United States v Brumley (1996, CA5 Tex) 79 F3d 1430) and (ovrld as stated in Loral Infared & Imaging Sys. v ERA
Helicopters (1997, CA9 Cal) 1997 US App LEXIS 14850).
Speech or Debate Clause does not prohibit RICO charge that member of House of Representatives conducted illegal activity through legislative office; prosecution may prove existence of enterprise by evidence relating to unofficial
or ultra vires conduct separate from pattern of racketeering activity. United States v McDade (1994, CA3 Pa) 28 F3d
283, reh, en banc, den (1994, CA3 Pa) 1994 US App LEXIS 21624 and cert den (1995) 514 US 1003, 131 L Ed 2d 194,
115 S Ct 1312.
Substantive RICO violation and RICO conspiracy are not same offense for double jeopardy purposes, and accordingly, can be punished separately. United States v Marino (2002, CA1 Mass) 277 F3d 11, 57 Fed Rules Evid Serv 1511,
cert den (2002) 536 US 948, 153 L Ed 2d 819, 122 S Ct 2639.
Civil RICO claim of stock investor will not be dismissed due to vagueness of term "pattern of racketeering activity," because lower courts and majority of Supreme Court justices believe term is definable and interpret it broadly, and
because low-pleading standard accepting allegations of 2 fraudulent sales of limited partnership interests one year apart
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18 USCS § 1961
as "pattern" does not violate fair notice/due process standards of U.S. Constitution. Beck v Edward D. Jones & Co.
(1990, CD Ill) 735 F Supp 903.
In Government's civil suit against cigarette manufacturers under Racketeer Influenced and Corrupt Organizations
Act, 18 USCS § 1961 et seq., regarding manufacturers' argument that disgorgement sought by Government was so
grossly disproportionate to alleged RICO offenses as to constitute excessive fine, court determined that Eighth Amendment did not apply to disgorgement, because it was not punishment. United States v Philip Morris USA (2004, DC Dist
Col) 310 F Supp 2d 58.
18 USCS § 1964(c) is not unconstitutionally vague because kinds of activity to which injunction may be addressed
are described with sufficient particularity in substantive provisions of Racketeer Influenced and Corrupt Organizations
Act, 18 USCS §§ 1961-1968; 18 USCS § 1961 defines "racketeering activity" with reference to specific offenses, pattern
of racketeering activity with reference to definite number of acts of racketeering activity within specified time periods,
and enterprise and person with standard language of established meaning. Buchanan County v Blankenship (2008, WD
Va) 545 F Supp 2d 553.
4.--Bills of attainder
In drafting 18 USCS 1961(5), Congress avoided constitutional objections to passage of bills of attainder or ex post
facto laws by defining "pattern of racketeering activity" to require one act of racketeering activity after the effective date
of chapter; since appellants were convicted of conspiracy under 18 USCS 1962(d) for having performed post-October
15, 1970, acts in furtherance of their continued racketeering conspiracy after being put on notice that these subsequent
acts would combine with prior racketeering acts to produce racketeering pattern, statute is constitutional. United States
v Campanale (1975, CA9 Cal) 518 F2d 352, 77 CCH LC P 10948, cert den (1976) 423 US 1050, 46 L Ed 2d 638, 96 S
Ct 777, 77 CCH LC P 11163, 78 CCH LC P 11180, reh den (1976) 424 US 950, 47 L Ed 2d 356, 96 S Ct 1422.
No specific language in RICO is ambiguous and no specific language suggests that public utilities are excepted
from RICO's general applicability. County of Suffolk v Long Island Lighting Co. (1990, CA2 NY) 907 F2d 1295 (criticized in B.V. Optische Industrie de Oude Delft v Hologic, Inc. (1996, SD NY) 925 F Supp 162) and (criticized in System
Mgmt., Inc. v Loiselle (2000, DC Mass) 91 F Supp 2d 401, RICO Bus Disp Guide (CCH) P 9859) and (criticized in
System Mgmt., Inc. v Loiselle (2000, DC Mass) 112 F Supp 2d 112).
Violation of constitution, antitrust laws, and civil rights laws, are not predicate acts under RICO. Jennings v Emry
(1990, CA7 Ind) 910 F2d 1434.
Corporate defendant that is foreign entity is not for that reason alone shielded from reach of RICO; test is character
and amount of activity in United States that will justify RICO subject matter jurisdiction. North South Fin. Corp. v
Al-Turki (1996, CA2 NY) 100 F3d 1046, RICO Bus Disp Guide (CCH) P 9160.
Civil RICO claim of stock investor will not be dismissed due to vagueness of term "pattern of racketeering activity," because lower courts and majority of Supreme Court justices believe term is definable and interpret it broadly, and
because low-pleading standard accepting allegations of 2 fraudulent sales of limited partnership interests one year apart
as "pattern" does not violate fair notice/due process standards of U.S. Constitution. Beck v Edward D. Jones & Co.
(1990, CD Ill) 735 F Supp 903.
RICO defendants' motion to strike is denied where government showed sufficient nexus between predicate act of
sheriff's conspiring to affect commerce by extortion and sheriff's department as enterprise where proffer showed telephone calls to Sheriff at his office and use of sheriff's department facilities and personnel related to alleged criminal
acts. United States v Thomas (1990, MD Tenn) 749 F Supp 847.
5.--Ex post facto laws
18 USCS § 1961(5) under which "pattern of racketeering activity" is deemed to exist if at least 2 acts of racketeering take place within 10 years of each other and at least 1 of these acts has occurred after effective date of Organized
Crime Control Act of 1970 does not violate ex post facto clause of United States Constitution. United States v Brown
(1977, CA5 Ga) 555 F2d 407, reh den (1977, CA5 Ga) 559 F2d 29 and cert den (1978) 435 US 904, 55 L Ed 2d 494, 98
S Ct 1448.
Applying RICO to illegitimate as well as legitimate enterprises does not deviate so far from average person's understanding of RICO that ex post facto effect results since it is not every judicial expansion of statutory construction that
creates ex post facto law but rather it is only those which are unexpectant and indefensible by reference to law which
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18 USCS § 1961
has been expressed prior to conduct in issue. United States v Martino (1981, CA5 Fla) 648 F2d 367, vacated, in part
on other grounds, remanded (1981, CA5 Fla) 650 F2d 651 and cert den (1982) 456 US 943, 72 L Ed 2d 465, 102 S Ct
2006, 102 S Ct 2007 and cert den (1982) 456 US 949, 72 L Ed 2d 474, 102 S Ct 2020.
Where criminal conspiracy's sole contacts with district of venue were calls made out of district to person never
convicted of participating in conspiracy, venue was proper; phone calls were sufficiently probative of conspiracy to
establish venue. United States v Friedman (1993, CA2 NY) 998 F2d 53.
Under 18 USCS § 1961(5) "pattern of racketeering activity" requires proof of two such acts, but only one of these
must have occurred after effective date of statute; one or more of underlying acts of racketeering activity necessary to
comprise pattern could be acts which took place prior to October 15, 1970, date statute went into effect; 18 USCS §
1961 does not violate constitutional ban on ex post facto laws, since it merely creates separate and distinct crime, comprised of commission of at least two previously defined illegal acts, which is not complete until second act is done; one
who has committed acts of racketeering activity prior to October 15, 1970, is on notice that commission of further such
act within prohibition of statute will subject him to liability for new offense, and he has thus notice necessary to conform his actions to new requirement of law, which is all that ex post facto clause requires. United States v Field (1977,
SD NY) 432 F Supp 55, affd without op (1978, CA2 NY) 578 F2d 1371, cert dismd (1978) 439 US 801, 58 L Ed 2d 94,
99 S Ct 43.
In Government's civil suit against cigarette manufacturers under Racketeer Influenced and Corrupt Organizations
Act, 18 USCS § 1961 et seq., Ex Post Facto Clause, U.S. Const. art. 1, § 9, cl. 3, did not apply to disgorgement sought
by Government because, if it was disgorgement, it was not punishment and, if it was punishment for straddle offenses,
such criminal liability was not impermissibly retroactive. United States v Philip Morris USA (2004, DC Dist Col) 310 F
Supp 2d 58.
6. Construction
18 USCS § 1961 et seq. should be liberally construed to effectuate its remedial purpose. United States v Kaye
(1977, CA7 Ill) 556 F2d 855, 95 BNA LRRM 2666, 81 CCH LC P 13243, cert den (1977) 434 US 921, 54 L Ed 2d 277,
98 S Ct 395, 96 BNA LRRM 3249, 82 CCH LC P 10202.
Provision of Racketeer Influenced and Corrupt Organizations Act (18 USCS §§ 1961 et seq.) shall be liberally construed to effectuate its remedial purposes, legislative intent being to make RICO violations dependent upon behavior,
not status; 18 USCS § 1961 et seq. and 18 USCS § 1955 were both part of Organized Crime Control Act of 1970, and
statutes enacted together with Organized Crime Control Act of 1970 have been construed in pari materia. United
States v Forsythe (1977, CA3 Pa) 560 F2d 1127.
No specific language in RICO is ambiguous and no specific language suggests that public utilities are excepted
from RICO's general applicability. County of Suffolk v Long Island Lighting Co. (1990, CA2 NY) 907 F2d 1295 (criticized in B.V. Optische Industrie de Oude Delft v Hologic, Inc. (1996, SD NY) 925 F Supp 162) and (criticized in System
Mgmt., Inc. v Loiselle (2000, DC Mass) 91 F Supp 2d 401, RICO Bus Disp Guide (CCH) P 9859) and (criticized in
System Mgmt., Inc. v Loiselle (2000, DC Mass) 112 F Supp 2d 112).
Violation of constitution, antitrust laws, and civil rights laws, are not predicate acts under RICO. Jennings v Emry
(1990, CA7 Ind) 910 F2d 1434.
Since RICO is criminal statute that only piggy-backs civil remedies, it should be interpreted, for retroactivity purposes, as criminal statute. Snowden v Lexmark Int'l, Inc. (2001, CA6 Ky) 237 F3d 620, 17 BNA IER Cas 178, 57
USPQ2d 1438, RICO Bus Disp Guide (CCH) P 9988, 2001 FED App 14P, cert den (2001) 533 US 903, 150 L Ed 2d
231, 121 S Ct 2243, 17 BNA IER Cas 1216.
Congress did not intend for RICO to abrogate common law revenue rule (which holds that courts of one sovereign
will not enforce tax judgments or claims of another sovereign) with respect to claims brought by foreign sovereigns
under RICO; thus, RICO may not be used by foreign sovereign to seek recovery of lost tax revenues and tax enforcement costs as RICO damages. AG of Can. v R.J. Reynolds Tobacco Holdings, Inc. (2001, CA2 NY) 268 F3d 103, RICO
Bus Disp Guide (CCH) P 10172 (criticized in United States v Pasquantino (2002, CA4 Md) 305 F3d 291) and cert den
(2002) 537 US 1000, 154 L Ed 2d 394, 123 S Ct 513.
Since Foreign Sovereign Immunities Act (28 USCS §§ 1602 et seq.) grants immunity to foreign sovereigns from
criminal prosecution (absent international agreement stating otherwise), foreign sovereign cannot be indicted in United
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18 USCS § 1961
States for predicate crimes under Racketeer Influenced and Corrupt Organizations Act (18 USCS §§ 1961 et seq.); thus,
since foreign sovereign cannot be so indicted for RICO predicate crimes, civil RICO claims cannot proceed against foreign sovereign. Keller v Cent. Bank of Nig. (2002, CA6 Ohio) 277 F3d 811, RICO Bus Disp Guide (CCH) P 10191.
Provisions of Patriot Act that were not passed did not alter application of revenue rule to foreign republics' claims
under Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1961 et seq., against tobacco companies seeking
to remedy tobacco companies' schemes to avoid republics' taxes, as failed legislative proposals had no operative effect
because they did not satisfy bicameralism and presidential signature or veto override requirements. Republic of Honduras v Philip Morris Cos. (2003, CA11 Fla) 341 F3d 1253, 16 FLW Fed C 982, cert den (2004) 540 US 1109, 157 L Ed
2d 896, 124 S Ct 1075.
In action by several European nations against tobacco companies alleging violations of Racketeer Influenced and
Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq., district court properly dismissed action pursuant to Fed. R.
Civ. P. 12(b)(6) on ground that revenue rule barred foreign sovereigns from bringing RICO suit to enforce their tax
laws; subsequent Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, Pub. L. No. 107-56, 115 Stat. 272, and its legislative history did not
constitute clear evidence of Congressional intent necessary to find that Congress had abrogated revenue rule. European
Cmty. v RJR Nabisco, Inc. (2004, CA2) 355 F3d 123, vacated, remanded, cert gr (2005, US) 161 L Ed 2d 845, 125 S Ct
1968.
Plaintiffs failed to show injury for purposes of standing for their civil Racketeer Influenced and Corrupt Organizations Acts, 18 USCS § 1961 et seq., action because their employer did not rely directly on defendants' alleged false
statements in its decision to fire plaintiffs; furthermore, causal connection between wrongdoing and harm was attenuated, because several independent causes intervened between defendants' alleged fraud and plaintiffs' termination. Anderson v Ayling (2005, CA3 Pa) 396 F3d 265, 176 BNA LRRM 2513, 150 CCH LC P 10447.
Where Ninth Circuit had recently held that plaintiff, who claimed that he was rendered unable to pursue gainful
employment while defending himself against unjust charges and unjustly incarcerated, adequately alleged injury to
business or property under RICO, that court found that plaintiff's complaint mirrored complaint in Diaz; plaintiff alleged that he suffered material decrease in his employment prospects by virtue of unjust and unconstitutional conviction
and, therefore, plaintiff adequately pled injury to business or property required to establish standing under RICO. Guerrero v Gates (2006, CA9 Cal) 442 F3d 697.
District court was not unreasonable in concluding that avoiding problems in application of foreign law favored
dismissal of case on forum non conveniens grounds, even though case included claim brought under Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS §§ 1961-1968, because case also included one claim of mismanagement and breach of fiduciary duty, implicating eleven provisions of Dutch Civil Code. Windt v Qwest Communs.
Int'l, Inc. (2008, CA3 NJ) 529 F3d 183.
Plaintiff's 2006 claim under Racketeer Influenced and Corruption Organizations Act (RICO), 18 USCS §§
1961-1968, was time-barred because it could not be disputed that his injury, and discovery of that injury, occurred when
jury declared holographic will invalid in 1978, and he failed to sufficiently allege fraudulent concealment; he did not
successfully allege successful concealment from him of his cause of action and some allegations of wrongdoing appeared to be merely inferences by him; moreover, plaintiff failed to allege due diligence necessary to satisfy elements of
fraudulent concealment; thus, his RICO claim was barred by four-year limitations period. Dummar v Lummis (2008,
CA10 Utah) 543 F3d 614.
18 USCS §§ 1961 et seq. creates functional offense rather than status offense; it is aimed at conduct, and if conduct
meets definitions provided in §§ 1961 et seq., then conduct is within meaning of such section; where RICO defines offense, there is no reason to allow court to impose additional definitions according to their own conceptions of what organized crime is or is not. Ralston v Capper (1983, ED Mich) 569 F Supp 1575.
Lender met threshold requirements for RICO claim, where lender's complaint described precise role and function of
each defendant in alleged enterprise, and described enterprise as ongoing with continuity of structure. First Guar.
Mortg. Corp. v Procopio (2002, DC Md) 217 F Supp 2d 633.
To sustain Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961, et seq. claim, plaintiff
must allege at minimum that defendant has engaged in "pattern of racketeering activity or collection of unlawful debt,"
pursuant to 18 USCS § 1962. Chisum v Vasquez (2003, DC Dist Col) 2003-1 USTC P 50372, 91 AFTR 2d 1791.
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18 USCS § 1961
Taxpayer's Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS §§ 1961-1968, claims failed to
survive motion to dismiss because taxpayer fell far short of heightened standard required by Fed. R. Civ. P. 9(b); taxpayer did not plead any facts supporting her allegation that one of government employees provided information and
consideration to individual in exchange for his allegedly false statements to Internal Revenue Service, and taxpayer did
not even mention remaining defendants by name, save conclusory assertion that defendants were "unwitting instruments
of extortion and racketeering in furtherance of common enterprise." Engel v Leeks (2004, DC Kan) 93 AFTR 2d 2393.
Congress intended RICO to apply extraterritorially but not in all cases; in determining whether statute should apply
extraterritorially in particular case, court should focus on character of activity and substantial, deleterious effects that
such activity has on U.S. Doe v State of Israel (2005, DC Dist Col) 400 F Supp 2d 86.
RICO did not apply extraterritorially to Israeli government defendants where defendants' actions, which involved
State of Israel's internal policies and national security during armed conflict, did not constitute legally cognizable
wrong; in any event, facts did not support extraterritorial application of RICO to solely personal harms suffered overseas that only marginally and tangentially impacted American commerce; notions of comity further supporting conclusion that asserting extraterritorial jurisdiction in instant case would have been unreasonable since, among other things, it
would have greatly intruded on Executive Branch's exclusive authority over America's foreign affairs. Doe v State of
Israel (2005, DC Dist Col) 400 F Supp 2d 86.
Newspaper executive was not entitled to judgment on his claim that defendants violated RICO, 18 USCS § 1961,
because while corporation and its principals were certainly suspect with regard to its general business dealings, executive had not attempted to prove enterprise or pattern of racketeering activity as required under RICO. Masterson v St.
George Unlimited, Inc. (2008, ND Ill) 545 F Supp 2d 819.
Unpublished Opinions
Unpublished: Defendant's Racketeer Influenced and Corrupt Organizations Act convictions under 18 USCS § 1961
and 18 USCS § 1962 were affirmed because he failed to move for judgment of acquittal during trial or within seven
days after jury was discharged and as such failed to preserve appeal; defendant also failed to show that manifest miscarriage of justice would result if his convictions were not overturned. United States v Cook (2005, CA6 Mich) 124 Fed
Appx 367.
7. Relationship to State law
Racketeer Influenced and Corrupt Organizations Act (RICO) is federal law proscribing various racketeering acts
which have effect on interstate or foreign commerce, and certain of those racketeering, or predicate acts violate state
law, and RICO incorporates elements of those state offenses for definitional purposes, but state law offenses are not
gravamen of RICO offenses, since RICO was not designed to punish state law violations but to punish impact on commerce caused by conduct which meets statute's definition of racketeering activity. United States v Forsythe (1977, CA3
Pa) 560 F2d 1127.
18 USCS §§ 1961 et seq. of Federal Racketeering Act forbids "racketeering," not state offenses per se; state offenses referred to in federal act are definitional only; racketeering, which is federal crime, is defined as matter of legislative
draftsmanship by reference to state law crimes but this does not mean that federal statute punishes same conduct as
reached by state law. United States v Frumento (1977, CA3 Pa) 563 F2d 1083, cert den (1978) 434 US 1072, 55 L Ed
2d 775, 98 S Ct 1256 and cert den (1978) 434 US 1072, 55 L Ed 2d 776, 98 S Ct 1258.
18 USCS § 1961(6) defining unlawful debt, applies in state that forbids gambling that has no specific statutory proscription of business of gambling. United States v Salinas (1977, CA5 Tex) 564 F2d 688, cert den (1978) 435 US 951,
55 L Ed 2d 800, 98 S Ct 1577.
By incorporating state substantive law as predicate for federal racketeering charge, Congress did not incorporate
state procedural and evidentiary rules into RICO statute (18 USCS § 1961). United States v Paone (1986, CA2 NY) 782
F2d 386, 20 Fed Rules Evid Serv 577, cert den (1986) 479 US 882, 93 L Ed 2d 246, 107 S Ct 269 and cert den (1987)
483 US 1019, 97 L Ed 2d 761, 107 S Ct 3261.
Although district court properly dismissed pursuant to Fed. R. Civ. P. 12(b)(6) workers compensation claimant's
action against his employer, insurer, and physician for alleged violation of Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq., district court abused its discretion in exercising pendent jurisdiction under
28 USCS § 1367(c)(3) over claim for intentional infliction of emotional distress (IIED) under Michigan common law
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18 USCS § 1961
because IIED claim had no bearing on RICO claim and because IIED claim implicated complex aspects of Michigan
law. Moon v Harrison Piping Supply (2006, CA6 Mich) 465 F3d 719, 2006 FED App 365P.
In federal prosecution of alleged street-gang members for violation of Racketeer Influenced and Corrupt Organizations Act, 18 USCS §§ 1961 et seq., and for various predicate offenses related to drugs, firearms, robbery, and murder,
district court erred in ruling that police reports created by city police officers prior to federal prosecution did not qualify
for discovery exception under Fed. R. Crim. P. 16(a)(2) and were therefore discoverable by defendants pursuant to Fed.
R. Crim. P. 16(a)(1)(E); further, Government did not waive Fed. R. Crim. P. 16(a)(2) protection by turning over to defendants copies of reports in which identities of witnesses were redacted. United States v Fort (2007, CA9 Cal) 472 F3d
1106.
District court improperly dismissed insured's civil Racketeer Influenced and Corrupt Organizations Act (RICO),
claim against defendant insurer because § 2 of McCarran-Ferguson Act, 15 USCS § 1012, did not preclude RICO's applicability given New Jersey's Insurance Trade Practices Act (ITPA), N.J. Stat. Ann. §§ 17:29B-1-19, because upon
review of Humana factors and finding that (1) insured had common law right of action available to him for recoupment
of benefits; (2) it was possible that damages would be available for insured's claim under Consumer Fraud Act, N.J.
Stat. Ann. § 56:8-2; (3) insurer's racketeering scheme would constitute distinct and egregious tort under New Jersey law
such that punitive damages would be available; (4) there was no "declared state policy" mandating exclusivity of ITPA
as remedy for insurance fraud; and (5) deeming federal civil RICO suits to be unavailable would deprive insurers of
important weapon of self-defense, it seemed clear that New Jersey's insurance scheme did not intend to be exclusive and
that RICO did not disturb or interfere with New Jersey's state insurance regime but, rather, supplemented statutory and
common law claims for relief that were available to insured. Weiss v First Unum Life Ins. Co. (2007, CA3 NJ) 482 F3d
254.
Pursuant to 18 USCS § 1961, federal courts do not have exclusive jurisdiction over RICO claims. Feige v Sechrest
(1995, ED Pa) 896 F Supp 403, affd (1996, CA3 Pa) 90 F3d 846.
Count charging organized crime figure with arson conspiracy as part of racketeering indictment need not be dismissed, even though it alleges only agreement and not overt act as required by New York law, because federal RICO
statute was not intended to require government to plead state-law crimes under 18 USCS § 1961(1)(A) in accordance
with specific pleading requirements of state law. United States v Galasso (2000, ED NY) 118 F Supp 2d 322, subsequent app (2002, CA2 NY) 50 Fed Appx 488.
Where court had original jurisdiction over Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1961 et
seq., claims that were dismissed, court could, but was not required to, continue to exercise supplemental jurisdiction
over state claims. Motorola Credit Corp. v Uzan (2003, SD NY) 274 F Supp 2d 481, affd in part and vacated in part,
remanded, in part (2004, CA2 NY) 388 F3d 39, cert den (2005, US) 125 S Ct 2270.
Federal court complaint alleging RICO violations was not barred under res judicata doctrine by parallel state court
action because state action, which resulted in default order due to discovery misconduct, did not result in final judgment
and federal court plaintiff had not had chance to pursue RICO claims in state action; nor was abstention required since
abstaining would not avoid piecemeal litigation, claims involved federal law, and federal forum was not inconvenient
for any party. World Wrestling Entm't, Inc. v Jakks Pac., Inc. (2006, SD NY) 425 F Supp 2d 484.
McCarran-Ferguson Act did not preclude seniors citizens' Racketeer Influenced and Corrupt Organizations Act
(RICO), 18 USCS §§ 1961 et seq., claims because RICO claims would not impair, impede, or supersede state law with
regard to state's regulation of insurance. In re Nat'l Western Life Ins. Deferred Annuities Litig. (2006, SD Cal) 467 F
Supp 2d 1071.
Allegation that defendants unlawfully misappropriated and converted to benefit of enterprise assets of debtors, and
that conversion of assets constituted acts of theft and related crimes and fraudulent practices as defined by N.J. Stat.
Ann. § 2C:41-1, lacked sufficiency to state claim under state RICO statute and Federal RICO statute, 18 USCS § 1961 et
seq. Fox v Congress Fin. Corp. (In re Target Indus.) (2005, BC DC NJ) 328 BR 99.
State's anti-racketeering statute was not pre-empted by RICO (18 USCS §§ 1961 et seq.) since there was no evidence that Congress intended to pre-empt field, and since state statute, which dealt with intrastate concerns, did not conflict with federal provision, aimed at preventing influx of organized crime into enterprises, which was geared towards
interstate and international business. Alvers v State (1986, Ind App) 489 NE2d 83.
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Mich. Comp. Laws Serv. § 750.159i(1) is unambiguous; therefore, appellate court erred by discussing Racketeer
Influenced and Corrupt Organizations Act, 18 USCS § 1961 et seq., and burdens of proof outlined therein. People v
Guerra (2003) 469 Mich 966, 671 NW2d 535.
8.--Acquittal on or dismissal of predicate act charges
Acquittal in state court of all "chargeable" state offenses that constitute predicate acts for violation of 18 USCS §
1961 does not preclude conviction for racketeering activity. United States v Licavoli (1984, CA6 Ohio) 725 F2d 1040,
14 Fed Rules Evid Serv 1782, cert den (1984) 467 US 1252, 82 L Ed 2d 840, 104 S Ct 3535.
Motion to dismiss RICO claims is denied in action by disappointed bidder against successful competitor who obtained government contract, where claims were based on racketeering pattern arising out of mail and wire fraud under
18 USCS §§ 1341 and 1343, but where state fraud claims had been dismissed, because convictions for mail and wire
fraud do not depend on violations of state law. John C. Holland Enterprises, Inc. v J.P. Mascaro & Sons, Inc. (1987,
ED Va) 653 F Supp 1242, affd without op (1987, CA4 Va) 829 F2d 1120.
9.--Defenses
State law defenses to state law conspiracy charges are inapplicable in federal RICO action, but if state law is implicated, state substantive defenses are incorporated into federal law, not state procedural defenses. United States v Muskovsky (1988, CA7 Ill) 863 F2d 1319, cert den (1989) 489 US 1067, 103 L Ed 2d 813, 109 S Ct 1345.
Intrusion of RICO's substantial damage provisions into state insurance regulatory program may so impair state law
as to bar application of RICO. Doe v Norwest Bank Minn., N.A. (1997, CA8 Minn) 107 F3d 1297, RICO Bus Disp Guide
(CCH) P 9218, reh, en banc, den (1997, CA8 Minn) 1997 US App LEXIS 11337 and (criticized in Sabo v Metropolitan
Life Ins. Co. (1998, CA3 Pa) 137 F3d 185, RICO Bus Disp Guide (CCH) P 9440) and (criticized in Edwards v Your
Credit (1998, CA5 La) 148 F3d 427) and (ovrld as stated in Cunningham v PFL Life Ins. Co. (1999, ND Iowa) 42 F
Supp 2d 872, RICO Bus Disp Guide (CCH) P 9721) and (criticized in Bancoklahoma Mortg. Corp. v Capital Title Co.
(1999, CA10 Okla) 194 F3d 1089, RICO Bus Disp Guide (CCH) P 9790, 1999 Colo J C A R 6028).
Plaintiff trading card purchasers lacked standing to bring civil claims under Racketeer Influenced and Corrupt Organizations Act, 18 USCS §§ 1961-1968, because their disappointment upon not finding higher value "insert" card in
package is not an injury to property. Chaset v Fleer/Skybox Int'l (2002, CA9 Cal) 300 F3d 1083, 2002 Daily Journal
DAR 9529, RICO Bus Disp Guide (CCH) P 10304.
State RICO claims, which were more closely analogous to state abuse of process than intentional interference with
constitutional relationship, was preempted by federal patent laws. Semiconductor Energy Lab. Co. v Samsung Elecs. Co.
(2000, CA FC) 204 F3d 1368, 54 USPQ2d 1001, RICO Bus Disp Guide (CCH) P 9879, reh, en banc, den (2000, CA
FC) 2000 US App LEXIS 10133 and cert den (2001) 531 US 1190, 149 L Ed 2d 104, 121 S Ct 1187 and cert den (2001)
531 US 1190, 149 L Ed 2d 104, 121 S Ct 1187.
State procedural defenses are not available to RICO defendants. United States v Joseph (1981, ED Pa) 526 F Supp
504.
Defendant may not defend RICO (18 USCS §§ 1961 et seq.) prosecution based on alleged failure to adhere to all of
particular elements of state law which defendant could invoke in state prosecution; instead, federal court may only look
to state law to determine whether conduct is punishable by more than one year, not whether this particular defendant
may be punished for conduct; thus, defendant's motion for dismissal claiming that due to his young age at time of committing acts, he could not have been prosecuted as adult under state law, was denied since it was premised on state law
defenses and procedural remedies not contemplated by definition of act of racketeering in § 1961. United States v Wai
Ho Tsang (1986, SD NY) 632 F Supp 1336.
Motion to dismiss RICO (18 USCS §§ 1961 et seq.) suit for lack of standing of plaintiff corporation is denied, because corporation is not barred from bringing suit under RICO even though sole shareholder acquired shares in corporation after challenged transactions. American Credit Indem. Co. v Legge (1993, SD NY) 829 F Supp 649.
Fact that government officials have been investigating tax deficiencies and that judges on Tax Court have ruled in
government's favor on deficiency issues do not give rise to any inference of impropriety much less evidence conspiracy
involving pattern of racketeering activity. Chisum v Vasquez (2003, DC Dist Col) 2003-1 USTC P 50372, 91 AFTR 2d
1791.
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Appellate court will not allow plaintiff to proceed with Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961, et seq. claim against federal judge without something more than conclusory allegations of participation in, or conspiracy with respect to, actionable racketeering activity. Chisum v Vasquez (2003, DC Dist Col)
2003-1 USTC P 50372, 91 AFTR 2d 1791.
Where defendants were granted summary judgment in prior state court case as to plaintiffs' counterclaims, plaintiffs' amended civil Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq., claims were
not barred by res judicata, as plaintiffs alleged conduct under RICO which extended beyond date when they filed their
state-court counterclaims and plaintiffs did not assert claim based on that conduct in their amended state-court counterclaims. Waddell & Reed Fin., Inc. v Torchmark Corp. (2003, DC Kan) 292 F Supp 2d 1270.
Where arrestees were arrested for obstructing police officers' legal duties and where arrestees alleged that they were
kidnapped and robbed on two occasions and that defendants committed "extortion" by threatening to arrest them,
"one-action" rule under Kansas law did not prohibit consideration of claim under Racketeer Influenced Corrupt Organizations Act, 18 USCS § 1961 et seq., against officers. McCormick v City of Lawrence (2004, DC Kan) 325 F Supp 2d
1191.
Unpublished Opinions
Unpublished: In action by group of disadvantaged business enterprises (DBE) claiming civil violation of Racketeer
Influenced and Corrupt Organizations Act based on fraudulent administration of DBE program by Kentucky Transportation Cabinet and two state officials in their official capacities, court properly dismissed claim based on sovereign immunity; Congress did not abrogate state sovereign immunity under U.S. Const. amend. XI, and Ky. Const. § 231 showed
that Kentucky did not intend to subject itself to suit in federal court. Chaz Constr., LLC v Codell (2005, CA6 Ky) 137
Fed Appx 735.
Unpublished: District court properly granted summary judgment in favor of tanning salon franchisor in franchisee's
action alleging fraud and claims under state Franchise Investment Law, and RICO Act, because franchisee did not establish reasonable reliance on allegedly false profit and loss statements that were inconsistent and confusing; no reasonable prospective franchisee could have relied upon several allegedly false profit and loss statements presented by
franchisor but rather would have been prompted to further inquiry and would have demanded explanation of widely
divergent and internally inconsistent figures in statements. Aron Alan, LLC v Tanfran, Inc. (2007, CA6 Mich) 2007
FED App 443N.
10.--Statute of limitations
For purposes of determining when limitations period begins to run on plaintiff's civil cause of action for damages
brought for RICO violations, (1) "last predicate act" rule used by Third Circuit under which plaintiff's claim for damages for pattern of racketeering activity may accrue upon occurrence of last predicate act which is part of pattern of activity is not proper interpretation of law; plaintiff who has not exercised reasonable diligence to discover civil RICO claim
may not rely on doctrine of fraudulent concealment to toll limitations period or to estop defendant from asserting limitations defense. Klehr v A.O. Smith Corp. (1997) 521 US 179, 138 L Ed 2d 373, 117 S Ct 1984, 97 CDOS 4621, 97 Daily
Journal DAR 7638, RICO Bus Disp Guide (CCH) P 9295, 11 FLW Fed S 9.
In holding that start of limitations period applicable to civil treble-damages action under Racketeer Influenced and
Corrupt Organizations Act (RICO) (18 USCS §§ 1961 et seq.) is not governed by "injury and pattern discovery" accrual
rule--under which civil claim would accrue only when claimant discovers, or should discover, both injury and pattern of
racketeering activity--the United States Supreme Court does not unsettle understanding that federal statutes of limitations are generally subject to equitable principles of tolling. Rotella v Wood (2000) 528 US 549, 145 L Ed 2d 1047, 120
S Ct 1075, 2000 CDOS 1357, 2000 Daily Journal DAR 1905, RICO Bus Disp Guide (CCH) P 9837, 2000 Colo J C A R
952, 13 FLW Fed S 127.
Start of limitations period applicable to civil treble-damages action under Racketeer Influenced and Corrupt Organizations Act (RICO) (18 USCS §§ 1961 et seq.)--which provides that (1) it is unlawful to conduct enterprise's affairs
through pattern of racketeering activity (18 USCS § 1962(c)), (2) pattern requires at least two acts of racketeering activity, last of which occurs within 10 years after commission of prior act (18 USCS § 1962(c)), and (3) person injured by
RICO violation can bring civil RICO action (18 USCS § 1964(c))--is not governed by "injury and pattern discovery"
accrual rule, under which civil claim would accrue only when claimant discovers, or should discover, both injury and
pattern of racketeering activity; thus, action brought by former patient of psychiatric facility is untimely, where (1) pa-
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tient files civil RICO claim in Federal District Court (a) 11 years after he was discharged from facility, and (b) 3 years
after patient learns that facility's parent company and one of its directors pleaded guilty to charges of criminal fraud, and
(2) United States Supreme Court has determined that limitations period applicable to civil RICO is 4-year period applicable to Clayton Act (15 USCS § 15b); for such purposes, injury-and-pattern-discovery rule is unsound because (1) it
would extend potential limitations period for most civil RICO cases well beyond time when plaintiff's cause of action is
complete, (2) such rule would allow proof more remote from time of trial and, hence, litigation more at odds with basic
policies of all limitations provisions, which include (a) repose, (b) elimination of stale claims, and (c) certainty about
plaintiff's opportunity for recovery and defendant's potential liabilities, (3) in circumstance of medical malpractice, person suffering from inadequate treatment is responsible for determining within limitations period then running whether
inadequacy is malpractice, (4) there is no good reason for accepting lesser degree of responsibility on RICO plaintiff's
part, (5) there is clear legislative record of congressional reliance on Clayton Act when RICO was under consideration,
and (6) Clayton Act's injury-focused accrual rule was well established by time civil RICO was enacted. Rotella v Wood
(2000) 528 US 549, 145 L Ed 2d 1047, 120 S Ct 1075, 2000 CDOS 1357, 2000 Daily Journal DAR 1905, RICO Bus
Disp Guide (CCH) P 9837, 2000 Colo J C A R 952, 13 FLW Fed S 127.
Adoption of "injury and pattern discovery" accrual rule, under which civil claim would accrue only when claimant
discovers, or should discover, both injury and pattern of racketeering activity--for purposes of civil treble-damages action under Racketeer Influenced and Corrupt Organizations Act (RICO) (18 USCS §§ 1961 et seq.), where United States
Supreme Court has determined that limitations period applicable to such action is 4-year period applicable to Clayton
Act (15 USCS § 15b)--is not supported by arguments that (1) Supreme Court has supposedly undercut Clayton Act
analogy by holding that RICO has no racketeering injury requirement comparable to antitrust injury requirement under
Clayton Act, or (2) without pattern discovery rule, some plaintiffs allegedly might be barred from suit by Rule 9(b) of
Federal Rules of Civil Procedure, which requires that fraud be pleaded with particularity. Rotella v Wood (2000) 528
US 549, 145 L Ed 2d 1047, 120 S Ct 1075, 2000 CDOS 1357, 2000 Daily Journal DAR 1905, RICO Bus Disp Guide
(CCH) P 9837, 2000 Colo J C A R 952, 13 FLW Fed S 127.
In holding that start of limitations period applicable to civil treble-damages action under Racketeer Influenced and
Corrupt Organizations Act (RICO) (18 USCS §§ 1961 et seq.)--which provides that (1) it is unlawful to conduct enterprise's affairs through pattern of racketeering activity (18 USCS § 1962(c)), (2) pattern requires at least two acts of racketeering activity, last of which occurs within 10 years after commission of prior act (18 USCS § 1962(c)), and (3) person
injured by RICO violation can bring civil RICO action (18 USCS § 1964(c))--is not governed by "injury and pattern
discovery" accrual rule, under which civil claim would accrue only when claimant discovers, or should discover, both
injury and pattern of racketeering activity, United States Supreme Court does not decide (1) whether civil RICO allows
for cause of action when second predicate act follows alleged injury, or (2) what limitations period might apply in such
case. Rotella v Wood (2000) 528 US 549, 145 L Ed 2d 1047, 120 S Ct 1075, 2000 CDOS 1357, 2000 Daily Journal
DAR 1905, RICO Bus Disp Guide (CCH) P 9837, 2000 Colo J C A R 952, 13 FLW Fed S 127.
Reference to state law in 18 USCS § 1961(1)(A) is for purpose of defining conduct prohibited and is not meant to
incorporate state statute of limitations or procedural rules. United States v Brown (1977, CA5 Ga) 555 F2d 407, reh
den (1977, CA5 Ga) 559 F2d 29 and cert den (1978) 435 US 904, 55 L Ed 2d 494, 98 S Ct 1448.
Words "chargeable under State law" in 18 USCS § 1961(1)(A) mean "chargeable under State law at the time the offense was committed"; therefore, defendant convicted under 18 USCS § 1962 for engaging in pattern racketeering activity could not contend that acts of bribery for which he was charged were barred by relevant state statute of limitations.
United States v Davis (1978, CA3 Pa) 576 F2d 1065, 3 Fed Rules Evid Serv 89, cert den (1978) 439 US 836, 58 L Ed 2d
132, 99 S Ct 119.
"Pattern" of racketeering activity may include forbearance; defendant police officer's forbearance from arresting
drug dealers in return for cocaine constituted predicate acts within meaning of RICO. United States v Ruiz (1990, CA1
Mass) 905 F2d 499.
"Relationship" among predicate acts does not by itself define "pattern" for purpose of RICO; predicate acts themselves must be shown to amount to threat of continuing activity, either as closed period of repeated conduct or past
conduct that projects into future. United States Textiles, Inc. v Anheuser-Busch Cos. (1990, CA7 Ill) 911 F2d 1261,
motion to strike den, claim dismissed (1988, ND Ill) 1988 US Dist LEXIS 19357.
District court properly granted summary judgment under Fed. R. Civ. P. 56 dismissing building owners' civil
claims against asbestos manufacturers under Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS §
1961 et seq.; claims for monitoring and remediation costs of asbestos-containing materials in buildings were barred by
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18 USCS § 1961
four-year statute of limitations because owners did not produce evidence sufficient to refute manufacturers' claim that
owners should have known of alleged injuries more than four years prior to filing of RICO complaint; actual injury was
not required to trigger statute of limitations, and owners did not demonstrate reasonable diligence in discovering injuries
for purposes of equitable tolling under fraudulent concealment theory. Prudential Ins. Co. of Am. v United States Gypsum Co. (2004, CA3 NJ) 359 F3d 226.
Developer's action under Racketeer Influenced & Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq., was
barred by statute of limitations because, while there were variety of alleged acts that occurred over series of years, developer's continuing violation defense to limitations period failed in that alleged violations were fully established years
earlier, thereby triggering statute of limitations. Limestone Dev. Corp. v Vill. of Lemont (2008, CA7 Ill) 520 F3d 797.
Civil racketeering claim is not stated under 18 USCS § 1961 (5), where complaint alleges law firm offered to bribe
second firm to breach partnership agreement, because "pattern" requirement is lacking, notwithstanding that law firm
continued to pay under terms of bribe; no multiple acts, including continuous bribery, are involved. Clapp v Greene
(1990, SD NY) 743 F Supp 273, affd without op (1991, CA2 NY) 930 F2d 912, cert den (1991) 502 US 868, 116 L Ed
2d 157, 112 S Ct 197.
Civil racketeering claim is stated under 18 USCS § 1961(5), where minority stockholder's complaint alleges that
corporate directors engaged in mail fraud over 2 years, resulting in harm to corporation's stockholders and intended to
accomplish variety of aims, including diminishing minority stockholder's say in corporation's affairs, because "continuity plus relationship" is demonstrated and thus "pattern" of racketeering activity is alleged. Grafman v Century Broadcasting Corp. (1990, ND Ill) 743 F Supp 544, CCH Fed Secur L Rep P 95616.
Nursing home seller's RICO claim against buyers must be dismissed, where it appears that sole purported victim of
single scheme is complaining of single injury, i.e., economic loss from its sale of nursing home, because allegation of
multiple acts of fraud that were part of single, discrete, and otherwise lawful commercial transaction is insufficient to
raise RICO claim. Interwest Medical Corp. v Longterm Care Foundation (1990, ND Tex) 748 F Supp 467.
Alleged members of purportedly infamous street gang are not entitled to dismissal of criminal RICO indictment,
although it may be true that RICO is obscure at margins, where no one has ever doubted that RICO proscribes commission of drug dealing, kidnapping, and murder at behest and in furtherance of wholly criminal organization, because
vagueness challenge to statutes, like RICO, that do not implicate First Amendment freedoms are examined in light of
particular facts of case at hand. United States v Andrews (1990, ND Ill) 749 F Supp 1520.
Alleged RICO victim's action against insurance company is barred by 4-year statute of limitations, where victim
filed state-court action 5 years previously, alleging same fraud on which RICO claim is based, because RICO cause of
action accrues at time victim discovered or should have discovered injury and knew or should have known that his injury was part of pattern of racketeering activity. Calabrese v State Farm Mut. Auto. Ins. Co. (1992, ND Ill) 789 F Supp
264.
Motion to dismiss RICO complaint is denied, where city accused city officials of bribery, kickbacks, and extortion,
in violation of RICO, 18 USCS § 1961, and officials claimed that city lacked standing, and that statute of limitations had
expired, because city may hold legal or beneficial interest in property, and is therefore "person" within meaning of 18
USCS § 1931(3), and city brought action within four years of its discovery of officials' conduct, and action was therefore timely. City of Chicago Heights v LoBue (1994, ND Ill) 841 F Supp 819, RICO Bus Disp Guide (CCH) P 8504.
Action brought under 18 USCS § 1961 by trust established as result of bankruptcy of asbestos producer against tobacco product manufacturers, arising from manufacturers' alleged role in contributing to asbestos-related injuries of
trust's claimants, accrued for statute of limitations purposes when claimant asserting asbestos-related injuries filed claim
with trust. Falise v American Tobacco Co. (2000, ED NY) 91 F Supp 2d 525.
In action by former temporary employees against their former employer alleging violations of 29 USCS § 1140 and
Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1961 et seq., employer was granted summary judgment under Fed. R. Civ. P. 56(c) where employer met its initial burden of demonstrating that employees did not file
their lawsuit until after limitations period had expired as employees' claims under 29 USCS § 1140 accrued upon notification that they were ineligible to participate in employer's benefit plans, employees failed to meet their burden of
proving that employer's fraudulent concealment tolled their claims as there was no evidence suggesting that any fraud
by employer delayed employees' discovery of their 29 USCS § 1140 claims, employees failed to show that employer
should be estopped from asserting statute of limitations as defense, and employer's actions did not constitute continuing
violation of 29 USCS § 1140 as alleged discrimination was apparent when employees were notified that they were ineli-
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18 USCS § 1961
gible to participate in employer's benefit plans. Berry v Allstate Ins. Co. (2003, ED Tex) 252 F Supp 2d 336, 30 EBC
1236, affd (2004, CA5 Tex) 84 Fed Appx 442, 31 EBC 2769.
Equitable tolling did not operate to save time barred Racketeer Influenced Corrupt Organizations Act claims
brought by town where town failed to exert due diligence in attempting to establish fraudulent concealment as required
to toll limitations period because neither existence of dominant political party nor alleged widespread corruption, relieved town board members, acting on behalf of town, of their fiduciary duty to exercise due diligence in authorizing
and conducting municipal business. Town of Poughkeepsie v Espie (2005, SD NY) 402 F Supp 2d 443.
Estate administrator unquestionably knew or should have known that decedent was injured during time period long
before fourth denial of decedent's disability claim by insurers; because there were no allegations that supported conclusion that statute of limitations had to tolled, administrator's Racketeer Influenced and Corrupt Organizations, 18 USCS §
1961 et seq., claim was untimely and was dismissed. Zalesiak v UnumProvident Corp. (2007, ND Ill) 43 EBC 1697.
Unpublished Opinions
Unpublished: Claim under 18 USCS § 1961 et seq. was untimely where it was filed more than four years after settlement between insured, insurer, and bank; although employee did not know exact amount of settlement until later, he
had necessary information to file claims alleging conspiracy to prevent him from asserting defenses and counterclaims.
Sims v Ohio Cas. Ins. Co. (2005, CA6 Ky) 151 Fed Appx 433.
Unpublished: Summary judgment was properly entered against former debtors who asserted Racketeer Influenced
and Corrupt Organizations Act (RICO), 18 USCS §§ 1961 et seq., claims because they were time-barred since (1) four
year statute of limitations applied to debtors' RICO claims; (2) injury that they complained of was two creditors' alleged
collection of "unlawful debt" as defined by 18 USCS § 1961(6); (3) last act that could constitute collection of unlawful
debt by creditors had occurred in 1994, which was more than four years before debtors filed their suit; and (4) debtors
could not assert RICO claims arising from default judgment entered against them in state court suit filed by creditors
because that judgment had not been declared void and judgments entered by courts of competent jurisdiction did not fall
within definition of "unlawful debt" as defined in § 1961(6). Kramer v Kubicka (2007, CA3 NJ) 2007 US App LEXIS
5802.
II.PARTICULAR TERMS
A.In General
1.Racketeering Activity 11. Generally
In action by commercial borrowers against their bank alleging RICO (18 USCS §§ 1961 et seq.) violations, court
rejected "racketeering enterprise injury" rule and stated that "racketeering activity" consisted of nothing more or less
than committing predicate act; thus, compensable injury is harm caused by predicate act relied upon, and plaintiff can
recover for both direct harm flowing from defendant's conduct and indirect harm such as "competitive injury." Wilcox v
First Interstate Bank, N.A. (1987, CA9 Or) 815 F2d 522, 1987-1 CCH Trade Cases P 67530.
Bank investor's failure to inform plaintiff, potential purchaser of land, that real estate appraisal was needed for purchase of land, resulting in failure of real estate option transaction, may have been in breach of state law in aid of RICO
enterprise, but such breach does not transform act into RICO predicate act. Marriott Bros. v Gage (1990, CA5 Tex)
911 F2d 1105, reh den (1990, CA5) 1990 US App LEXIS 18746 and (criticized in Wagh v Metris Direct, Inc. (2003,
CA9 Cal) 363 F3d 821, 2003 CDOS 9693).
Wrongful termination of employee for refusing to participate in employer's cover-up of illegal bribes to obtain foreign contracts is not predicate act as defined by 18 USCS § 1961 and therefore does not give employee standing because
act was not essential to RICO conspiracy. Reddy v Litton Indus. (1990, CA9 Cal) 912 F2d 291, 116 CCH LC P 10270,
cert den (1991) 502 US 921, 116 L Ed 2d 272, 112 S Ct 332, 91 Daily Journal DAR 12655; Kramer v Bachan Aerospace Corp. (1990, CA6 Mich) 912 F2d 151, 116 CCH LC P 10259.
Mobile home park lease stating it is "subject" to state law does not misrepresent itself as being in "conformity" to
state law, and letter accompanying lease promising that park will pay for installation of individual gas and water meters
while requiring residents to pay for capital improvement is not misrepresentation where it was not shown that meters
were capital improvements; hence, lease and letter did not constitute RICO predicate acts of mail fraud. Rothman v
Vedder Park Management (1990, CA9 Cal) 912 F2d 315.
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18 USCS § 1961
Subscribers to third-party payor, who alleged insurer passed along increased costs of treating smoking-related injuries' higher premiums, failed to state claim because injuries were not proximately caused by tobacco companies, thus
they had no standing to sue. Perry v Am. Tobacco Co. (2003, CA6 Tenn) 324 F3d 845, 30 EBC 1329, CCH Prod Liab
Rep P 16592, 2003 FED App 105P.
District court properly awarded summary judgment to defendants with regard to employee's Racketeer Influenced
and Corrupt Organizations Act, 18 USCS § 1861 et seq., suit where there was no genuine issue of material fact with
regard to employer's subscriber status to state's workers' compensation system; therefore, there was no genuine issue of
material fact that employer was engaged in scheme to defraud its employees by lying about its subscriber status during
years at issue. Patterson v Mobil Oil Corp. (2003, CA5 Tex) 335 F3d 476, reh den, reh, en banc, den (2003, CA5 Tex)
77 Fed Appx 289 and cert den (2004) 540 US 1108, 157 L Ed 2d 895, 124 S Ct 1071.
Citizen's allegation of loss of job did not create sufficient nexus between Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq., act and his business or property; as citizen failed to allege injury to business or property, he lacked standing to sue under RICO and dismissal was proper. Diaz v Gates (2004, CA9 Cal) 354
F3d 1169, reprinted as amd (2004, CA9 Cal) 380 F3d 480, reh, en banc, gr, vacated (2004, CA9) 389 F3d 869.
Racketeering activity is, as general matter and as defined in 18 USCS § 1961(1), based largely on greed; therefore,
that class of activity is sufficiently economic in nature that it may be aggregated for Commerce Clause purposes. United
States v Nascimento (2007, CA1 Mass) 491 F3d 25.
For purposes of 18 USCS § 1961 each act of criminal activity is counted as act of racketeering activity, even if numerous acts arise out of same episode. Noland v Gurley (1983, DC Colo) 566 F Supp 210, CCH Fed Secur L Rep P
99439.
In enacting Racketeering Influenced and Corrupt Organizations Act and its civil remedy provisions, Congress manifested intent that these remedies be available only in relation to activities having some association with racketeering as
that term is used in ordinary discourse, and Congress left to Supreme Court authority and responsibility for defining
more precisely kind of association with racketeering activity that is prerequisite to RICO civil remedy. Exeter Towers
Associates v Bowditch (1985, DC Mass) 604 F Supp 1547.
Government fails properly to allege civil racketeering claim under 18 USCS § 1961(1)(B), where only 2 predicate
acts alleged are violations of statute that did not exist at time of alleged act in question and thus are not "indictable" under 18 USCS § 1512, because alleged acts are not "racketeering activity" under § 1961(1)(B). United States v Bonanno
Organized Crime Family of La Cosa Nostra (1988, ED NY) 695 F Supp 1426.
RICO claims against foreign competitor should be dismissed, even if predicate acts of wire and mail fraud were
sufficiently pleaded, because competitor is foreign sovereign not subject to criminal jurisdiction of U.S. courts, and
could not commit mail or wire fraud "indictable" under U.S. statutes within meaning of 18 USCS § 1961(1)(B). Gould,
Inc. v Mitsui Mining & Smelting Co. (1990, ND Ohio) 750 F Supp 838.
Real estate developer's RICO action against town officials and private individuals, alleging conspiracy to use town
as enterprise to extort large sums of money and to extort real and personal property, is not dismissed, where plaintiff
adequately pleaded claims involving extortion and violations of 18 USCS § 1951, including grand larceny pursuant to
state law, against each defendant, because alleged predicate acts clearly constitute racketeering activity as defined by 18
USCS § 1961. DeFalco v Dirie (1996, SD NY) 923 F Supp 473 (ovrld in part as stated in Wiwa v Royal Dutch Petroleum Co. (2002, SD NY) RICO Bus Disp Guide (CCH) P 10216).
Claims that defendants defrauded operator of aviation business in violation of 42 USCS § 1983 and Racketeer Influenced and Corrupt Organizations Act did not satisfy Fed. R. Civ. P. 9(b); complaint lumped defendants together and
failed to provide specifics, making it impossible for any one defendant to respond to claims of misrepresentation. Barry
Aviation, Inc. v Land O'Lakes Mun. Airport Comm'n (2003, WD Wis) 219 FRD 457, revd, remanded (2004, CA7 Wis)
377 F3d 682.
Anonymous Palestinian, who sought to hold defendants liable under 18 USCS § 1962(b), (c), and (d) for their
fundraising and contribution in support of settlers in West Bank region and Israeli government and officials (government), never alleged that defendants themselves engaged in any of specific predicate offenses listed in 18 USCS §
1961(1)(A), but only that they facilitated those offenses, which were carried out by government and settlers; as such,
Palestinian's allegations did not demonstrate "racketeering activity;" Palestinian also failed clearly to allege criminal
enterprise as required under 18 USCS § 1962(b) and (c). Doe v State of Israel (2005, DC Dist Col) 400 F Supp 2d 86.
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Plaintiff former federal attorney's RICO claims under 18 USCS § 1964 against defendants, her former agency employer and supervisors, alleging false information was given to Congress, were dismissed because attorney was not intended target of alleged RICO violations as required by 18 USCS § 1961 and falsification of information to Congress
was not racketeering activity under 18 USCS § 1341, 18 USCS § 1512, or § 1961(1). Weaver v Bratt (2006, DC Dist
Col) 421 F Supp 2d 25.
In debtor's adversary proceeding, bankruptcy court lacked subject matter jurisdiction over claims of proposed unnamed class members because claims arising under Truth in Lending Act, 15 USCS § 1601 et seq., and Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1961 et seq., did not "arise under" Title 11, "arise in" bankruptcy
case, or "relate to" bankruptcy case. Porter v NationsCredit Consumer Disc. Co. (In re Porter) (2003, BC ED Pa) 295
BR 529.
Unpublished Opinions
Unpublished: Patent holder's suit against United States Patent and Trademark Office and Food and Drug Administration, alleging unlawful conspiracies in violation of Racketeer Influenced and Corrupt Organizations Act (RICO), 18
USCS § 1961 et seq., was properly dismissed because RICO claim could not be brought against either agency as (1)
existence of racketeering activity was prerequisite to civil RICO action, (2) such activity had to be "indictable" under
state and federal criminal laws, and (3) federal agencies were not subject to state or federal criminal prosecution. Pieczenik v Domantis (2005, CA FC) 120 Fed Appx 317, reh den, reh, en banc, den (2005, CA FC) 125 Fed Appx 283 and
cert den (2005, US) 126 S Ct 382, 163 L Ed 2d 168.
Unpublished: In case in which in forma pauperis individual failed to allege any facts so much as suggesting that
any appellee, which included judges, prosecutors, and probation officer, committed one of criminal violations listed in
18 USCS § 1961(1), district court properly concluded that her RICO Act claims were frivolous; district court's 28 USCS
§ 1915(e)(2) dismissal of those claims was affirmed. Smith v Hildebrand (2007, CA11 Ga) 2007 US App LEXIS 15867.
12. "Involving"
Word "involving" in 18 USCS § 1961(1)(A) is broad enough to reach conduct of owners and employees of corrupt
enterprise. United States v Forsythe (1977, CA3 Pa) 560 F2d 1127.
Phrase, "any offense involving," in 18 USCS § 1961 is broad enough to include conspiracy to commit offenses
enumerated in § 1961, and "aiding and abetting" such offenses, including securities fraud, as predicate acts of racketeering. First Federal Sav. & Loan Asso. v Oppenheim, Appel, Dixon & Co. (1986, SD NY) 629 F Supp 427, CCH Fed
Secur L Rep P 92505.
13. Relationship to State offenses
18 USCS §§ 1961 et seq. of Federal Racketeering Act forbids "racketeering," not state offenses per se; state offenses referred to in federal act are definitional only; racketeering, which is federal crime, is defined as matter of legislative
draftsmanship by reference to state law crimes but this does not mean that federal statute punishes same conduct as
reached by state law. United States v Frumento (1977, CA3 Pa) 563 F2d 1083, cert den (1978) 434 US 1072, 55 L Ed
2d 775, 98 S Ct 1256 and cert den (1978) 434 US 1072, 55 L Ed 2d 776, 98 S Ct 1258.
Essential element of racketeering activity, defined in 18 USCS § 1961(1)(A), is proof that defendant violated state
law involving bribery punishable by imprisonment for more than 1 year. United States v Burnsed (1977, CA4 SC) 566
F2d 882, cert den (1978) 434 US 1077, 55 L Ed 2d 784, 98 S Ct 1270.
There is no authority in Title III of Omnibus Crime Control Act for pretrial or compelled testimonial disclosure of
sealed electronic surveillance evidence to private civil RICO litigant. In re Motion to Unseal Elec. Surveillance Evidence (1993, CA8 Mo) 990 F2d 1015.
Where state law imposed different penalties for different degrees of murder and alleged RICO predicate act included two subparts: generic conspiracy to commit murder (Act 20A) and premeditated murder (Act 20B), jury instructions did not call on jurors to determine whether Act 20A or Act 20B (or both) had been committed, and special verdict
referred to Act 20 as unit; however, several witnesses testified in detail about murder and defendant's role in its planning, defendant did not dispute evidence that execution was carefully planned, but instead denied that he took part in
that planning; jury considered, and rejected that argument beyond reasonable doubt when it found that defendant was
responsible for Act 20, so important finding was made by jury, on right standard, and no injustice was done as error was
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18 USCS § 1961
wholly formal. United States v Warneke (2002, CA7 Wis) 310 F3d 542, amd, reh den, reh, en banc, den (2003, CA7
Wis) 2003 US App LEXIS 354 and cert den (2003) 538 US 1048, 155 L Ed 2d 1088, 123 S Ct 2111 and cert den (2003)
538 US 1035, 155 L Ed 2d 1065, 123 S Ct 2097 and cert den (2003) 538 US 1035, 155 L Ed 2d 1065, 123 S Ct 2107 and
cert den (2003) 538 US 1035, 155 L Ed 2d 1065, 123 S Ct 2107 and cert den (2003) 538 US 1049, 155 L Ed 2d 1091,
123 S Ct 2115.
Offense which, when committed, would have been indictable under state law is within statutory designation of
"racketeering activity" under 18 USCS § 1961(1). United States v Fineman (1977, ED Pa) 434 F Supp 189.
Court rejected argument of defendants, corporation and others, that all of plaintiffs' predicate acts failed because
they were not "chargeable" under state law because Racketeer Influenced and Corrupt Organization Act (RICO) statute,
18 USCS § 1961(1), defined "racketeering activity" as any act or threat involving murder, kidnapping, gambling, etc.,
which was chargeable under State law and punishable by imprisonment for more than one year; plaintiffs' RICO claim
was based on predicate acts of murder, arson, and extortion, as defined by California Penal Code; fact that acts occurred
in Nigeria and could not have been prosecuted in California based on Cal. Penal Code § 27 was of no consequence;
RICO statute only required that act be criminal under state law. Bowoto v Chevron Corp. (2007, ND Cal) 481 F Supp 2d
1010.
2.Pattern of Racketeering Activity
a.In General 14. Generally
Phrase "pattern of racketeering activity" as defined at 18 USCS 1961(5) means series of criminal acts as defined by
RICO statute, and such pattern is proved by evidence of requisite number of acts of racketeering committed by participants in enterprise and proof that pattern of racketeering activity exists does not necessarily prove that "enterprise" exists. United States v Williams (1987, CA5 Tex) 809 F2d 1072, 22 Fed Rules Evid Serv 485, reh den (1987, CA5 Tex)
817 F2d 1136 and reh gr, corrected (1987, CA5 Tex) 828 F2d 1 and cert den (1987) 484 US 896, 98 L Ed 2d 187, 108 S
Ct 228 and cert den (1987) 484 US 913, 98 L Ed 2d 216, 108 S Ct 259 and cert den (1987) 484 US 987, 98 L Ed 2d 504,
108 S Ct 506.
In order to constitute pattern of racketeering activity under RICO, predicate acts must be related and must be part of
continuous criminal endeavor; since pattern requirement is matter of criminal dimension and degree, neither number of
predicate acts, nor existence of more than single continuing scheme, is alone appropriate litmus test. International
Data Bank v Zepkin (1987, CA4 Va) 812 F2d 149, CCH Fed Secur L Rep P 93160.
Heightened civil and criminal penalties of RICO (18 USCS §§ 1961 et seq.) are reserved for schemes whose scope
and persistence set them above routine, and pattern of racketeering activity under 18 USCS § 1961(5) is not shown by
scheme which does not rise above routine and does not resemble extended, widespread, or particularly dangerous pattern of racketeering activity. Flip Mortgage Corp. v McElhone (1988, CA4 Va) 841 F2d 531.
Relevant factors for determining existence of "continuity plus relationship" necessary to establish RICO pattern include number and variety of predicate acts and length of time over which they were committed, number of victims,
presence of separate schemes, and occurrence of distinct injuries. Jones v Lampe (1988, CA7 Ill) 845 F2d 755.
Factors relevant to determination of whether RICO "pattern of racketeering activity" has been established include
number and variety of predicate acts, length of time over which they were committed, number of victims, presence of
separate schemes, and occurrence of distinct injuries. SK Hand Tool Corp. v Dresser Industries, Inc. (1988, CA7 Ill)
852 F2d 936, reh den, en banc (1989, CA7) 1989 US App LEXIS 7923 and cert den (1989) 492 US 918, 106 L Ed 2d
589, 109 S Ct 3241.
Factors relevant to establishing existence of RICO pattern include number and variety of predicate acts and length
of time over which they were committed, number of putative victims, presence of separate schemes, and potential for
multiple distinct injuries; however, pattern inquiry remains flexible one whose ultimate focus must always be on whether related predicate acts indicate ongoing criminal activity of sufficient scope and persistence to pose special threat to
social well-being. Brandenburg v Seidel (1988, CA4 Md) 859 F2d 1179 (criticized in System Mgmt., Inc. v Loiselle
(2000, DC Mass) 91 F Supp 2d 401, RICO Bus Disp Guide (CCH) P 9859) and (criticized in System Mgmt., Inc. v
Loiselle (2000, DC Mass) 112 F Supp 2d 112).
Scope of "pattern" requirement is not so unclear that person of ordinary intelligence would not have adequate notice
that his actions constituted pattern of racketeering activity where activity in question consisted of myriad of fraudulent
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acts spanning more than 6 years and involving more than 500 victims. Abell v Potomac Ins. Co. (1991, CA5 La) 946
F2d 1160, reh den (1991, CA5) 1991 US App LEXIS 29557 and cert den (1992) 504 US 911, 118 L Ed 2d 549, 112 S Ct
1944.
Court may define "pattern" according to relevant context and explain what lies beyond word's conceptual scope,
rather than provide alternative verbal formulation of what lies within. Apparel Art Int'l v Jacobson (1992, CA1 Puerto
Rico) 967 F2d 720, RICO Bus Disp Guide (CCH) P 8036, subsequent app, remanded sub nom Apparel Art Int'l v
Amertex Enters. (1995, CA1 Puerto Rico) 48 F3d 576.
Plaintiffs have not alleged "pattern of racketeering activity" where, at best, they have alleged single scheme directed at single victim, resulting in single injury, involving similar acts, and all occurring in period of less than one year.
Wade v Hopper (1993, CA7 Ind) 993 F2d 1246, 25 FR Serv 3d 1278, cert den (1993) 510 US 868, 126 L Ed 2d 151, 114
S Ct 193.
"Pattern of racketeering" requirement under Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS
§ 1961 et seq., was not satisfied because although owner's business procedures documented clear pattern of fraudulent
activity, those efforts were all addressed to one contract and did not comprise or threaten kind of continuous activity at
which RICO statute was aimed; therefore, district court's award of damages and attorney's fees against owner under
RICO was reversed and case was remanded for dismissal of complaint. Sys. Mgmt. v Loiselle (2002, CA1 Mass) 303
F3d 100, 8 BNA WH Cas 2d 161, RICO Bus Disp Guide (CCH) P 10331.
District court possessed personal jurisdiction over appellant, who had organized several credit scams to defraud
computer equipment suppliers, and appellee had established "pattern of racketeering activity" necessary to prevail on its
civil Racketeer Influenced and Corrupt Organizations claim. ePlus Tech., Inc. v Aboud (2002, CA4 Va) 313 F3d 166,
RICO Bus Disp Guide (CCH) P 10378, 60 Fed Rules Evid Serv 221.
Use of standing orders, issued under Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961
et seq., to compel plaintiffs to produce detailed RICO case statements, which are then treated by district court as part of
that party's pleadings, can in certain circumstances require far more information from plaintiffs than is required under
either Fed. R. Civ. P. 8(a) or Fed. R. Civ. P. 9(b); to extent order calls for presentation of information going beyond
what plaintiff needs to present to establish legally sufficient case, plaintiff's inability to produce it cannot justify grant of
judgment to defendant. Wagh v Metris Direct, Inc. (2003, CA9 Cal) 363 F3d 821, 2003 CDOS 9693, amd (2003, CA9
Cal) 348 F3d 1102, 57 FR Serv 3d 328, amd, reh den (2003, CA9) 352 F3d 1187, cert den (2004) 541 US 1043, 158 L
Ed 2d 733, 124 S Ct 2176.
Word "pattern" includes requirement that racketeering acts be connected with each other by some common scheme,
plan, or motive so as to constitute pattern; entire statutory scheme indicates that where acts are isolated and unrelated,
they did not add up to kind of activity Congress meant to describe when it used word "pattern". United States v Stofsky
(1973, SD NY) 409 F Supp 609.
Requirement that there be pattern of racketeering activity signifies common scheme, plan or motive, and not simply
series of disconnected acts United States v Gibson (1980, SD Ohio) 486 F Supp 1230.
Pattern of racketeering activity requires at least 2 acts of racketeering activity, and word "pattern" includes requirement that racketeering acts be connected with each other by some common scheme, plan, or motive so as to constitute pattern and not simply series of disconnected acts. Berg v First American Bankshares, Inc. (1984, DC Dist Col)
599 F Supp 500, CCH Fed Secur L Rep P 91826, affd (1986, App DC) 254 US App DC 198, 796 F2d 489, CCH Fed
Secur L Rep P 92833.
Pattern of racketeering is distinct element of RICO claim which must be proven, and is not synonymous with "enterprise," which must also be proven. Ross v Omnibusch, Inc. (1984, WD Mich) 607 F Supp 835.
Repetition of act taken against single victim which follows closely on heels of original wrong shows no ongoing
design for RICO purposes. Satellite Financial Planning Corp. v First Nat'l Bank (1986, DC Del) 646 F Supp 118.
Factors for determining if pattern of criminal activity constitutes "closed period of repeated conduct" under 18
USCS § 1961 include: number of unlawful acts, length of time over which acts were committed, similarity of acts,
number of victims, number of perpetrators, and character of unlawful activity. Zandford v NASD (1998, DC Dist Col)
19 F Supp 2d 4, 42 FR Serv 3d 301.
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Tax judge's motion to dismiss plaintiff's action against him for damages was granted because judge was entitled to
judicial immunity when approval of determination of tax deficiency was judicial act that was subject to immunity and
he had jurisdiction to determine federal tax consequences of transactions around alleged trust; furthermore, court would
not allow plaintiff to proceed with Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961 et
seq., claim against federal judge without something more than conclusory allegations of participation in, or conspiracy
with respect to, actionable racketeering activity. Chisum v Beghe (2003, DC Dist Col) 2003-2 USTC P 50577, 92 AFTR
2d 5370.
Plaintiffs were denied leave to amend Racketeer Influenced and Corrupt Organizations Act claims, because they
failed to indicate (1) which loans contained fraudulent statements, (2) extent to which each of individual lender defendants participated, and (3) character of lender defendants' involvement in each fraud. Wilson v Toussie (2003, ED NY)
260 F Supp 2d 530, 55 FR Serv 3d 969, 50 UCCRS2d 838.
Shareholder claimed corporate director perjured himself by misrepresenting to court in related salvage action that
corporation would not sell artifacts when, in fact, he intended to sell artifacts, that allegedly false statements made in
court were intended to obstruct or actually did obstruct justice by attempting to influence due administration of justice,
that "false" periodic reports were filed with court and that defendants failed to file required information with Securities
Exchange Commission; accordingly, shareholder sufficiently alleged predicate acts of obstruction of justice under
Racketeering Influenced and Corrupt Organizations Act. D'Addario v Geller (2003, ED Va) 264 F Supp 2d 367, subsequent app, remanded (2005, CA4 Va) 2005 US App LEXIS 3233.
In Racketeer Influenced and Corrupt Organizations Act (RICO) case brought by employers against local union and
its trustees, collateral estoppel--arising from finding in another case that employers were delinquent on fund contributions--precluded claims of mail and wire fraud, 18 USCS §§ 1341, 1343, and illegal payments to union or fund, 29
USCS § 186, regarding attempts to collect contributions; summary judgment was also proper as to extortion claims under N.Y. Penal Law § 155.05(2)(e) and Hobbs Act, 18 USCS § 1951, because such claims could not be based on strike
violence or filing of lawsuits, but alleged violence against employees outside context of strike could constitute predicate
acts of racketeering in RICO action under 18 USCS § 1962(c) and could form pattern of racketeering activity within
meaning of 18 USCS § 1961(5). Andrea Doreen Ltd. v Bldg. Material Local Union 282 (2004, ED NY) 299 F Supp 2d
129.
Songwriter who alleged that 45 defendants, including recording companies and artists, conspired to steal copyrighted songs he had submitted for voluntary critique failed to adequately allege civil claims under 18 USCS § 1961(4)
because he did not state particularized facts under Fed. R. Civ. P. 9(b) to support his allegations of pattern of fraud.
Prunte v Universal Music Group (2007, DC Dist Col) 484 F Supp 2d 32.
Employee's claim against his employer for failing to honor his contention that he was entitled to have no withholding from his pay did not state claim under Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS §
1961 et seq., because employee failed to allege facts that would show pattern of racketeering or enterprise; to extent that
employee relied on mail fraud as predicate offense, he failed to comply with pleading requirements of Fed. R. Civ. P.
9(b). Giles v Volvo Trucks N. Am. (2008, MD Pa) 551 F Supp 2d 359, 2008-1 USTC P 50272, 101 AFTR 2d 1512.
Employee's claims against Internal Revenue agent were sue sponte dismissed by court because, as to claim alleging
violations of Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq., employee failed to
sufficiently plead any of elements. Giles v Volvo Trucks N. Am. (2008, MD Pa) 551 F Supp 2d 359, 2008-1 USTC P
50272, 101 AFTR 2d 1512.
Unpublished Opinions
Unpublished: District court did not abuse its discretion when it denied individual's motion to file case statement
under Racketeer Influenced and Corrupt Organization Act (RICO), 18 USCS § 1961 et seq., and denied her motion to
amend where individual's complaint more than adequately set forth her alleged RICO claim, and individual failed to
supply draft of proposed amendments with her motion to amend. Yuhasz v Poritz (2006, CA3 NJ) 2006 US App LEXIS
3643.
Unpublished: Court of appeals affirmed district court's judgment dismissing property owner's claim that government officials violated RICO when they demolished property he owned, removed electric meter from mobile home he
owned, and refused to issue building permit he requested because owner's complaint failed to allege that officials committed predicate acts that constituted pattern of racketeering activity; however, court of appeals found that owner stated
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valid claim that officials violated his right to due process of law under U.S. Constitution when they demolished his
property without giving him notice of that action or opportunity to contest it before it occurred, and it reversed district
court's judgment dismissing that claim. Abele v Tolbert (2006, CA11 Fla) 2006 US App LEXIS 7755.
15. Number of predicate acts
Pattern of racketeering activity, within meaning of RICO Act, is not established merely by proving two predicate
acts; 18 USCS § 1961(5) implies that while two acts are necessary, they may not be sufficient. H. J., Inc. v Northwestern Bell Tel. Co. (1989) 492 US 229, 106 L Ed 2d 195, 109 S Ct 2893.
"Pattern of racketeering" within meaning of 18 USCS § 1961 may consist of 2 acts of racketeering activity. United
States v Aleman (1979, CA7 Ill) 609 F2d 298, cert den (1980) 445 US 946, 63 L Ed 2d 780, 100 S Ct 1345.
Pattern of racketeering activity under 18 USCS § 1961 requires at least two acts of racketeering activity, which
must have occurred within at least 10 years of each other, but statute does not require predicate acts relied on as pattern
of racketeering activity to be charged as separate counts against defendant. United States v Jennings (1988, CA6 Ohio)
842 F2d 159.
Single, isolated transaction does not satisfy RICO requirement of "pattern" of racketeering activity. Secon Service
System, Inc. v St. Joseph Bank & Trust Co. (1988, CA7 Ind) 855 F2d 406.
Plaintiff must prove at least two separate schemes to demonstrate "pattern" of racketeering activity under RICO (18
USCS §§ 1961 et seq.). Phenix Fed. S&L Ass'n, F.A. v Shearson Loeb Rhoades, Inc. (1988, CA8 Iowa) 856 F2d 1125,
12 FR Serv 3d 692, cert den (1989) 489 US 1066, 103 L Ed 2d 810, 109 S Ct 1340.
RICO verdict can be sustained when pattern of racketeering acts existed, but when only one act caused injury;
merely because one of racketeering acts was not successful does not mean that it is unavailable to establish pattern.
Deppe v Tripp (1988, CA7 Ill) 863 F2d 1356, CCH Fed Secur L Rep P 94142, 27 Fed Rules Evid Serv 307 (criticized in
Bird v Glacier Elec. Coop., Inc. (2001, CA9 Mont) 255 F3d 1136, 2001 CDOS 5769, 2001 Daily Journal DAR 7101).
RICO conviction, which requires two separate predicate acts, cannot be based on single act of using telephone to
promote bribery and extortion, even though act encompassed two criminal offenses. United States v Walgren (1989,
CA9 Wash) 885 F2d 1417.
Simply because jury found specified racketeering act as unproven beyond reasonable doubt did not mean that jury
found evidence relating to that act unpersuasive, in combination with other evidence in case, on existence of association-in-fact enterprise, but, rather, it could mean only that government did not prove requisite element of underlying
crime alleged as racketeering act. United States v Connolly (2003, CA1 Mass) 341 F3d 16, 62 Fed Rules Evid Serv 474.
Proof of "pattern of racketeering activity", defined by § 1961(5), requires showing of at least two separate instances
of racketeering activity. United States v Frumento (1976, ED Pa) 409 F Supp 136, affd (1977, CA3 Pa) 563 F2d 1083,
cert den (1978) 434 US 1072, 55 L Ed 2d 775, 98 S Ct 1256 and cert den (1978) 434 US 1072, 55 L Ed 2d 776, 98 S Ct
1258.
"Pattern of racketeering activity" requires at least two acts of racketeering activity within 10 years of each other,
one of which must have occurred after effective date of 18 USCS § 1961. United States v Field (1977, SD NY) 432 F
Supp 55, affd without op (1978, CA2 NY) 578 F2d 1371, cert dismd (1978) 439 US 801, 58 L Ed 2d 94, 99 S Ct 43.
Under 18 USCS § 1961 there must be at least 2 acts of racketeering activity, occurring within 10 years of each other, in order for there to be pattern of such activity. Vietnamese Fishermen's Asso. v Knights of Ku Klux Klan (1981, SD
Tex) 518 F Supp 993, 1981-2 CCH Trade Cases P 64260.
Allegations of racketeering activity arising out of 2 discrete transactions fall far short of establishing pattern of
racketeering activity required to state civil RICO claim. Rojas v First Bank Nat'l Asso. (1985, ED NY) 613 F Supp 968.
Pattern of racketeering activity is properly alleged under 18 USCS § 1961(5), where complaint alleges at least 2
separate and distinct transactions resulting in independent injuries, notwithstanding that both transactions arose out of
parties' common interest in particular business project. Landon v GTE Communications Services, Inc. (1988, ND Ill)
696 F Supp 1213.
Civil racketeering claim is not stated under 18 USCS § 1961, where complaint alleges that chemical manufacturer
stole secret formula from competitor, copied product, and then marketed product, because wrong against formula owner
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18 USCS § 1961
was complete when formula was copied and thus sales of product do not constitute "pattern of racketeering activity."
R.E. Davis Chem. Corp. v Nalco Chem. Co. (1990, ND Ill) 757 F Supp 1499, dismd (1991, ND Ill) 1991 US Dist LEXIS
14199.
Employer who filed RICO action against building trades council and its individual members failed to show pattern
of continuous and related activity, where complaint alleged only two picketing incidents that occurred four years apart
at two separate locations, and each incident took place during one day. Esposito Hauling & Contracting Co. v Building
& Constr. Trades Council (1993, DC Del) 144 BNA LRRM 2991.
Civil RICO claims of discharged prison employees are dismissed, even though they describe one potential offense
of failure to produce exculpatory evidence pursuant to alleged court order, because they do not describe 2 offenses and,
consequently, do not satisfy requirement of 18 USCS § 1961(5). Nickerson v Texas (1998, ED Tex) 35 F Supp 2d 512,
affd without op (2000, CA5 Tex) 209 F3d 718, cert den (2000) 531 US 814, 148 L Ed 2d 17, 121 S Ct 48.
Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq., claim failed because corporation had raised only one predicate act, which was insufficient as matter of law for RICO claim. Triple Five of Minn.,
Inc. v Simon (2002, DC Minn) RICO Bus Disp Guide (CCH) P 10368, injunction gr (2003, DC Minn) 280 F Supp 2d
895, amd, motion gr, in part, motion den, in part (2003, DC Minn) 2003 US Dist LEXIS 22737 and affd in part and revd
in part, remanded (2005, CA8 Minn) 404 F3d 1088.
Where state employee did not allege more than one predicate act as required by 18 USCS § 1651(5), state employee's Racketeer Influenced and Corrupt Organizations claim against internet provider arising from provider's employees
setting up fake e-mail account and sending offensive e-mail ostensibly from state employee's personal e-mail account
was not properly pleaded. Booker v GTE.net LLC (2002, ED Ky) 214 F Supp 2d 746, affd (2003, CA6 Ky) 350 F3d
515, 20 BNA IER Cas 1273, 149 CCH LC P 59835, 2003 FED App 427P.
Shareholder alleged that corporate officers and directors engaged in pattern of racketeering conduct in alleged looting scheme, and other practices, including more than two predicate acts of mail fraud, consisting of payments to insiders, and at least one predicate act of obstruction of justice committed by one individual defendant in allegedly making
false statements to instant court in related salvage action; shareholder also alleged that corporation and its shareholders
were injured by Racketeering Influenced and Corrupt Organizations Act (RICO) violation because mail fraud was being
used to loot company and misrepresentation to court thwarted court's administration of salvor rights and its ability to act
as guardian to ensure artifacts would be properly handled; accordingly, RICO claim was close enough to what was required that it could not be said to be "wholly insubstantial and immaterial," and it was at least arguable and nonfrivolous, even if shareholder ultimately could not prevail on merits; thus corporate officers and directors could not defeat
service of process under RICO's nationwide service of process provisions. D'Addario v Geller (2003, ED Va) 264 F
Supp 2d 367, subsequent app, remanded (2005, CA4 Va) 2005 US App LEXIS 3233.
Plaintiff's RICO claim had to be dismissed under Fed. R. Civ. P. 12(b)(6) because plaintiff had not properly alleged
two or more predicate acts; multiple acts in furtherance of single extortion episode constituted only single predicate act
of attempted extortion, not pattern of two or more predicate acts. Dtex, LLC v BBVA Bancomer, S.A. (2005, DC SC) 405
F Supp 2d 639.
District court concluded that, at least at early stage in litigation, allegations of investor's complaint, read only with
respect to one purchase of allegedly fraudulent annuity, were sufficient to meet "pattern" requirement under Racketeer
Influenced and Corrupt Organizations Act, 18 USCS § 1961 et seq. Bendzak v Midland Nat'l Life Ins. Co. (2006, SD
Iowa) 440 F Supp 2d 970.
Subcontractor was not entitled to recover on her RICO claim as matter of law because, although she alleged standing under 18 USCS § 1964, she failed to allege pattern of racketeering activity under 18 USCS §§ 1961, 1962 and did
not meet her burden to show that city, its employee, and contractor committed mail fraud or that they conspired to
commit mail fraud under 18 USCS §§ 1341, 371. Trugreen Landcare, L.L.C v Scott (2007, ND Tex) 512 F Supp 2d 613.
16. Number of schemes, goals, or episodes
Although proof that defendant has been involved in multiple criminal schemes is relevant to whether he has engaged in continuing criminal conduct, so as to establish pattern of racketeering activity, it is not only by proof of multiple schemes that such continuity of activity may be shown. H. J., Inc. v Northwestern Bell Tel. Co. (1989) 492 US 229,
106 L Ed 2d 195, 109 S Ct 2893.
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18 USCS § 1961
It is not necessary to demonstrate more than one fraudulent scheme or criminal episode in order to establish continuity of acts for purposes of RICO's pattern requirement; rather, continuity exists if predicate acts are not isolated or
sporadic, but continuous. Sun Sav. & Loan Ass'n v Dierdorff (1987, CA9 Cal) 825 F2d 187, 8 FR Serv 3d 808.
Allegations of multiple "criminal episodes or fraudulent schemes" are not necessary to establish "pattern of racketeering activity" under 18 USCS § 1961; rather, plaintiffs need only allege two or more related RICO predicate acts occurring over significant period of time, evidencing threat of continuing activity. United Energy Owners Committee,
Inc. v United States Energy Management Systems, Inc. (1988, CA9 Cal) 837 F2d 356, 10 FR Serv 3d 253.
There is no need to allege more than one scheme or that scheme is ongoing or open-ended to meet "continuity plus
relationship" requirement for establishing pattern under 18 USCS § 1961; rather, determination of whether requirement
is met turns on combination of factors, including number of unlawful acts, length of time over which acts were committed, similarity of acts, number of victims, number of perpetrators, and character of unlawful activity; thus, if proven,
multiple fraudulent inducements to retire made to at least 32 individuals over extended period satisfy "continuity plus
relationship" requirement. Saporito v Combustion Eng'g (1988, CA3 NJ) 843 F2d 666, 9 EBC 2623, vacated, remanded (1989) 489 US 1049, 103 L Ed 2d 576, 109 S Ct 1306, 10 EBC 2000.
Separate racketeering acts must reflect both "continuity" and "relatedness" to constitute pattern of racketeering activity under RICO (18 USCS §§ 1961 et seq.), and continuity requirement is not met where defendants' acts constitute
single scheme to defraud single victim in "one-shot" effort to inflict single injury. Medical Emergency Service Associates, S.C. v Foulke (1988, CA7 Ill) 844 F2d 391, 10 FR Serv 3d 1239.
Predicate acts may constitute pattern of activity under RICO (18 USCS §§ 1961 et seq.) even though only single
scheme is involved. United States v Kirk (1988, CA9 Hawaii) 844 F2d 660, 25 Fed Rules Evid Serv 683, cert den
(1988) 488 US 890, 102 L Ed 2d 213, 109 S Ct 222.
To establish RICO pattern, plaintiff must demonstrate threat of continuing activity, and scheme to achieve single
discrete objective does not in and of itself create threat of ongoing activity, even when that goal is pursued by multiple
illegal acts, because scheme ends when purpose is accomplished. Pitts v Turner & Boisseau, Chartered (1988, CA10
Kan) 850 F2d 650, cert den (1989) 488 US 1030, 102 L Ed 2d 970, 109 S Ct 838.
RICO pattern may be established without proof of multiple schemes, multiple episodes, or multiple transactions.
United States v Indelicato (1989, CA2) 865 F2d 1370.
Where all alleged predicate acts took place as part of single law suit, and law suit has ended, conduct did not constitute or threaten long-term criminal activity and therefore does not constitute RICO "pattern". In re Burzynski (1993,
CA5 Tex) 989 F2d 733, RICO Bus Disp Guide (CCH) P 8297.
Indictment charging that defendant participated in enterprise of crime family and that defendant murdered member
of same enterprise did not render indictment "schizophrenic", thereby failing to establish enterprise on which offense
was based. United States v Knox (1994, CA3 Pa) 32 F3d 733, cert den (1995) 513 US 1109, 130 L Ed 2d 782, 115 S Ct
897.
Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1961 et seq., is not aimed at single narrow criminal episode, even if that single episode involves behavior that amounts to several crimes. Sys. Mgmt. v Loiselle (2002,
CA1 Mass) 303 F3d 100, 8 BNA WH Cas 2d 161, RICO Bus Disp Guide (CCH) P 10331.
Each act of criminal activity is counted as act of racketeering activity, even if numerous acts arise out of same episode. Harper v New Japan Sec. International, Inc. (1982, CD Cal) 545 F Supp 1002, CCH Fed Secur L Rep P 98856.
There is no pattern of racketeering activity under 18 USCS § 1961 where there is only one purpose, one result, one
set of participants, one victim, and one method of commission, since there is no continuity. Torwest DBC, Inc. v Dick
(1986, DC Colo) 628 F Supp 163, CCH Fed Secur L Rep P 92524, affd (1987, CA10 Colo) 810 F2d 925, CCH Fed
Secur L Rep P 93106.
Concept of "pattern" under civil RICO (18 USCS § 1964) cases contemplates multiple transactions or episodes, not
just multiple acts to promote same transaction or episode, since, without such interrelated transactions or episodes, there
would be no "continuity and relationship" which is what distinguishes RICO from predicate acts. Grant v Union Bank
(1986, DC Utah) 629 F Supp 570.
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For purposes of 18 USCS § 1964, alleged acts of mail fraud constituted "pattern of racketeering activity" under 18
USCS § 1961 even though there was only one scheme to defraud. Bush Dev. Corp. v Harbour Place Associates (1986,
ED Va) 632 F Supp 1359.
Where predicate acts for pattern are sufficiently different and ongoing, RICO violation can exist with only one
scheme. Hill v Equitable Bank (1987, DC Del) 655 F Supp 631, CCH Fed Secur L Rep P 93229, affd (1988, CA3 Del)
851 F2d 691, CCH Fed Secur L Rep P 93919, cert den (1989) 488 US 1008, 102 L Ed 2d 782, 109 S Ct 791.
Single scheme may satisfy continuity requirement of "pattern of racketeering" for RICO count. Tri-Continental
Leasing Corp. v Cicerchia (1987, DC Mass) 664 F Supp 635, 4 UCCRS2d 946.
Pattern requirement is not met in Fourth Circuit by allegations of ordinary business fraud in which single scheme is
perpetrated against single victim. Arnold v Moran (1988, ED Va) 687 F Supp 232, CCH Fed Secur L Rep P 93956.
Civil racketeering claim is not stated under 18 USCS § 1961(5), where complaint alleges that travel agency failed to
report or pay for airline ticket that agency sold, because single scheme is alleged and thus requisite pattern of racketeering activity is not alleged, notwithstanding that alleged scheme covered 13-month period. Airlines Reporting Corp. v
Aero Voyagers, Inc. (1989, SD NY) 721 F Supp 579.
17.--Circumstances of case as determinative
Pattern of racketeering activity under RICO need not involve more than one unlawful scheme; racketeering acts
committed pursuant to single fraudulent scheme can constitute "pattern" regardless of whether scheme is potentially
ongoing or open-ended, since notion of continuity does not compel requirement of open-endedness, and determination
whether unlawful activity is sufficiently extensive to be "continuous" necessarily depends on circumstances of each
particular case. Barticheck v Fidelity Union Bank/First Nat'l State (1987, CA3 NJ) 832 F2d 36 (superseded by statute
as stated in Young v West Coast Indus. Relations Ass'n (1992, DC Del) 144 FRD 206) and (criticized in Leonard A.
Feinberg, Inc. v Central Asia Capital Corp. (1997, ED Pa) 974 F Supp 822, 34 UCCRS2d 112).
Continuity necessary for RICO pattern of racketeering activity does not require showing that defendant engaged in
more than one scheme or criminal episode, but circumstances of case must suggest that predicate acts indicate threat of
continuing activity. Medallion Television Enters. v SelecTV of Cal. (1987, CA9 Cal) 833 F2d 1360, cert den (1989)
492 US 917, 106 L Ed 2d 588, 109 S Ct 3241.
Allegations of illegal conduct constituting single, completed criminal episode are in some circumstances sufficient
to describe pattern of racketeering activity under RICO, and in determining whether "pattern" exists, court should consider combination of specific factors such as number of unlawful acts, length of time over which acts were committed,
similarity of acts, number of victims, number of perpetrators, and character of unlawful activity; furthermore, allegation
that predicate acts of mail and wire fraud, bribery, and violation of Foreign Corrupt Practices Act were committed in
connection with, or to facilitate, payments by defendant to foreign corporations, satisfies RICO pattern requirement,
although one could view payments as single illegal payment separated into installments, and thus a one-time affair.
Environmental Tectonics v W.S. Kirkpatrick, Inc. (1988, CA3 NJ) 847 F2d 1052, 1988-1 CCH Trade Cases P 67994, 25
Fed Rules Evid Serv 1021, affd (1990) 493 US 400, 107 L Ed 2d 816, 110 S Ct 701, 1990-1 CCH Trade Cases P 68894.
Single illegal scheme can constitute "pattern of racketeering activity" under RICO, so long as racketeering acts
meet "continuity plus relationship" requirement, and factors which can be considered in determining whether pattern
existed include number of unlawful acts, length of time over which acts were committed, similarity of acts, number of
victims, number of perpetrators, and character of unlawful activity. United States v Zauber (1988, CA3 NJ) 857 F2d
137, cert den (1989) 489 US 1066, 103 L Ed 2d 810, 109 S Ct 1340 and (superseded by statute as stated in United States
v Little (1989, CA5 Miss) 889 F2d 1367) and (superseded by statute as stated in United States v Shyres (1990, CA8 Mo)
898 F2d 647).
Although individuals committed multiple acts justifying civil verdicts against them, all of these efforts were directed toward one transaction, and therefore, did not comprise or threaten kind of continued criminal activity at which
Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1961 et seq., statute was aimed; therefore, there was
insufficient evidence for jury to find that individuals posed continuing threat of criminal activity. Kenda Corp. v Pot
O'Gold Money Leagues, Inc. (2003, CA1 Mass) 329 F3d 216, 55 FR Serv 3d 713.
District court granted defendants' motion to dismiss plaintiffs' complaint without prejudice as to plaintiffs' claim
that defendants violated 18 USCS § 1951, as plaintiffs' claims that defendants acts interfered with interstate commerce
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18 USCS § 1961
did not stand because plaintiffs did not allege that any of victims regularly engaged in interstate commerce. Calabrese v
CSC Holdings, Inc. (2003, ED NY) 283 F Supp 2d 797.
18. Preparatory acts
Acts preparatory to accomplishment of discrete offense do not form pattern of racketeering activity under 18 USCS
1961. Montesano v Seafirst Commercial Corp. (1987, CA5 La) 818 F2d 423.
Series of robberies formed pattern of criminal activity, for purposes of 18 USCS § 1961(5), where robberies sometimes were preceded by stealing weapon for use in crime, part of group would enter premises while others would remain
behind, and threats of harm were made to victims, some of whom were shot. United States v Cooper (2000, DC Dist
Col) 91 F Supp 2d 60, motions ruled upon (2000, DC Dist Col) 91 F Supp 2d 79, motion to strike den, motion den, motion gr, in part (2000, DC Dist Col) 91 F Supp 2d 90.
19. Duration and continuity
Although proof that defendant has been involved in multiple criminal schemes is relevant to inquiry whether defendant has engaged in continuing criminal conduct, so as to establish pattern of racketeering activity within meaning of
RICO Act, it is not only by proof of multiple schemes that such continuity of activity may be shown. H. J., Inc. v
Northwestern Bell Tel. Co. (1989) 492 US 229, 106 L Ed 2d 195, 109 S Ct 2893.
Predicate acts, to be sufficiently continuous to constitute pattern of racketeering activity, must be ongoing over
identified period of time so that they can be fairly viewed as constituting separate transactions, considering number and
variety of predicate acts, length of time over which they were committed, number of victims, presence of separate
schemes, occurrence of distinct injuries, and other relevant factors, and even predicate acts relating to same overall
scheme or involving same victim may satisfy pattern requirement. Morgan v Bank of Waukegan (1986, CA7 Ill) 804
F2d 970.
"Continuity" element of RICO pattern of racketeering activity does not require that there be finding of some continuing threat of racketeering activity after completion of scheme; continuity requirement was not intended to force
court to guess likelihood of future criminal conduct or to proscribe liability for completed schemes, but refers instead to
duration of predicate acts. Liquid Air Corp. v Rogers (1987, CA7 Ill) 834 F2d 1297, 24 Fed Rules Evid Serv 254, cert
den (1989) 492 US 917, 106 L Ed 2d 588, 109 S Ct 3241 and (ovrld in part as stated in CIB Bank v Esmail (2004, ND
Ill) 2004 US Dist LEXIS 26817) and (ovrld as stated in Equity Residential v Kendall Risk Mgmt. (2005, ND Ill) 2005 US
Dist LEXIS 8273).
RICO pattern may not be established without some showing that racketeering acts are interrelated and that there is
continuity or threat of continuity. United States v Indelicato (1989, CA2) 865 F2d 1370.
Plaintiff fails to meet continuity requirement needed to establish pattern of racketeering activity where he complains of two allegedly defamatory newspaper articles published on same day, research and gathering of information for
articles did not amount to discrete series of predicate acts extending over substantial period of time, and there is no allegation of threat of future activity. Phelps v Wichita Eagle-Beacon (1989, CA10 Kan) 886 F2d 1262 (criticized in
Bryant v Polston (2000, SD Ind) 2000 US Dist LEXIS 16368).
"Continuity" requirement of RICO offense was not satisfied where defendants set up sham corporation for sole
purpose of paying off loan secured by officer of parent corporation; because this single scheme was designed to be short
lived and had natural ending without threat of continued criminal activity, there was no threat of repetition. Olive Can
Co. v Martin (1990, CA7 Ill) 906 F2d 1147, 17 FR Serv 3d 516 (superseded by statute as stated in Myers v County of
Lake (1994, CA7 Ind) 30 F3d 847).
"Relationship" among predicate acts does not by itself define "pattern" for purpose of RICO; predicate acts themselves must be shown to amount to threat of continuing activity, either as closed period of repeated conduct or past
conduct that projects into future. United States Textiles, Inc. v Anheuser-Busch Cos. (1990, CA7 Ill) 911 F2d 1261,
motion to strike den, claim dismissed (1988, ND Ill) 1988 US Dist LEXIS 19357.
Criminal acts taking place over brief, isolated period between December, 1986, and May, 1987, is insufficient to
constitute "pattern" of activity. American Eagle Credit Corp. v Gaskins (1990, CA6 Mich) 920 F2d 352.
Two predicate acts of accepting gratuity and accepting promise of future loans, occurring over 11 month period,
were not isolated acts and did represent continuity where gratuity threatened to continue for 4-year period as long as
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investment with co-conspirator continued. United States v Bustamante (1995, CA5 Tex) 45 F3d 933, reh, en banc, den
(1995, CA5 Tex) 52 F3d 1069 and cert den (1995) 516 US 973, 133 L Ed 2d 402, 116 S Ct 473.
Plaintiff showed relatedness and continuity, thereby establishing "pattern" of racketeering activity, where activities
of enterprise were undertaken for common purpose of defrauding insureds, activities were in each case accomplished by
common method, and activities were undertaken regularly and were of lengthy duration. United HealthCare Corp. v
American Trade Ins. Co. (1996, CA8 Minn) 88 F3d 563, RICO Bus Disp Guide (CCH) P 9062, 35 FR Serv 3d 269.
Summary judgment was improvidently granted where plaintiff showed threat of continuity in that unlawful acts,
scheme of kickbacks between employee of plaintiff and salesperson for defendant, recurred with regularity over lengthy
period of time and stopped only when discovered. Cosmos Forms v Guardian Life Ins. Co. of Am. (1997, CA2 NY) 113
F3d 308, RICO Bus Disp Guide (CCH) P 9260.
Although RICO pattern need not have countless victims, finite nature of alleged activities, together with their occurrence over relatively modest 21-month period cannot support finding of pattern under "closed" continuity approach
where acts comprise single effort to facilitate single endeavor. Efron v Embassy Suites (P.R.), Inc. (2000, CA1 Puerto
Rico) 223 F3d 12, RICO Bus Disp Guide (CCH) P 9931, cert den (2001) 532 US 905, 149 L Ed 2d 138, 121 S Ct 1228.
In prosecution of former Federal Bureau of Investigations agent under Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq., "pattern of racketeering activity" was shown when it was proved that defendant and others executed incidents that facilitated future crimes. United States v Connolly (2003, CA1 Mass) 341 F3d
16, 62 Fed Rules Evid Serv 474.
Plaintiff in Racketeering Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq., action must
allege either open-ended pattern of racketeering activity, such as past criminal conduct coupled with threat of future
criminal conduct, or closed-ended pattern of racketeering activity, such as past criminal conduct extending over substantial period of time; to satisfy open-ended continuity, plaintiff need not show that predicates extended over substantial period of time but must show that there was threat of continuing criminal activity beyond period during which predicate acts were performed and, in analyzing issue of continuity, even assuming that alleged predicate acts constituting
pattern were adequately pled, court evaluates RICO allegations with respect to each defendant individually. First Capital Asset Mgmt. v Satinwood, Inc. (2004, CA2 NY) 385 F3d 159.
District court properly granted Fed. R. Civ. P. 12(b)(6) motion to dismiss action by individual and his company alleging that financiers conspired to participate and participated, through repeated acts of mail and wire fraud, in illegal
racketeering scheme to defraud plaintiffs' of their valuable property in violation of 18 USCS § 1962(b)-(d) of Racketeer
Influenced and Corrupt Organizations Act, 18 USCS § 1961 et seq.; plaintiffs' complaint failed to meet specificity requirements of Fed. R. Civ. P. 9(b) and did not establish either open-ended or closed-ended continuity for purposes of 18
USCS § 1961(5)'s "pattern" element. Giuliano v Fulton (2005, CA1 Mass) 399 F3d 381.
District court properly dismissed pursuant to Fed. R. Civ. P. 12(b)(6) workers compensation claimant's action
against his employer, insurer, insurance adjuster, and physician for alleged violation of 18 USCS § 1962(c), part of
Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1961 et seq., in alleged collusion to wrongfully terminate workers compensation benefits; complaint failed to establish pattern of racketeering activity because it did not set
forth facts establishing either closed-ended or open-ended continuity. Moon v Harrison Piping Supply (2006, CA6
Mich) 465 F3d 719, 2006 FED App 365P.
"Fortuitous interruption" of racketeering activity, such as by arrest, does not grant defendants free pass to evade
RICO charges; thus, 4 predicate acts spanning 34 days and crime spree lasting 3 months was sufficient evidence of ongoing RICO enterprise where defendants victimized dozens of persons, killed 5, and where seriousness and frequency
were escalating. United States v Richardson (1999, App DC) 334 US App DC 384, 167 F3d 621, cert den (1999) 528 US
895, 145 L Ed 2d 189, 120 S Ct 225.
Civil racketeering claim fails under 18 USCS § 1961 where investors claim only that 3 alleged predicate acts were
committed by financial advisor and acts were not related to each other in common scheme, because pattern of racketeering activity does not exist. Halperin v Jasper (1989, ED Pa) 723 F Supp 1091.
Civil RICO defendants' motion for new trial or judgment notwithstanding verdict is denied, despite allegation that
recent Supreme Court decision provides definition of RICO pattern that plaintiff's proof utterly failed to meet, because
decision did not hold that "continuity" requirement demands that racketeering enterprise be actually in existence at time
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18 USCS § 1961
of trial, and charge to jury was consistent with definition of pattern stated in Supreme Court case. Minpeco, S.A. v
Hunt (1989, SD NY) 724 F Supp 259.
Recent Supreme Court decision did not hold that "continuity" requirement demands that racketeering enterprise be
actually in existence at time of trial, and charge to jury was consistent with definition of pattern stated in Supreme Court
case. Minpeco, S.A. v Hunt (1989, SD NY) 724 F Supp 259.
Civil racketeering claim is not stated under 18 USCS § 1961(5), where complaint alleges fraudulent operation of
employee stock option plan, plan has termination date, and there is no indication that alleged racketeering will continue
beyond termination date, because continuing racketeering activity is not suggested and thus there is no "pattern of racketeering activity." Hood v Smith's Transfer Corp. (1991, WD Ky) 762 F Supp 1274, 13 EBC 2113, 137 BNA LRRM
2199, CCH Fed Secur L Rep P 96136, 120 CCH LC P 11045, RICO Bus Disp Guide (CCH) P 8101 (criticized in
Teamsters Local 372 v Detroit Newspapers (1997, ED Mich) 956 F Supp 753, 155 BNA LRRM 2088).
Civil racketeering claim is not stated under 18 USCS § 1961(5), where complaint alleges scheme that extended over
only few months to force shareholder to sell its minority interest and no future criminal conduct is threatened, because
continuity requirement of "pattern of racketeering activity" is not met. Shields Enters. v First Chicago Corp. (1991,
ND Ill) 762 F Supp 1331, affd in part and revd in part (1992, CA7 Ill) 975 F2d 1290, RICO Bus Disp Guide (CCH) P
8088, reh, en banc, den (1992, CA7) 1992 US App LEXIS 28775 and (criticized in Word of Faith World Outreach Ctr.
Church v Sawyer (1996, CA5 Tex) 90 F3d 118, 24 Media L R 2209, RICO Bus Disp Guide (CCH) P 9093).
False statements and misrepresentations made to Patent and Trademark Office in application for patent for aluminum dump truck body was not pattern of racketeering activity necessary to support civil action under 18 USCS §
1961(1) brought by dump truck's designer against his business partner's attorney, since business entities involved were
only in existence for brief period of time and then filed for bankruptcy. Heden v Hill (1996, SD Tex) 937 F Supp 1230.
Racketeering conspiracy convictions will not be vacated, despite argument that enterprise ceased to exist at time
members entered prison, because government showed that, despite being incarcerated, "Park Avenue Boys" were able
to survive as gang and reemerge to carry on their pattern of crime, and RICO (18 USCS §§ 1961 et seq.) will not be interpreted so as to allow defendants to use their imprisonment to their advantage. United States v Morales (1997, SD NY)
974 F Supp 315, subsequent app (1999, CA2 NY) 185 F3d 74, cert den (2000) 529 US 1010, 146 L Ed 2d 229, 120 S Ct
1282.
Cargo inspection company's alleged thefts during 10-week period, more than 8 months before claim was filed under
18 USCS § 1961(5), did not constitute "pattern of racketeering activity," under theory of open-ended continuity, since
neither nature of conduct nor company's business itself suggested continuing threats of thefts, and there was no external
basis for believing that thefts would continue. Sea-Land Serv., Inc. v Atlantic Pac. Int'l, Inc. (1999, DC Hawaii) 57 F
Supp 2d 1048, 2000 AMC 1586.
Despite its references to open-ended continuity and addition of broad continuity and motive allegations, union's
amended complaint, like its predecessor, failed to allege facts sufficient to meet continuity element of its RICO causes
of action; even assuming union's allegations were sufficient to define association-in-fact-enterprise, its factual allegations were inadequate to support inference that enterprise was ongoing one that would, absent discovery of election-related fraud, have continued to engage in criminal activity as regular way of doing business; therefore federal
claims were dismissed for failure to state claim upon which relief could be granted. Int'l Bhd. of Teamsters v Carey
(2004, SD NY) 297 F Supp 2d 706, 174 BNA LRRM 2189, affd (2005, CA2 NY) 176 BNA LRRM 2832, corrected (2005,
CA2 NY) 124 Fed Appx 41.
All letters allegedly constituting predicate acts of mail fraud were sent on same day and, thus, did not establish pattern extending over "substantial" period of time; even were court to have linked letters back to original "broken promises" fraud that had allegedly occurred some six months earlier, alleged "pattern" fell well short of one-year rule of thumb
for Racketeer Influenced and Corrupt Organizations Act (RICO) "pattern" and, thus, even if reasonable jury could have
found relationship, it could not have found sufficient continuity to establish pattern of predicate acts in support of RICO
claim. Webster Indus. v Northwood Doors, Inc. (2004, ND Iowa) 320 F Supp 2d 821.
Even assuming that victim of alleged sexual abuse was able to identify more than one act of mail fraud to constitute
pattern, victim still would not have alleged sufficient pattern of racketeering activity against priest, diocese, and bishop,
among others, because victim had to plead that at least two or more predicate acts were related and that they amounted
to, or posed threat of continuing criminal activity (the nature of allegations--fraud in negotiating settlement agreement--were not sort that demonstrated inherent threat of future criminal activity) or continued for sufficient duration
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(one year was not of sufficient duration to state closed pattern of activity). Hall v Tressic (2005, ND NY) 381 F Supp 2d
101.
Complaint filed by mortgagor against bank that had foreclosed mortgage and officials of town in which mortgaged
residence was located under RICO Act alleging that defendants had conspired to wrongfully foreclose on home so that
it could be acquired inexpensively was dismissed for lack of jurisdiction and on finding that Colorado River-type abstention was proper in part because single criminal episode or event as pleaded by mortgagor was not "pattern" within
meaning of RICO inasmuch that its parts, when taken together, did not amount to or pose threat of continued criminal
activity within reach of RICO. Mani v United Bank (2007, DC Mass) 498 F Supp 2d 406.
Plaintiffs failed to properly allege "pattern" of racketeering activity with specificity required under Fed. R. Civ. P.
9(b); specifically, they failed to satisfy continuity prong of pattern test where (1) their amended complaint included
nothing more than conclusory, unsupported assertions that defendants were engaged in widespread scheme to defraud
other individuals in same manner that they were allegedly defrauded, (2) they pointed to no specific fraudulent conduct
perpetrated by any defendant apart from that directed towards them from November 15, 2005, to November 30, 2006,
(3) they had not alleged ongoing unlawful activities whose scope and persistence posed special threat to social
well-being; in sum, they had essentially alleged ordinary commercial fraud, which was insufficient to establish claim
under RICO Act. Williams v Equity Holding Corp. (2007, ED Va) 498 F Supp 2d 831, motion gr, count dismd, motion
to strike gr (2007, ED Va) 2007 US Dist LEXIS 69653.
Plaintiff aircraft dealers' Racketeer Influenced and Corrupt Organizations Act claim under 18 USCS §
1962(c)against defendants, its former independent contractor, his company, and escrow agent and its employees, failed
because alleged 8-month time period was insufficient for closed-ended continuity and no factual allegations supported
conclusory allegation that alleged conduct was part of their regular way of doing business. Aeropower, Ltd. v Matherly
(2007, MD Ala) 511 F Supp 2d 1139.
20. Organized crime connection
RICO's concept of "pattern of racketeering activity" is not to be interpreted narrowly to mean that defendant's racketeering activities form pattern only if they are characteristic either of organized crime in traditional sense or of organized-crime-type perpetrator--that is, of association dedicated to repeated commission of criminal offenses. H. J., Inc.
v Northwestern Bell Tel. Co. (1989) 492 US 229, 106 L Ed 2d 195, 109 S Ct 2893.
Although "organized crime" is nebulous term, application of term to "Chicago Outfit", one of oldest and most notorious criminal enterprises in country, is not "double counting" for purpose of upward departure in sentencing. United
States v Rainone (1994, CA7 Ill) 32 F3d 1203, reh, en banc, den (1994, CA7 Ill) 1994 US App LEXIS 30984 and cert
den (1995) 515 US 1102, 132 L Ed 2d 254, 115 S Ct 2245, post-conviction relief den (1997, ND Ill) 966 F Supp 722,
post-conviction relief den (1997, ND Ill) 969 F Supp 512, post-conviction relief den (1999, ND Ill) 58 F Supp 2d 920
(criticized in United States v Sanin (2001, CA2 NY) 252 F3d 79).
It was highly unlikely that Congress intended to make conviction under 18 USCS §§ 1961 and 1962 turn on showing that defendant was in some way member of "organized crime", and to require proof beyond reasonable doubt that
defendant was member of "organized crime", with highly subjective and prejudicial connotations of that term, would
simply render statute unenforceable, which result was plainly not in contemplation of Congress; rather than attempt to
define "organized crime" and make membership therein unlawful, Congress defined unlawful pattern of racketeering
activity in terms of types of crimes and behavior commonly engaged in by organized crime and attempts to seize interest in legitimate businesses, and in so defining offense, Congress clearly understood that while statute applied primarily
to members of organized crime, statute could not be applied exclusively to members of organized crime. United States
v Mandel (1976, DC Md) 415 F Supp 997 (criticized in United States v Adkins (2004, WD Va) 2004 US Dist LEXIS
19951).
Nexus with organized crime is not required by criminal or civil RICO. D'Iorio v Adonizio (1982, MD Pa) 554 F
Supp 222 (superseded by statute as stated in A.J. Cunningham Packing Corp. v Congress Financial Corp. (1986, CA3
Pa) 792 F2d 330).
Weight of authority supports proposition that association with organized crime is not prerequisite for liability under
RICO and accordingly, affiliation with organized crime may not be alleged in bringing action under RICO. Windsor
Associates, Inc. v Greenfeld (1983, DC Md) 564 F Supp 273.
21. Relationship among predicate acts
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18 USCS § 1961
To prove pattern of racketeering activity for purposes of RICO Act, plaintiff or prosecutor must show that predicate
acts of racketeering activity are related and that they amount to or pose threat of continued criminal activity; it is reasonable to infer that flexible approach is intended, and legislative history reveals intent to require showing of continuity
plus relationship. H. J., Inc. v Northwestern Bell Tel. Co. (1989) 492 US 229, 106 L Ed 2d 195, 109 S Ct 2893.
Crux of defendant's appeal was his claim that government failed to prove that predicate acts alleged in racketeering
counts--Racketeering Act One was murder and conspiracy to murder victim one, Racketeering Act Two was murder and
conspiracy to murder victim two, and Racketeering Act Three was loansharking business--formed unitary pattern of
racketeering activity indispensable to prosecution arising under either 18 USCS § 1962(c) or (d); defendant argued acts
were committed years apart, by different people and for different reasons, and could not establish pattern of racketeering
activity and contended that instead of independently establishing requirements for proving pattern of racketeering activity, which required proving both horizontal and vertical relatedness, government improperly used what was essentially
same evidence to prove both avenues of relatedness; government sufficiently demonstrated that three predicate acts
were related to organized crime enterprise, as well as to each other; such was sufficient to satisfy relatedness requirement under Racketeer Influenced and Corrupt Organizations Act. United States v Daidone (2006, CA2) 471 F3d 371.
Two or more racketeering predicates constitute "pattern of racketeering activities" under 18 USCS § 1961(5) if they
are related and amount to or pose threat of continued criminal activity; "relatedness" prong may be satisfied by proof
that predicate acts have same or similar purposes, results, participants, victims, or methods of commission, or otherwise
are interrelated by distinguishing characteristics and are not isolated events. United States v Brandao (2008, CA1 Mass)
539 F3d 44.
Only relationship necessary for predicate acts alleged in prosecution for violation of 18 USCS § 1962 is that they be
acts of same enterprise; it is not necessary for activities to be related to each other. United States v De Palma (1978,
SD NY) 461 F Supp 778.
Racketeering activity means any act indictable under 18 USCS § 1343; fact that only one victim was alleged to
have been defrauded does not bar defendant's prosecution; it was precisely fact that same victim was alleged to have
been defrauded that may serve as connecting link in predicate acts to establish "pattern". United States v Chovanec
(1979, SD NY) 467 F Supp 41.
Pattern of racketeering activity must include racketeering acts sufficiently unconnected in time or substance to
warrant consideration as separate criminal episodes. Allington v Carpenter (1985, CD Cal) 619 F Supp 474 (ovrld as
stated in Young v Hamilton (2003, CA9 Cal) 92 Fed Appx 389).
To be related, predicate acts must generally involve common perpetrators, methods of commission, victims, or motives. Graham v Slaughter (1985, ND Ill) 624 F Supp 222.
To constitute pattern of racketeering activity, alleged predicate acts must show both "continuity" and "relatedness",
with relatedness of predicate acts established through proof of common perpetrators or victims, or similar purposes,
results, or methods of commission, and continuity requiring allegation that predicate acts occurred in different criminal
episodes. Medallion TV Enters. v SelecTV of Cal. (1986, CD Cal) 627 F Supp 1290, affd (1987, CA9 Cal) 833 F2d
1360, cert den (1989) 492 US 917, 106 L Ed 2d 588, 109 S Ct 3241 and (criticized in Webster v Omnitrition Int'l (1996,
CA9 Cal) 79 F3d 776, 96 CDOS 1419, 96 Daily Journal DAR 2427, CCH Fed Secur L Rep P 99071, RICO Bus Disp
Guide (CCH) P 9274).
Correct interpretation of "pattern" requirement requires more than two related acts; thus, acts alleged by plaintiff as
predicate acts did not meet those requirements of "pattern" as they were merely ministerial acts performed in execution
of single allegedly fraudulent scheme to deprive plaintiffs of their promised commission, and, as such, plaintiffs failed
to establish some sort of continuity between acts or threat of continuing criminal activity. Soper v Simmons International, Ltd. (1986, SD NY) 632 F Supp 244.
Shareholder's allegations were clearly sufficient to satisfy relatedness aspect of Racketeering Influenced and Corrupt Organizations Act where he alleged corporate officers and directors' actions were focused on looting corporation
and defrauding shareholders and alleged predicate acts of mail fraud and obstruction of justice were part and parcel of
this alleged scheme, having same purpose, victims, participants, and so forth. D'Addario v Geller (2003, ED Va) 264 F
Supp 2d 367, subsequent app, remanded (2005, CA4 Va) 2005 US App LEXIS 3233.
Plaintiff homeowner's allegations that consumers were induced into mortgages by misrepresentations and omissions as to their obligations or as to defendant title company's benefits, and that fraudulent documents were sent by mail
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or interstate telecommunications carriers, sufficiently alleged pattern of racketeering under 18 USCS § 1961(5). Beard v
Worldwide Mortg. Corp. (2005, WD Tenn) 354 F Supp 2d 789.
Plaintiff's RICO claim had to be dismissed under Fed. R. Civ. P. 12(b)(6) because plaintiff had not properly alleged
pattern of racketeering activity; alleged scheme was narrowly focused on one goal (one set of equipment in Mexico) and
would end when and if that goal is accomplished. Dtex, LLC v BBVA Bancomer, S.A. (2005, DC SC) 405 F Supp 2d
639.
Unpublished Opinions
Unpublished: Evidence was sufficient to prove that four charged racketeering acts were related to "Patio Crew"
racketeering enterprise where reasonable jury could have concluded that defendant's theft of five kilograms of cocaine
from rival drug dealer was related to "Patio Crew's" narcotics activities in keeping others from selling drugs on its turf,
reasonable jury also could have found that although defendant and other "Patio Crew" members murdered rival drug
dealer's associate in response to threat against defendant's mother, they did so in order to retain drugs that defendant had
stolen as well, and jury was well within its rights to find that killing of individual to prevent him from testifying against
fellow "Patio Crew" member was connected to enterprise's goal of discouraging individuals from cooperating with police. United States v Dixon (2006, CA2) 2006 US App LEXIS 4087.
b.Particular Conduct 22. Arson
If 2 or more of acts of racketeering under RICO, which include arsons punishable under state law by imprisonment
for more than one year, and crimes indictable under federal mail fraud laws or federal laws that prohibit interstate travel
with intent to commit arson, are connected to each other in some logical manner so as to effect unlawful end, pattern of
racketeering exists. United States v Starnes (1981, CA7 Ill) 644 F2d 673, cert den (1981) 454 US 826, 70 L Ed 2d 101,
102 S Ct 116 and (criticized in Truck Ins. Exch. v Kafka (1995, ND Ill) RICO Bus Disp Guide (CCH) P 8873).
Alleged scheme by insured involving mailing of false statements of value of insured's goods and false proof of loss
did not constitute pattern of racketeering activity for purposes of civil RICO action, where there was nothing to indicate
threat of continuing criminal activity beyond goal of inducing insurer to pay fraudulent insurance claim; insured's arson
would merely supply evidence of additional predicate act, not evidence of threat of continuing criminal activity, and
even if prior insurer was initial target of insurance fraud, pattern of racketeering activity was not shown merely because
identity of insurer was changed during course of alleged scheme, where scheme had only one target, the insurer of insured's goods, and one finite goal, inducing that insurer to pay fraudulent claim. Albany Ins. Co. v Esses (1987, CA2
NY) 831 F2d 41 (ovrld in part on other grounds by United States v Indelicato (1989, CA2) 865 F2d 1370) and (ovrld as
stated in Advanced Magnetics v Bayfront Partners (1994, SD NY) CCH Fed Secur L Rep P 98343) and (ovrld as stated
in Jenkins v Sea-Land Serv. (1994, SD NY) 1994 US Dist LEXIS 11477).
23. Bankruptcy fraud
RICO complaint alleging that shareholders of subcontractor filed fraudulent petition to have general contractor declared involuntary bankrupt for sole purpose of harming general contractor's business, falsely included other subcontractors as creditors on petition, gave false testimony under oath at bankruptcy hearing, falsely publicized that general
contractor was bankrupt, and used mails to transmit threatening letters and to further false bankruptcy scheme did not
show requisite "continuity" of acts to state claim under RICO; complaint alleged single victim, single injury, and single,
short-lived scheme with only 2 active perpetrators, which did not constitute pattern of racketeering activity. Marshall-Silver Constr. Co. v Mendel (1987, CA3 Pa) 835 F2d 63, vacated (1989) 492 US 913, 106 L Ed 2d 582, 109 S Ct
3233.
Claim against defendant bank charged in civil RICO action in connection with involuntary bankruptcy petition
must be dismissed where allegation that defendant bank engaged in loan negotiations and filed petition, without notice,
disavowing these negotiations, does not describe pattern of racketeering activity by bank. Paradise Hotel Corp. v Bank
of Nova Scotia (1988, CA3 VI) 842 F2d 47, 17 BCD 599, 18 CBC2d 838, CCH Bankr L Rptr P 72241.
Plaintiffs failed to state valid RICO claim where they claimed only that defendant engaged in fraud connected to
bankruptcy case in sale of securities, but failed to allege that such acts amount to continued criminal activity, nor alleged that defendant derived income from such acts. Lane v Peterson (1990, CA8 Ark) 899 F2d 737, cert den (1990)
498 US 823, 112 L Ed 2d 48, 111 S Ct 74.
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State does not have power to impose substantive exhaustion requirement of federal claims; thus, plaintiff need not
exhaust state remedies before bringing federal RICO claim. Glickstein v Sun Bank/Miami, N.A. (1991, CA11 Fla) 922
F2d 666, 18 FR Serv 3d 1476 (criticized in Saxton v ACF Indus. (2001, CA11 Ala) 239 F3d 1209, 48 FR Serv 3d 829,
14 FLW Fed C 354).
It is sufficient to sustain conviction under RICO statute where affairs of theatre are conducted by engaging in securities fraud during initial sale of share interest in theatre and in bankruptcy fraud when theatre was brought into Chapter
XI. Engl v Berg (1981, ED Pa) 511 F Supp 1146, CCH Fed Secur L Rep P 97990.
Creditor established pattern of racketeering activity where complaint alleged that officer and shareholder of debtor
corporation fraudulently conveyed debtor's stock to third party to avoid bankruptcy proceedings, made false statements
in furtherance of conveyance, and attorney of officer and shareholder bribed judge, because such acts constituted bankruptcy fraud and were clearly connected. Bankers Trust Co. v Feldesman (1986, SD NY) 648 F Supp 17, dismd, on reh
(1987, SD NY) 676 F Supp 496, revd on other grounds (1988, CA2 NY) 859 F2d 1096, cert den (1989) 490 US 1007,
104 L Ed 2d 158, 109 S Ct 1642.
District court dismissed claims under brought Racketeer Influenced and Corrupt Organizations Act, 18 USCS §
1961, et seq., that alleged predicate offense of bankruptcy fraud, in absence of specific allegations of scienter and allegations of long term criminal racketeering activity. First Capital Asset Mgmt. v Brickellbush, Inc. (2002, SD NY) 219 F
Supp 2d 576, RICO Bus Disp Guide (CCH) P 10328, affd (2004, CA2 NY) 385 F3d 159.
Motion to dismiss Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq., claim
against individual was denied because fraudulent transfer of assets to others to shield them from bankruptcy estate constituted predicate act under 18 USCS § 152 to support RICO claim. Cadle Co. v Flanagan (2003, DC Conn) 271 F Supp
2d 379.
24. Bribery
Where complaint alleges that at different times over course of at least 6-year period, telephone company and other
individuals and corporations gave numerous bribes, in several forms, to members of state public utilities commission
with objective of causing such members to approve unfair and unreasonable telephone rates, remand is necessary because it may be possible to prove that multiple predicates alleged constitute "pattern of racketeering activity" within
meaning of RICO. H. J., Inc. v Northwestern Bell Tel. Co. (1989) 492 US 229, 106 L Ed 2d 195, 109 S Ct 2893.
Separate acts of bribery are not considered as installments of one overall bribe when determining whether there
have been 2 acts of racketeering activity required to constitute "pattern of racketeering activity." United States v Karas
(1980, CA4 W Va) 624 F2d 500, cert den (1981) 449 US 1078, 66 L Ed 2d 800, 101 S Ct 857.
Complaint that corporation paid bribe to obtain subcontracts failed to allege pattern of racketeering for purposes of
civil RICO action; even though bribe was paid in 3 installments and defendants exchanged several letters and telephone
calls in executing payment, bribe was paid to one person in connection with one set of subcontracts. Roeder v Alpha
Industries, Inc. (1987, CA1 Mass) 814 F2d 22, CCH Fed Secur L Rep P 93187.
Multiple bribes given by real estate developers to town officials over long period of time, involving at least two
bribery schemes which victimized taxpayers and resident of town, were part of related pattern of municipal corruption
for benefit of common participants, and therefore constituted RICO pattern of racketeering activity. Kearny v Hudson
Meadows Urban Renewal Corp. (1987, CA3 NJ) 829 F2d 1263.
Evidence that defendant paid 3 separate bribes to village officials over period of several years in connection with
award and performance of garbage collection contract satisfied "continuity plus relationship" test and permitted conclusion that defendant engaged in RICO pattern of racketeering activity. United States v Horak (1987, CA7 Ill) 833 F2d
1235.
Factual allegations in corporation's amended complaint satisfy RICO's pattern requirement, where, inter alia,
amended complaint alleges "upon information and belief" that certain defendants have engaged in improper actions
similar to particularly pled bribery payments through Panamanian entities to Nigerian officials in exchange for award of
contract to construct aeromedical facility in Nigeria. Environmental Tectonics v W.S. Kirkpatrick, Inc. (1988, CA3 NJ)
847 F2d 1052, 1988-1 CCH Trade Cases P 67994, 25 Fed Rules Evid Serv 1021, affd (1990) 493 US 400, 107 L Ed 2d
816, 110 S Ct 701, 1990-1 CCH Trade Cases P 68894.
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Two separate attempts to decertify union through bribery constitute 2 predicate acts of bribery as separate and independent wrongs sufficient to establish pattern of racketeering under RICO, where acts were separate in time, and involved different individual employees, despite fact that they may be part of single general purpose to get rid of union.
Hospital Employees' Div. of Local 79 v Mercy-Memorial Hosp. Corp. (1988, CA6 Mich) 862 F2d 606, 130 BNA LRRM
2022, 110 CCH LC P 10855, vacated, remanded (1989) 492 US 914, 106 L Ed 2d 584, 109 S Ct 3236, 131 BNA LRRM
3072, 112 CCH LC P 11266.
RICO conviction, which requires two separate predicate acts, cannot be based on single act of using telephone to
promote bribery and extortion, even though act encompassed two criminal offenses. United States v Walgren (1989,
CA9 Wash) 885 F2d 1417.
Defendant's willingness to facilitate corruption in city parking violations bureau amplified 2 predicate acts of bribery and entailed sufficient threat of continuity to constitute RICO pattern. United States v Kaplan (1989, CA2 NY) 886
F2d 536, cert den (1990) 493 US 1076, 107 L Ed 2d 1033, 110 S Ct 1127.
Where plaintiff manufacturer sued defendants(two suppliers and one of supplier's salesmen) alleging defendants
bribed manufacturer's buyer, claim under 18 USCS § 1961(1) of Racketeer Influenced and Corrupt Organizations Act
(RICO), was properly dismissed because, while bribery was one of offenses upon which RICO claim could be based,
bribe itself was not RICO offense; it was predicate act of RICO enterprise and no enterprise was shown. Williams Elecs.
Games, Inc. v Garrity (2004, CA7 Ill) 366 F3d 569, 2004-1 CCH Trade Cases P 74390.
Single, ongoing scheme to defraud by obtaining bribes or kickbacks, which involves series of unlawful acts, can
establish "pattern" for purposes of 18 USCS § 1962, and it is not necessary to establish two or more totally independent
criminal acts. United States v Salvitti (1978, ED Pa) 451 F Supp 195, affd without op (1978, CA3 Pa) 588 F2d 822
and affd without op (1978, CA3 Pa) 588 F2d 824.
Numerous payoffs constitute pattern of racketeering activity as defined by 18 USCS § 1961(5) despite fact that they
are related to one overall bribery scheme. United States v Mazzio (1980, ED Pa) 501 F Supp 340, affd without op
(1982, CA3 Pa) 681 F2d 810, cert den (1982) 457 US 1134, 73 L Ed 2d 1351, 102 S Ct 2960, 102 S Ct 2961.
For purposes of establishing pattern of racketeering activity under 18 USCS § 1961, accepting contributions which
are alleged to be bribes will not constitute pattern of racketeering activity where such acceptance takes place at single
fund raising occasion. Teleprompter of Erie, Inc. v Erie (1981, WD Pa) 537 F Supp 6 (criticized in Independent Enters. v Pittsburgh Water & Sewer Auth. (1997, CA3 Pa) 103 F3d 1165).
Attorney who makes bribery payments to fix 10 separate cases, involving as many different criminal defendants,
has engaged in pattern of racketeering activity. United States v Yonan (1985, ND Ill) 622 F Supp 721.
Pattern requirement under 18 USCS § 1961(5) is met where defendant company is charged with overall goal of increasing profits through allegedly illicit means by (1) bribing school district employees in order to procure lunch program contract and ensure higher profit return, (2) mail fraud, and (3) obstruction of justice. United States v Freshie Co.
(1986, ED Pa) 639 F Supp 442.
Government alleged and proved pattern of racketeering activity in RICO prosecution where defendants, over two
and a half year period, made bribes and offers of bribes to IRS agent, because even multiple payments pursuant to one
extortionate demand constitute pattern of racketeering activity. United States v Persico (1986, SD NY) 646 F Supp
752, affd in part and revd in part (1987, CA2 NY) 832 F2d 705, 24 Fed Rules Evid Serv 137, 89 ALR Fed 857, cert den
(1988) 486 US 1022, 100 L Ed 2d 227, 108 S Ct 1995, 108 S Ct 1996 and cert den (1988) 488 US 982, 102 L Ed 2d 564,
109 S Ct 532.
Towing service's RICO claim against president of rival towing service is dismissed with leave to amend within 30
days, where complaint alleges that president conducted affairs of rival towing service in part through bribing mayor of
village to obtain towing contract, which caused plaintiff to lose identifiable source of business, but fails to plead enough
facts--period of time over which bribes occurred, how many bribes, how many contracts, other victims, distinct injuries--to allege "pattern" of racketeering activity. H.G. Gallimore, Inc. v Abdula (1987, ND Ill) 652 F Supp 437.
Complaint fails to state pattern of racketeering activity where telephone customers alleged telephone company
committed numerous acts of bribery and improper influence over extended period of time illegally to influence members of state public utilities commission in setting of rates, because all alleged acts were in furtherance of single scheme
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18 USCS § 1961
to influence commission members to detriment of ratepayers. H.J., Inc. v Northwestern Bell Tel. Co. (1987, DC Minn)
653 F Supp 908.
Manufacturer fails to state claim under 18 USCS § 1961(5), where complaint alleges manufacturer's president was
bribed several times by distributor, because "pattern" of racketeering activity is not alleged; payments were part of single criminal episode and not sufficiently distinct. Four Star Corp. v Clink (1987, ED Mich) 702 F Supp 617.
Former mayor is entitled to judgment of acquittal as to 3 racketeering acts, where his conduct in this regard solely
involved acts committed to conceal bribery, because his violation of state official misconduct statute by not disclosing
source of income on his statements of economic interest does not constitute requisite act of bribery under 18 USCS §
1961. United States v Genova (2002, ND Ill) 187 F Supp 2d 1015, affd in part and revd in part, remanded, vacated, in
part (2003, CA7 Ill) 333 F3d 750, reh den (2003, CA7 Ill) 2003 US App LEXIS 16935.
Former mayor is entitled to judgment of acquittal as to 3 racketeering acts, where his conduct in this regard solely
involved acts committed to conceal bribery, because his violation of state official misconduct statute by not disclosing
source of income on his statements of economic interest does not constitute requisite act of bribery under 18 USCS §
1961. United States v Genova (2002, ND Ill) 187 F Supp 2d 1015, affd in part and revd in part, remanded, vacated, in
part (2003, CA7 Ill) 333 F3d 750, reh den (2003, CA7 Ill) 2003 US App LEXIS 16935.
Unpublished Opinions
Unpublished: Debtor's claim that bribery, as defined in O.C.G.A. § 16-10-2, had been committed by bank and its
director and was therefore predicate act for purposes of debtor's civil Racketeer Influenced and Corrupt Organizations
Act claims, was without merit; debtor contended that bank bribed his ex-wife to file for divorce and to write check from
his account, but there was no evidence that ex-wife was state official or representative. Tucker v Morris State Bank
(2005, CA11 Ga) 154 Fed Appx 183.
25. Contract-related fraud
Pattern of racketeering activity under RICO (18 USCS §§ 1961 et seq.) is not shown by single scheme against single victim, where defendant director of corporation never intended to abide by terms of contract, despite allegations
pointing to fraudulent acts spanning 7 years depriving plaintiff of money properly due to it on many distinct occasions,
given unity and narrow focus of scheme. Flip Mortgage Corp. v McElhone (1988, CA4 Va) 841 F2d 531.
Separate racketeering acts must reflect both "continuity" and "relatedness" to constitute pattern of racketeering activity under RICO (18 USCS §§ 1961 et seq.), and defendant physicians' plan to outmaneuver plaintiff emergency services associates and interfere with its contractual relationship with hospital failed to satisfy continuity aspect of pattern
requirement, where it involved single victim, inflicted single injury, and essentially occurred within two month period,
despite plaintiff's argument that particular alleged fraudulent acts should be viewed as separate and distinct "subschemes" causing separate injuries. Medical Emergency Service Associates, S.C. v Foulke (1988, CA7 Ill) 844 F2d
391, 10 FR Serv 3d 1239.
Repeated criminal acts may constitute pattern notwithstanding fact that they all affect single victim, involve same
or similar purpose, and utilize identical means, and fact that fraudulent promises all took place within 6 month period
was not basis on which to dismiss complaint where plaintiffs alleged that 5 separate escrow agreements were executed
on 4 separate occasions, each of which related to separate public contract, each alleged mailing instigated new diversion
of public funds, and separate diversions could be characterized as new criminal acts, not simply constituent mailings
performed in execution of single transaction. Heritage Ins. Co. v First Nat'l Bank (1986, ND Ill) 629 F Supp 1412.
Although plaintiff alleged necessary predicate acts, multiple acts of mail fraud, it failed to allege any threat of continuing activity where case revolved entirely around single contract, which was to be performed within limited period of
time; thus, it would have been inappropriate to find pattern of racketeering or to impose liability under 18 USCS § 1964.
Frankart Distribs. v RMR Advertising (1986, SD NY) 632 F Supp 1198.
Pattern of racketeering activity requirement under 18 USCS § 1961 is not satisfied where creditors allege that debtor fraudulently borrowed money without intending to pay it back because conduct of debtor in borrowing money
amounts to acts in furtherance of only one scheme--not to pay back creditors. Zahra v Charles (1986, ED Mich) 639 F
Supp 1405, CCH Fed Secur L Rep P 92883.
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18 USCS § 1961
"Pattern of racketeering activity" is not alleged under 18 USCS § 1961(5) in action under 18 USCS § 1964(c) by
manufacturer of oil drilling equipment against supplier and others, because (1) complaint properly alleges only single
act of commercial bribery under state law and (2) even if complaint properly alleged mail fraud, wire fraud, and Travel
Act (18 USCS § 1952) violations, requisite continuity would not be present since all alleged predicate acts arose from
single episode--attempt to obtain certain contracts from manufacturer. NL Industries, Inc. v Gulf & Western Industries,
Inc. (1986, DC Kan) 650 F Supp 1115, 1986-2 CCH Trade Cases P 67331.
Utility company's RICO complaint that nuclear reactor supplier engaged in "pattern" of racketeering activity by inducing utility to enter into original contract and concealing supplier's knowledge of hydrodynamic loads to induce
change orders to original contract alleges two distinct schemes, where (1) first scheme continued until execution of contract and involved more than one predicate act after effective date of RICO statute and (2) second scheme involved numerous change orders and use of mail and wires. Cincinnati Gas & Electric Co. v General Electric Co. (1986, SD
Ohio) 656 F Supp 49, CCH Prod Liab Rep P 11255.
New York's RICO action charging individual and corporate defendants with fraudulent conduct regarding contracts
for remedial work at Love Canal will not be dismissed where state fulfilled "pattern" requirement by alleging series of
racketeering activities which extended beyond life of single contract, in furtherance of one scheme. New York v O'Hara (1987, WD NY) 652 F Supp 1049.
Borrowers' RICO action against lender is dismissed for failure to allege pattern of racketeering activity where complaint stated (1) lender tried to force borrowers out of business and take over their assets, and (2) lender made misrepresentations resulting in loss of one borrower's property, because complaint only alleges single scheme of lenders to renege on promises concerning loans in effort to obtain borrowers' collateral. In re Palombo Farms of Colorado (1988,
DC Colo) 692 F Supp 1271.
In action by tenant partners against landlord and its partners alleging, inter alia, breach of contract, fraud, and violations of Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1961 et seq. (RICO), investigatory report
sought by tenant partners was relevant under Fed. R. Civ. P. 26(b)(1) to issue of over-charging or problematic charging
of tenants, which was basis of tenant partners' RICO claim, and investigatory report was relevant in that it might lead to
other admissible evidence regarding culpability and degree of culpability. Lugosch v Congel (2003, ND NY) 218 FRD
41.
Court granted summary judgment to defendants in plaintiffs' action alleging that their former parent company and
its directors violated Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq., when they
failed to disclose that parent company did not consider negotiations of parties with respect to principal underwriting
agreement as final because: (1) parent company was not distinct from its insuring subsidiary and, thus, plaintiffs could
not establish enterprise under 18 USCS § 1961(4); and (2) plaintiffs' failed to sufficiently allege that directors intentionally withheld information and, thus, could not establish, under 18 USCS § 1961(5), alleged predicate acts of mail fraud,
violation of 18 USCS § 1341, and wire fraud, violation of 18 USCS § 1843; alternatively, plaintiffs failed to show either
open-ended or closed-ended continuity based on single alleged scheme. Waddell & Reed Fin., Inc. v Torchmark Corp.
(2004, DC Kan) 223 FRD 566, findings of fact/conclusions of law, judgment entered (2004, DC Kan) 337 F Supp 2d
1243.
26.--Construction
RICO pattern was not established, since business relationship between university and construction subcontractor
involved only single transaction and single victim, backcharges filed by university did not constitute separate injury,
and sole injury to subcontractor was its nonreceipt of money allegedly due it upon completion of and for extra work
performed on project. Brandt v Schal Assoc., Inc. (1988, CA7 Ill) 854 F2d 948, 11 FR Serv 3d 1549.
Pattern of racketeering activity may be discerned from allegations that defendants (1) induced execution of 10-year
studio lease by fraudulently misstating their experience, expertise, and construction cost estimates; (2) induced plaintiffs
to continue with project, and induced one plaintiff to guarantee construction financing by fraudulently misrepresenting
and concealing costs; (3) fraudulently diverted construction funds and charged excessive fees; (4) improperly escrowed
construction loan funds to build cushion against discovery of alleged fraud; and (5) fraudulently schemed to collect interim rent for delays primarily caused by defendants. Procter & Gamble Co. v Big Apple Indus. Bldgs. (1989, CA2 NY)
879 F2d 10, cert den (1990) 493 US 1022, 107 L Ed 2d 743, 110 S Ct 723.
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18 USCS § 1961
Allegations that drilling contractor and subcontractor falsified 17 reports concerning type of sand used to fracture
oil and gas wells over 4 month period were not sufficient to show continuity. Parcoil Corp. v Nowsco Well Service,
Ltd. (1989, CA4 W Va) 887 F2d 502, 107 OGR 408.
Property owners failed to state pattern of racketeering activity where complaint alleged contractor committed several acts of wire and mail fraud which revolved around single contract to construct single residence over 5-month period, and thus only isolated scheme is alleged. Maussner v McCormick (1986, WD NY) 653 F Supp 131.
Corporation failed sufficiently to allege pattern of racketeering activity by limited partnerships in scheme to defraud corporation into constructing more valuable apartment complexes than contracted for and withhold payment on
such changes, because complaint alleges each partnership participated in only one fraudulent scheme, there are no allegations of connection with other schemes, and fraudulent mailings are only evidence of intent, rather than pattern.
Omega Constr. Co. v Altman (1987, WD Mich) 667 F Supp 453.
General contractor's RICO claims must be dismissed, where complaint merely describes long scheme by developer,
his corporation and 2 limited partnerships to defraud contractor in connection with construction of one shopping mall
and alleges very generally RICO conspiracy to accomplish scheme, because complaint inadequately describes participants, formation and activities of conspiracy and alleges scheme that does not rise to level of pattern of racketeering
activity. J.A. Moore Constr. Co. v Sussex Associates Ltd. Partnership (1988, DC Del) 688 F Supp 982.
27.--Employment
RICO civil complaint failed to sufficiently allege pattern of racketeering activity, where alleged scheme fraudulently to deprive employees of their vacation benefits through use of mails and telephones failed to meet the concept of
"continuity plus relationship." Aldridge v Lily-Tulip, Inc. (1992, CA11 Ga) 953 F2d 587, 14 EBC 2457, 121 CCH LC P
10005, 6 FLW Fed C 38, reh, en banc, den (1992, CA11 Ga) 961 F2d 224 and subsequent app (1994, CA11 Ga) 40 F3d
1202, 8 FLW Fed C 926 (criticized in Ackerman v Warnaco, Inc. (1995, CA3 Pa) 55 F3d 117, 19 EBC 1388, 95 TNT
103-10) and cert den (1995) 516 US 1009, 133 L Ed 2d 490, 116 S Ct 565, subsequent app (1998, CA11 Ga) 145 F3d
363, reh, en banc, den (1998, CA11 Ga) 152 F3d 937 and cert den (1999) 525 US 1069, 142 L Ed 2d 661, 119 S Ct 799.
Complaint fails to allege pattern of racketeering activity where corporation alleged repeated acts of self-dealing by
employee in violation of single contractual promise to devote exclusive services to corporation, because single fraudulent scheme, though composed of numerous predicate acts, does not constitute pattern under RICO. Sybedon Corp. v
Mendell (1986, SD NY) 646 F Supp 937.
Former employee's RICO claim is denied where alleged predicate acts of mail and wire fraud were part of single
scheme to defraud employee out of promised interest in profit-sharing plan and employee failed to allege or establish
any other similar schemes or criminal activities to show required continuity of enterprise. Simon v Fribourg (1986, DC
Minn) 650 F Supp 319, CCH Fed Secur L Rep P 93165.
Discharged employee's RICO action fails to allege pattern of racketeering activity as discharge constituted single
transaction and alleged acts of mail and wire fraud are merely elements of single unified activity. Penry v Hartford
Fire Ins. Co. (1987, ED Tex) 662 F Supp 792, 111 CCH LC P 10992.
Truck driver/RICO plaintiff sufficiently alleged that he was defrauded of tangible property by scheme involving
use of mail and telephone wires, where relevant facts disclose that driver answered newspaper advertisement placed by
employer/trucking company, received brochure and application from company through mail, and talked to company
recruiter by telephone prior to entering into employment/operating agreement that did not live up to driver's expectations, because jury could find that documents and information communicated to plaintiff were fraudulent, in violation of
18 USCS §§ 1341 and 1343, and that multiple transmissions constituted pattern of racketeering activity in violation of
18 USCS § 1962. Waldo v North American Van Lines, Inc. (1987, WD Pa) 669 F Supp 722, 1987-2 CCH Trade Cases
P 67811.
RICO complaint by corporation against former employees, foreign corporation and new venture must be dismissed
without prejudice, where allegations are that former employees resigned and conspired with foreign corporation to form
new venture for purpose of breaching plaintiff's commission agreement with foreign corporation and wrongfully usurping share of paper products market developed under agreement, because plaintiff has failed to allege sufficient continuity to properly plead pattern of racketeering activity necessary to sustain RICO claim. Celpaco, Inc. v MD Papierfabriken (1988, DC Conn) 686 F Supp 983.
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Former employee is denied leave to file amended complaint renewing RICO claim against former employer, where
employee alleges numerous acts occurring over period of less than one year all leading up to alleged breach of his employment contract, because multiple preparatory acts leading up to infliction of single basic injury "are simply not stuff
on which RICO claims are made." Selman v American Sports Underwriters, Inc. (1988, WD Va) 697 F Supp 225.
Civil racketeering claim fails where former employee accused his employer of fraud in connection with his hiring,
because multiple acts were in furtherance of single scheme and thus no pattern of racketeering activity is alleged.
Flannery v IFA, Inc. (1989, ND Ill) 722 F Supp 498.
Computer programmer's RICO claim against former employer must be dismissed, despite allegations of multiple
instances of mail and wire fraud, where programmer claims he was hired as president of firm and then discharged 2
years later after key software he developed was usurped without recompense, because allegations simply do not meet
RICO "pattern" requirement since aspects of scheme reveal one goal directed against one plaintiff which when achieved
would lead to no further conduct. Benard v Hoff (1989, DC Md) 727 F Supp 211.
Manner in which Department of Labor handled or disposed of university employee's discrimination complaints was
not indictable and did not constitute racketeering activity under 18 USCS § 1961(1), where allegations that department
or its personnel failed to investigate employee's complaints or to forward employee's case to EEOC, and failed to notify
employee of his appeal rights in writing, did not state cause of action under statute. Dees v California State Univ. (1998,
ND Cal) 33 F Supp 2d 1190, RICO Bus Disp Guide (CCH) P 9684.
28.--Franchises, dealerships, and distributorships
"Pattern of racketeering" under RICO requires allegations and proof of multiple criminal episodes, illegal transactions separated in time, and reasonable inference that "pattern" is regular part of way defendant does business; thus,
manufacturer's allegations that company that distributes and resells manufacturer's products falsified delivery receipts
causing manufacturer to overbill some customers and overpay and overcredit distributor fail to meet "pattern of racketeering" requirement where allegations fail to show that falsification of delivery tickets and conversion occurred on regular basis and fail to identify number of instances of mail fraud. Papai v Cremosnik (1986, ND Ill) 635 F Supp 1402.
RICO complaint is dismissed where allegations of fraud in cosmetic marketing agreement and conversion of funds
show only isolated, sporadic episode of single criminal scheme and thus does not meet pattern of racketeering requirement. B.J. Skin & Nail Care, Inc. v International Cosmetic Exchange, Inc. (1986, DC Conn) 641 F Supp 563.
Pattern of racketeering activity requirement under 18 USCS § 1962 is not satisfied where manufacturer's alleged
misrepresentation to induce distributor to enter into agreement to distribute waterproofing compound and manufacturer's alleged failure to live up to its obligations under agreement by terminating distributor's status for selling compound
at prices lower than manufacturer's other distributors and contractors are merely individual components of single
scheme to deprive distributor of manufacturer's goods. Carlucci v Owens-Corning Fiberglas Corp. (1986, ED NY) 646
F Supp 1486.
Auto dealer alleges pattern of racketeering sufficient to withstand motion to dismiss, where dealer alleges ongoing
scheme among some dealers and regional distributor to falsify sales reports to effect allotment to dealers of scarce imported cars, since there was no distinct end of episode, but alleged fraud could have continued indefinitely. Jim Forno's Continental Motors, Inc. v Subaru Distributors Corp. (1986, ND NY) 649 F Supp 746, 1987-1 CCH Trade Cases P
67427.
Franchisees' RICO claim against owner of franchise rights is dismissed where single scheme alleged did not have
requisite "pattern of racketeering activity," since acts were not on-going and did not constitute regular way defendant
conducted business. Thompson v Wyoming Alaska, Inc. (1987, DC Utah) 652 F Supp 1222.
Franchise purchasers failed to allege continuity element in RICO action alleging franchise sellers committed fraud
in negotiation and sale of ice-cream franchises because, although fraud allegedly occurred over period of several
months, continuity element cannot be fulfilled by fraud alleged as part of single set of negotiations between two entities
which culminated in purchase of two franchises. Nassau-Suffolk Ice Cream, Inc. v Integrated Resources, Inc. (1987,
SD NY) 662 F Supp 1499.
Automobile dealer failed sufficiently to allege pattern of racketeering activity where dealer alleges one scheme in
which supplier conspired with another dealer to coerce plaintiff dealer to sell franchise to other dealer at below market
value, but does not allege any time span for activities in question or that any other dealers were targeted by scheme,
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18 USCS § 1961
since, although single scheme can constitute RICO pattern, relevant factors are (1) number of illegal acts, (2) length of
time over which acts were committed, (3) similarity of acts, (4) number of victims, (5) number of perpetrators, and (6)
character of unlawful activity. Cemar, Inc. v Nissan Motor Corp. (1988, DC Del) 678 F Supp 1091, 1988-1 CCH
Trade Cases P 67922.
Distributor's RICO claim must be dismissed with prejudice, where distributor alleges scenario in which manufacturer fraudulently misrepresented propriety of its conducting business in exclusive territory over period of less than 4
months, because such short period of time is not sufficient to allege continuity or threat of continuity necessary to constitute pattern of racketeering activity. West Mountain Sales, Inc. v Logan Mfg. Co. (1989, ND NY) 718 F Supp 1084.
Civil racketeering claim is stated under 18 USCS § 1961, where franchisees allege multiple acts of fraud against
them for several years by franchisor and continuing fraud against other franchisees, because continuity and relationship
of alleged fraud is sufficient to constitute pattern of racketeering activity. Reeder v Kermit Johnson, Alphagraphics,
Inc. (1989, DC Utah) 723 F Supp 1428.
Civil racketeering claim is not alleged under 18 USCS § 1961, where complaint by franchise owners against manufacturer alleges predicate acts extending only over few weeks or months that threaten no future criminal conduct, because continuity requirement of pattern of racketeering activity is not met. Fry v General Motors Corp. (1989, ED
Mich) 728 F Supp 455.
Unpublished Opinions
Unpublished: Franchisors were entitled to summary judgment as to mail and wire fraud claims brought under
Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1961 et seq., because franchisee and its owner could
not prevail on any of their claims where they alleged that franchisors defrauded them by not providing loans, training,
and occupancy rates as promised; under applicable New Jersey law, parol evidence was inadmissible to vary franchise
agreement and claimed matters were not promised in franchise agreement. Bakrac, Inc. v Villager Franchise Sys., Inc.
(2006, CA11 Fla) 2006 US App LEXIS 425.
29.--Sales
Preparation of 19 false invoices over 7-month period involving 57 separate acts of mail and wire fraud resulted in
repeated infliction of economic injury on plaintiff, where each false invoice deprived plaintiff of its entitlement to rental
or replacement value for supposedly returned goods, and therefore constituted RICO pattern of racketeering activity
although invoices were prepared pursuant to single scheme to defraud single victim. Liquid Air Corp. v Rogers (1987,
CA7 Ill) 834 F2d 1297, 24 Fed Rules Evid Serv 254, cert den (1989) 492 US 917, 106 L Ed 2d 588, 109 S Ct 3241 and
(ovrld in part as stated in CIB Bank v Esmail (2004, ND Ill) 2004 US Dist LEXIS 26817) and (ovrld as stated in Equity
Residential v Kendall Risk Mgmt. (2005, ND Ill) 2005 US Dist LEXIS 8273).
No RICO pattern was established, where several acts of mail and wire fraud resulted in single transaction, such
predicate acts were committed over course of few months in furtherance of scheme to receive more for company division than it was worth, and predicate acts defrauded only one victim on only one occasion, which was the sale itself.
SK Hand Tool Corp. v Dresser Industries, Inc. (1988, CA7 Ill) 852 F2d 936, reh den, en banc (1989, CA7) 1989 US
App LEXIS 7923 and cert den (1989) 492 US 918, 106 L Ed 2d 589, 109 S Ct 3241.
Scheme involving mail and wire fraud in connection with sale of film rights to investors constituted pattern, where
9 separate acts were directed at 19 victims over period of several months and contract between investors and defendants
envisioned 10 year relationship. Fleischhauer v Feltner (1989, CA6 Ohio) 879 F2d 1290, amd (1989, CA6) 1989 US
App LEXIS 13561 and cert den (1990) 493 US 1074, 107 L Ed 2d 1029, 110 S Ct 1122 and cert den (1990) 494 US
1027, 108 L Ed 2d 611, 110 S Ct 1473.
Overbilling of buyer by supplier of gas constitutes "pattern of racketeering activity" under RICO where (1) each of
2 invoices contained at least 2 fraudulent representations and did independent damage to buyer by causing it to pay a
higher price than negotiated and (2) supplier would have continued to send such invoices to buyer if buyer had not refused to take any more gas, because invoices were series of ongoing criminal acts with necessary continuity and relationship to constitute pattern. Louisiana Power & Light Co. v United Gas Pipe Line Co. (1986, ED La) 642 F Supp
781.
"Pattern of racketeering activity" is not alleged under 18 USCS § 1961(5) in civil action by half-owner of shipping
corporation against other half-owner for allegedly inducing first half-owner to agree to sale of vessels with intention of
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18 USCS § 1961
keeping proceeds for himself where (1) vessels were sold simultaneously, and (2) alleged pattern consists of separate
activities leading up to and including sales, because any fraudulent mail or wire communications to arrange sales are
components of single activity. Emmanouilides v Buckthorn, Ltd. (1986, SD NY) 642 F Supp 964.
Complaint fails to allege pattern of racketeering activity where it describes series of misrepresentations to film
producers concerning single transaction which culminated in buyer's disputed purchase of all rights in film. Bear
Creek Productions, Inc. v Saleh (1986, SD NY) 643 F Supp 489.
RICO claims are dismissed in action by lessee transport company against lessor involving lease/purchase agreement for transport barges, where lessee claimed fraud, and extortion by lessor resulted in loss of optioned barges because all predicate acts alleged were in furtherance of single scheme to defraud lessee of payments and barges and thus
failed to establish required pattern. Brent Liquid Transport, Inc. v GATX Leasing Corp. (1986, ND Miss) 650 F Supp
467.
RICO claims are dismissed, because there is no "pattern of racketeering" in alleged misrepresentations over conditions of route sales business since single fraudulent scheme is involved. McBee v IHSS, Inc. (1987, DC Colo) 655 F
Supp 448.
RICO complaint sufficiently pleads "pattern of racketeering activity" and will not be dismissed, where defendants
contend victim has only asserted one criminal scheme in which they allegedly defrauded him regarding value of art
works, because complaint specifies six schemes involving separate sales of paintings and in any event one scheme or
episode may be pattern when accompanied by requisite predicate acts with continuity and relationship. Snider v Lone
Star Art Trading Co. (1987, ED Mich) 659 F Supp 1249.
Although not pleaded with necessary specificity and particularity, rejected bidder has potential claim for 18 USCS §
1962 RICO violation, where it alleges state purchasing director wrongfully rejected low bids of itself and others and
accepted higher bids of his friends' companies, because (1) state purchasing director may be RICO "person," (2) director's office or association-in-fact of director and accepted bidders and their directors may be RICO "enterprise," (3) rejected bidder could demonstrate injury from profit lost when it failed to receive state laundry purchase contracts, and (4)
plaintiff may raise existence of similar wrongful bidding practices harming bidders other than itself in order to establish
"pattern" requirement. Andersen-Myers Co. v Roach (1987, DC Kan) 660 F Supp 106.
Beauty product manufacturer's RICO charges are dismissed, where purchaser for foreign markets actually sold
products on domestic market, because violation of one contract or breaking same promise more than once does not create pattern of racketeering activity since it is not multiple criminal episodes or open-ended scheme. Revlon, Inc. v S.
Rauch Marketing, Inc. (1987, SD NY) 661 F Supp 262.
Corporation failed sufficiently to allege pattern of racketeering and enterprise elements of RICO action where, although 4 separate mailings were alleged, only one decision to defraud was made, involving change in makeup of light
bulb, and where corporation alleged its supplier was both person and enterprise when it contended "enterprise" was association in fact of supplier and its officer and employees, and "person" was supplier as corporation. Radionic Industries, Inc. v GTE Products Corp. (1987, ND Ill) 665 F Supp 622.
Restaurant owner failed to allege sufficient pattern of racketeering activity in action against restaurant buyers for
interference with contract, where complaint alleged commission of 6 fraudulent mailings which were all part of one
scheme to defraud owner of benefits of one contract. Singh v Curry (1987, ND Ill) 667 F Supp 603.
Ice company fails to allege pattern of racketeering activity by company that contracted to supply ice plant, where
alleged predicate acts of supplier involve single victim with single injury on single occasion, because alleged acts constitute single scheme without requisite continuity. Plant Process Equipment, Inc. v Continental Carbonic Products,
Inc. (1987, ND Ill) 668 F Supp 1191.
Investors failed to present facts showing accounting firm engaged in pattern of racketeering activity, where investors alleged firm fraudulently induced them to purchase limited partnership interests, failed to disclose new tax information, and failed to provide investment memorandum before purchase, because these are at most fraudulent acts implementing single fraudulent scheme to induce investment. Nerman v Alexander Grant & Co. (1987, WD Mo) 671 F
Supp 649, CCH Fed Secur L Rep P 93535.
Former corporate affiliate failed sufficiently to allege pattern of racketeering activity in suit against corporation for
alleged fraud in violation of affiliate agreement, where allegations involved only preparation of inaccurate sales reports
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18 USCS § 1961
and single telephone misrepresentation, because acts were small in number, unvaried in nature, occurred over 7 months,
and resulted in single injury to single victim. Derson Group, Ltd. v Right Management Consultants, Inc. (1988, ND Ill)
683 F Supp 1224 (criticized in Murnik v Kabo Chems. (1997, ND Ill) 1997 US Dist LEXIS 13595).
RICO pattern was sufficiently alleged that employer, by means of numerous devices, systematically cheated its
salespersons of their proper commission. Smith v MCI Telecommunications Corp. (1989, DC Kan) 124 FRD 665 (criticized in Smilow v Southwestern Bell Mobile Sys. (2001, DC Mass) 200 FRD 5).
Allegedly defrauded shareholder's RICO claim against former equal shareholder in equipment leasing company
must be dismissed, where claim is based on breach of stock purchase agreement and intentional bankruptcy of formerly
co-owned company, because scheme involving only one victim and one active perpetrator over short period of time
does not fulfill RICO prerequisite of "pattern of racketeering activity. Fiorentino v Converse (1989, ED Pa) 705 F
Supp 253, affd (1989, CA3 Pa) 884 F2d 1383 and affd without op (1990, CA3 Pa) 898 F2d 140.
Civil racketeering claim is not stated under 18 USCS § 1961(5), where complaint alleges that travel agency failed to
report or pay for airline ticket that agency sold, because single scheme is alleged and thus requisite pattern of racketeering activity is not alleged, notwithstanding that alleged scheme covered 13-month period. Airlines Reporting Corp. v
Aero Voyagers, Inc. (1989, SD NY) 721 F Supp 579.
30.--Service
Allegations that oil well services company and its subsidiaries and employees defrauded oil well drilling company
and its clients with respect to services and materials provided for 80 wells, owned by 19 parties and serviced by a 20th,
over a period of 11 months, and as part of work done under 2 contracts themselves pertaining to different time periods,
satisfied any RICO requirement that complaint allege predicate offenses forming at least 2 separate but related criminal
schemes, episodes, or activities. Petro-Tech, Inc. v Western Co. of N. Am. (1987, CA3 Pa) 824 F2d 1349 (criticized in
Hanrahan v Britt (1995, ED Pa) RICO Bus Disp Guide (CCH) P 8850, 1995-2 CCH Trade Cases P 71072) and (criticized in Standard Chlorine v Sinibaldi (1995, DC Del) RICO Bus Disp Guide (CCH) P 8944).
Independent contractor's allegations that housing authority falsely induced it to bid for and provide security services
when authority did not intend to award contract to contractor were not sufficient to support RICO pattern, since contractor alleged only one general scheme, one victim and one type of injury. Triad Assocs. v Chicago Hous. Auth.
(1989, CA7 Ill) 892 F2d 583, 15 FR Serv 3d 477, reh den, en banc (1990, CA7) 1990 US App LEXIS 3375 and cert den
(1990) 498 US 845, 112 L Ed 2d 97, 111 S Ct 129 and (criticized in Board of County Comm'rs v Umbehr (1996) 518 US
668, 135 L Ed 2d 843, 116 S Ct 2342, 96 CDOS 4821, 96 Daily Journal DAR 7732, 11 BNA IER Cas 1393, 10 FLW
Fed S 124).
Complaint does not allege racketeering claim against Cadillac repair service by customer allegedly charged by
stated hourly rate multiplied by number of hours manufacturer's manual states repairs should take, instead of number of
hours repairs actually took, because neither repair service's response to plaintiff's two telephone calls to ask whether
repairs to his vehicle were completed nor similarly charging other customers establishes necessary "pattern" of alleged
racketeering activity. Wolin v Hanley Dawson Cadillac, Inc. (1986, ND Ill) 636 F Supp 890.
Complaint of computer software company is dismissed for failure to allege "pattern of racketeering" where alleged
fraudulent acts resulted in contract to deliver one single software product in one state and contract was later amended to
expand delivery of product nationwide because predicate acts involved were all devoted to getting one specific contract
for one specific service and entire series of acts had single contemplated ending; subsequent amendment of contract to
enlarge scope of delivery of product does not create second or separate scheme. Techreations, Inc. v National Safety
Council (1986, ND Ill) 650 F Supp 337.
Professional corporation's RICO claims against copier service must be dismissed, where corporation alleges service
sold it 3 used copy machines as new within approximately 2 years, because obtaining money under false pretenses, although state felony, is not "racketeering activity" under 18 USCS § 1961(1), and service's bad acts do not meet continuity element of RICO "pattern" requirement. Disandro-Smith & Associates, P.C., Inc. v Edron Copier Service, Inc.
(1989, DC RI) 722 F Supp 912.
31. Drugs and narcotics
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Regular and repeated acceptance and relay of messages pertaining to drug transactions is sufficient to establish pattern of racketeering activities. United States v Webster (1982, CA4 Md) 669 F2d 185, cert den (1982) 456 US 935, 72
L Ed 2d 455, 102 S Ct 1991.
Predicate acts of racketeering charged in indictment and proven at trial, consisting of conspiracies to import and
distribute narcotics, satisfied RICO "pattern" requirement, where acts were 2 important aspects of large-scale, continuous drug enterprise, defendants planned additional narcotics ventures, and defendants even took steps toward second
venture. United States v Benevento (1987, CA2 NY) 836 F2d 60, cert den (1988) 486 US 1043, 100 L Ed 2d 620, 108 S
Ct 2035, post-conviction relief den (2000, SD NY) 81 F Supp 2d 490 and (ovrld in part by United States v Indelicato
(1989, CA2) 865 F2d 1370) and subsequent app (1992, CA2 NY) 963 F2d 1522 and (criticized in United States v
Jelinek (1995, CA8 Iowa) 57 F3d 655).
Possession of football-sized delivery of cocaine with intent to distribute, and long-term conspiracy with numerous
participants, staggering volumes of narcotics trafficking, and countless potential victims constituted RICO pattern.
United States v Echeverri (1988, CA3 NJ) 854 F2d 638, 26 Fed Rules Evid Serv 692 (criticized in United States v Kramer (1992, CA7 Ill) 955 F2d 479, 34 Fed Rules Evid Serv 1365) and (criticized in United States v Edmonds (1995, CA3
Pa) 52 F3d 1236) and (criticized in United States v Richardson (1997, CA7 Ill) 130 F3d 765, 48 Fed Rules Evid Serv
254).
Defendant's involvement in attempted murders, his possession with intent to distribute cocaine on numerous occasions, and his leadership in portion of enterprise's trade constituted pattern of racketeering activity. United States v
Darden (1995, CA8 Mo) 70 F3d 1507, 43 Fed Rules Evid Serv 321, reh den (1996, CA8 Mo) 1996 US App LEXIS 3426
and cert den (1996) 517 US 1149, 134 L Ed 2d 569, 116 S Ct 1449 and cert den (1996) 518 US 1026, 135 L Ed 2d 1084,
116 S Ct 2567.
There was sufficient evidence for jury to find that defendant knowingly participated in conspiracy to use drug proceeds to finance illegal drug activities where it was shown that defendant supplied much of money that was wired out of
state to pay for illegal drug purchases, and that these funds where used to finance purchases. United States v Eastman
(1998, CA8 Minn) 149 F3d 802.
Defendant's conviction was vacated where inadmissible testimony relating to defendant's prior murder conviction
was unfairly prejudicial to defendant on defendant's Racketeer Influenced and Corrupt Organizations Act, 18 USCS §
1961 et seq., conspiracy and drug conspiracy charges. United States v Harriston (2003, CA11 Ga) 329 F3d 779, 16
FLW Fed C 437, 16 FLW Fed C 611.
Defendant one argued that conspiracy to launder money must have "achievable" object and that jury charge's inclusion of conspiracy in list of "specified unlawful activities" constituted error of statutory interpretation; however, conspiracy to distribute or import controlled substance could constitute specified unlawful activity and money laundering
statute incorporated by reference RICO Act predicate acts defined in 18 USCS § 1961(1)(D)--conspiracies to violate
controlled substance laws, if proven, were properly chargeable as predicate acts under RICO; charge, therefore, did not
err in its description of statute; jury charge correctly stated elements of underlying substantive offense of money laundering and of conspiracy to commit that crime. United States v Awad (2007, SD NY) 518 F Supp 2d 577.
32. Embezzlement
Alleged predicate acts of embezzlement from family business, which were disjointed in time and sporadic in nature,
and posed no threat of continued criminal activity, did not constitute pattern of racketeering activity. Brode v Cohn
(1992, CA8 Ark) 966 F2d 1237, RICO Bus Disp Guide (CCH) P 8024.
Two-year practice of embezzlement constituted pattern of racketeering activity, although numerous individual acts
of embezzlement arguably comprised single criminal scheme. Graham v Slaughter (1985, ND Ill) 624 F Supp 222.
33. Extortion
RICO definition of "unlawful debt" includes collection of money due on losing wager; it is not necessary that loans
be extended to cover losses in order to facilitate continued wagering. United States v Giovanelli (1991, CA2 NY) 945
F2d 479.
Theft of the services of a subordinate do not constitute "property" under New York law, and consequently, the
predicate acts found to involve larceny by extortion do not support a RICO prosecution. United States v Delano (1995,
CA2 NY) 55 F3d 720.
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Where landowners sued county officials, alleging that their administration of zoning ordinances constituted pattern
of extortion, in violation of Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1962, summary
judgment was properly granted to officials as it had not been ruled that ordinances were illegal or unconstitutional, and
landowners explicitly waived such challenge during argument; moreover, officials' acts in enforcing zoning scheme at
issue were not inherently wrongful; one incident of allegedly mischaracterizing zoning ordinance did not constitute extortion under 18 USCS § 1951(b)(2), and, thus, there were no predicate acts, pursuant to 18 USCS § 1961, on which to
base RICO violation. Gillmor v Thomas (2007, CA10 Utah) 490 F3d 791.
RICO defendant's motion to dismiss RICO charge against him for failure to plead pattern of racketeering activity is
denied, where government alleges 2 distinct acts of extortion regarding purchase of "cut-out" records and usurious extensions of credit involving at least 7 victims, because if defendant is convicted of 2 acts alleged he will have committed
acts having "continuity plus relationship" and common purpose of furthering continuing criminal enterprise; and appropriate jury instructions and special verdict sheet should be used to indicate which predicate acts defendant is convicted
of. United States v Vastola (1987, DC NJ) 670 F Supp 1244, affd in part and revd in part (1990, CA3 NJ) 899 F2d
211, 29 Fed Rules Evid Serv 1366, vacated, remanded (1990) 497 US 1001, 111 L Ed 2d 744, 110 S Ct 3233, on remand, remanded (1990, CA3 NJ) 915 F2d 865, cert den (1991) 498 US 1120, 112 L Ed 2d 1178, 111 S Ct 1073.
Verdict will not be directed against women's center's RICO claim against anti-abortion protesters who took part in
unlawful or unauthorized entries into center's facilities, where defendants allegedly entered center and through use of
physical force removed property from offices, and on 4 other occasions defendants allegedly entered center without
permission and by their protest activities instituted fear in center's patients and employees, because evidence presented
supports potential crimes of robbery, Hobbs Act extortion under 18 USCS § 1951, and conspiracy to commit robbery or
extortion, which could constitute pattern of 18 USCS § 1961 racketeering activity sufficient to find 18 USCS §§ 1962(c)
or (d) liability. Northeast Women's Center, Inc. v McMonagle (1987, ED Pa) 670 F Supp 1300, 1988-1 CCH Trade
Cases P 68058.
Government properly alleges pattern of racketeering under 18 USCS § 1961(1)(B) in civil action, where complaint
alleges numerous separate payments in single scheme of extortion, because each payment is separate offense under 18
USCS § 1951. United States v Bonanno Organized Crime Family of La Cosa Nostra (1988, ED NY) 695 F Supp 1426.
Civil racketeering claim is not stated under 18 USCS § 1961(5), where complaint alleges repeated extortion attempts against corporation by various shareholders, because alleged extortion attempt was effectively single attempt at
extortion that fails to fulfill continuity requirement for pattern of racketeering activity. Trundy v Strumsky (1990, DC
Mass) 729 F Supp 178, vacated without op (1990, CA1 Mass) 915 F2d 1557, reported in full (1990, CA1 Mass) 1990
US App LEXIS 17612.
Civil racketeering claim is not stated under 18 USCS § 1961(5), where complaint alleges repeated extortion attempts against corporation by various shareholders, because alleged extortion attempt was effectively single attempt at
extortion that fails to fulfill continuity requirement for pattern of racketeering activity. Trundy v Strumsky (1990, DC
Mass) 729 F Supp 178, vacated without op (1990, CA1 Mass) 915 F2d 1557, reported in full (1990, CA1 Mass) 1990
US App LEXIS 17612.
Civil RICO claims brought by U.S. against sanitation companies are dismissed to extent that they are based upon
allegations of coercion, where U.S. alleged that sanitation companies committed predicate acts under RICO by violating
NY Pen Law §§ 135.60 and 135.65 by, inter alia, compelling rival garbage carters to surrender garbage stops, to refrain
from bidding on public disposal contract, and to join in bid rigging scheme, because crime of coercion under §§ 135.60
and 135.65 do not fall within genus of crime of extortion under 18 USCS § 1961(1)(A), since extortion requires compelling another to surrender property while coercion is to compel another to do or not do an act. United States v Private
Sanitation Indus. Ass'n (1992, ED NY) 793 F Supp 1114, 123 CCH LC P 10380.
Where property owner's claim under Racketeer Influenced and Corrupt Organizations Act, 18 USCS §§ 1961-1968,
was dismissed with prejudice, property owner's motion for reconsideration was denied in part because (1) property
owner raised number of arguments that had already been considered, and (2) "association-in-fact" argument was irrelevant to "pattern" element; however, leave to amend was granted. Ferluga v Eickhoff (2006, DC Kan) 236 FRD 546.
Where arrestee alleged that arrestee's infomercial contract was cancelled as result of violations 18 USCS § 1962(c)
and (d)part of Racketeer Influenced and Corrupt Organizations Act (RICO) by government officials involved in arrest,
arrestee failed to sufficiently allege pattern of racketeering activity under 18 USCS § 1961(5) because predicate acts of
parking ticket extortion scheme and discrete acts of witness intimidation were nothing more than isolated incidents in-
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volving different combinations of government officials at different times over course of more than ten years; thus, predicate acts were not sufficiently related to state RICO claim. Moore v Guesno (2007, WD NY) 485 F Supp 2d 300.
Advertiser had established genuine issue regarding proximate cause under Racketeer Influenced and Corrupt Organizations Act, 18 USCS §§ 1961-1968, where advertiser clearly had reduced change of receiving contract if indeed
advertising company had purchased ability to exclude all other bidders from process. Bulletin Displays, LLC v Regency
Outdoor Adver., Inc. (2007, CD Cal) 518 F Supp 2d 1182.
Unpublished Opinions
Unpublished: Although extortion and mail fraud are racketeering activity for purposes of RICO Act, plaintiff travel
agents had not established that act by any of defendants constituted extortion or mail fraud; airlines' threat to terminate
contract did not constitute extortion because airline had contractual right to terminate contract with travel agents without
cause at any time, and travel agents did not allege that airline sought any benefit from threat other than payment under
its interpretation of contract. Westways World Travel, Inc. v AMR Corp. (2008, CA9 Cal) 2008 US App LEXIS 1748.
34.--Financial institution fraud
Injuries claimed by bank customer, including overextension in committing to purchase property and later payment
of excessive interest, could not have been result of pattern of bank's sending monthly account statements, with result
that customer failed to establish any pattern of racketeering activity. Durante Bros. & Sons, Inc. v Flushing Nat'l Bank
(1985, CA2 NY) 755 F2d 239, cert den (1985) 473 US 906, 87 L Ed 2d 654, 105 S Ct 3530.
Investors in civil RICO action under 18 USCS § 1964 sufficiently alleged pattern of racketeering activity in claiming that lender bank and others committed several acts of mail fraud over period of several years pursuant to overall
scheme to defraud them, where fraudulent acts were distinct, some related to 2 different foreclosure sales occurring 2
years apart and others related to allegedly fraudulent statements made in connection with initial loan transactions, and
were ongoing over period of nearly 4 years. Morgan v Bank of Waukegan (1986, CA7 Ill) 804 F2d 970.
Requirement of "pattern" under RICO (18 USCS §§ 1961 et seq.) is satisfied if defendant commits two or more
predicate acts that are not isolated events, are separate in time, and are in furtherance of single criminal scheme; thus,
complaint failed to state claim against individual defendant, where presumption that corporate statements result from
collective action was inapplicable because allegedly false statements by savings and loan association, or its board of
directors, were made before individual defendant joined board, and complaint alleged only one possible predicate act by
individual defendant, namely his misstatement to plaintiff that association was good investment. Blake v Dierdorff
(1988, CA9 Cal) 856 F2d 1365, 12 FR Serv 3d 622.
Judgment was reversed because district court erroneously instructed jury that bank could be defrauded regardless of
whether its officers and employees were aware of, and participate in fraud and did not require bank to prove "reasonable
reliance" with regard to civil Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq.,
claim based on bank fraud claim; such error was not harmless because it failed to inform jury of essential element of
civil RICO action predicated on fraud. Bank of China v NBM LLC (2004, CA2 NY) 359 F3d 171, 63 Fed Rules Evid
Serv 893.
Mortgagees foreclosed upon in state court allege neither predicate acts of racketeering under 18 USCS § 1961(1)
nor pattern of racketeering activity under § 1961(5), in civil RICO action against numerous parties involved with foreclosure, including mortgagor bank, where, if anything, there is only allegation of 1 sporadic incident--bank's forgery of
letter of direction to trustee to place second mortgage on mortgagees' property to secure debt already owed by mortgagees to bank--with no specific allegations to establish mail and wire fraud. Henry v Farmer City State Bank (1985, CD
Ill) 651 F Supp 17.
Creditor's claim for recovery under RICO will be dismissed for failure to establish pattern of racketeering because
defendant bank's allegedly fraudulent inducement of creditor to finance one of bank's failing debtors through several
telephone and mail communications over two-month period amount to only one set of negotiations and fail to add continuous character to scheme. Temporaries, Inc. v Maryland Nat'l Bank (1986, DC Md) 638 F Supp 118.
Allegations by limited partnership that savings and loan association violated RICO when it foreclosed on property
on which it held priority lien, purchased it at auction, and resold it 7 days later fail to establish pattern requirement because activities of association are isolated or sporadic and not significant enough to constitute threat of continuing rack-
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eteering activity or involvement of organized criminal enterprise. Meadow Ltd. Partnership v Heritage Sav. & Loan
Asso. (1986, ED Va) 639 F Supp 643, 8 FR Serv 3d 735.
No pattern of racketeering activity is alleged where Jamaican government-owned bank used United States mail on
two occasions to defraud corporation and one of those communications was letter to Eximbank, because communication
to Eximbank is protected by sovereign immunity, leaving only one fraudulent act and thus no pattern of racketeering.
Chisholm & Co. v Bank of Jamaica (1986, SD Fla) 643 F Supp 1393.
Savings association presented sufficient evidence of pattern of racketeering to withstand motion for summary
judgment, where plaintiffs alleged officers and directors of savings association with whom plaintiffs merged had committed 15 predicate acts of mail fraud concerning nationwide loans which occurred over course of year, with two separate recipients and two potential criminal episodes. Citizens Sav. Asso. v Franciscus (1986, MD Pa) 656 F Supp 153.
Allegation that mortgage broker in RICO action committed mail fraud satisfies RICO requirement to allege pattern
of racketeering activity where each mailing constitutes separate offense under 18 USCS § 1341; complaint indicating
that plaintiffs were defrauded in single loan transaction which also alleged that broker had defrauded other loan applicants in same kind of transaction satisfies continuity and relationship aspects of pattern requirement. Ferleger v First
American Mortg. Co. (1987, ND Ill) 662 F Supp 584.
Bank customers adequately plead "pattern of racketeering activity" in their RICO action against bank where they
alleged series of similar yet independently motivated crimes perpetrated on different victims over course of several
years. Bachmeier v Bank of Ravenswood (1987, ND Ill) 663 F Supp 1207, CCH Fed Secur L Rep P 93744.
Repeated issuance of nine series of manufactured home loan bonds, each involving alleged misrepresentations and
omissions, constituted repeated infliction of economic harm to set forth pattern of racketeering activity under 18 USCS
§§ 1961 et seq. First Financial Sav. Bank, Inc. v American Bankers Ins. Co. (1988, ED NC) 699 F Supp 1167.
Pattern of racketeering activity is properly alleged under 18 USCS § 1961(5), where complaint alleges mortgage
company defrauded separate parties under common scheme. Developer's Mortg. Co. v Transohio Sav. Bank (1989, SD
Ohio) 706 F Supp 570, CCH Fed Secur L Rep P 94784.
Unpublished Opinions
Unpublished: Debtor's claim that extortion, as defined in O.C.G.A. § 16-8-16, had been committed by bank and its
director and was therefore predicate act for purposes of debtor's civil Racketeer Influenced and Corrupt Organizations
Act claims, was without merit where debtor admitted that bank's foreclosure on some of his property was prompted by
his failure to repay loans taken out for that property, and as such, foreclosure was lawful. Tucker v Morris State Bank
(2005, CA11 Ga) 154 Fed Appx 183.
35.--Single scheme
Complaint by savings and loan association against its former president sufficiently alleged pattern of racketeering
activity for RICO purposes; predicate acts of mail fraud in sending 4 letters to third parties over 5-month period met
continuity requirement, although only single scheme was involved through which president allegedly received numerous kickbacks and concealed practice from his employer, since predicate acts were continuous and not isolated or sporadic, and relationship requirement was met because all letters written by president were part of scheme that victimized
savings and loan and enriched president. Sun Sav. & Loan Ass'n v Dierdorff (1987, CA9 Cal) 825 F2d 187, 8 FR Serv
3d 808.
Alleged acts of mail fraud by investment advisor whereby advisor, on 2 occasions 4 months apart, caused monthly
bank statements and canceled checks from 2 of victim's bank accounts to be mailed to advisor's address were sufficient
to constitute "pattern" for purposes of "pattern of racketeering activity" requirement for civil RICO action; 2 acts were
designed to defraud victim twice by concealing advisor's conversion of her funds from 2 separate bank accounts, acts
showed necessary continuity, yet were sufficiently separate in time to constitute separate transactions, and while both
acts were part of same scheme to defraud, mere fact that predicate acts relate to same overall scheme or involve same
victim does not mean that acts automatically fail to satisfy pattern requirement. Appley v West (1987, CA7 Ill) 832 F2d
1021, 4 UCCRS2d 1495 (ovrld in part as stated in CIB Bank v Esmail (2004, ND Ill) 2004 US Dist LEXIS 26817).
Proof of only single injury, single victim, and single short-lived scheme does not satisfy requirement of "pattern of
racketeering activity" under 18 USCS § 1962(c); thus, allegation that defendant bank engaged in loan negotiations and
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18 USCS § 1961
filed petition, without notice, disavowing these negotiations does not describe pattern of racketeering activity by bank
under RICO. Paradise Hotel Corp. v Bank of Nova Scotia (1988, CA3 VI) 842 F2d 47, 17 BCD 599, 18 CBC2d 838,
CCH Bankr L Rptr P 72241.
No RICO pattern was established where facts alleged showed only one general scheme taking several months to
complete, concerned one major transaction (a loan), had 4 potential victims, one distinct injury (wrongful conversion of
loan proceeds), and threatened no repeated harm; furthermore, "cover-up" of wrongful conversion does not place conduct outside single-transaction characterization since such treatment could turn every transaction into "multiple scheme"
if defendant denies wrongdoing. Jones v Lampe (1988, CA7 Ill) 845 F2d 755.
Single illegal scheme can constitute "pattern of racketeering activity" under RICO, so long as racketeering acts
meet "continuity plus relationship" requirement; thus, indictment sufficiently alleged RICO pattern, where all 3 defendants solicited kickbacks in exchange for help in obtaining 20 million dollar investment for mortgage company, one
defendant "repeatedly" sought kickbacks, defendants' actions evidenced attempt to hide details of investment from new
trustees, scheme allegedly began in March of 1982 and continued until defendants were indicted in September of 1985,
investment contract provided for 30 year investment, indicating that scheme was open-ended, victims of scheme included all members of pension fund who relied on defendants to invest wisely, defendants' acts were for purpose of obtaining influence in exercising their powers over pension plan funds, and acts all involved one particular investment.
United States v Zauber (1988, CA3 NJ) 857 F2d 137, cert den (1989) 489 US 1066, 103 L Ed 2d 810, 109 S Ct 1340
and (superseded by statute as stated in United States v Little (1989, CA5 Miss) 889 F2d 1367) and (superseded by statute as stated in United States v Shyres (1990, CA8 Mo) 898 F2d 647).
Mortgagors foreclosed upon in state court allege neither predicate acts of racketeering under 18 USCS § 1961(1)
nor pattern of racketeering activity under § 1961(5), in civil RICO action against numerous parties involved with foreclosure, including mortgagee bank, where, if anything, there is only allegation of 1 sporadic incident--bank's forgery of
letter of direction to trustee to place second mortgage on mortgagors' property to secure debt already owed by mortgagors to bank--with no specific allegations to establish mail and wire fraud. Henry v Farmer City State Bank (1985, CD
Ill) 651 F Supp 17.
No "pattern of racketeering activity" took place in action brought by one bank against another bank and official of
that bank where alleged acts of bank and official which allegedly induced other bank to become primary lender to laboratory business only comprised one scheme and no predicate acts beyond single scheme were alleged. Maryland
Nat'l Bank v Dauphin Deposit Bank & Trust Co. (1986, MD Pa) 647 F Supp 908.
Savings and loan association's RICO claim is dismissed where association asserts bank made several independent
decisions to conceal deceitfully different material existing facts in order to lull association into advancing funds in reliance on collateral bank was claiming for itself, because all racketeering acts complained of arise from single financing
arrangement for single construction project and thus fail to allege "pattern" of racketeering activity. Jackson County
Federal Sav. & Loan Asso. v Maduff Mortg. Corp. (1986, DC Colo) 649 F Supp 6.
RICO action by retirement trust against bank for fraud arising out of series of transactions resulting in loss by trust
of collateral security loan will not be dismissed, where predicate acts included alleged use of mails to transmit fraudulent inducements and misleading representations and to secure lien releases, because variety of predicate acts over sufficiently long period of time resulting in distinct injuries establishes pattern, notwithstanding fact that pattern involved
single victim and single scheme. Ringtown Wilbert Vault Works v Schuylkill Memorial Park, Inc. (1986, ED Pa) 650 F
Supp 823, 1987-1 CCH Trade Cases P 67454.
Depositors' RICO claims against state savings-share insurance company are dismissed where allegations that company falsely portrayed security of savings and loan show negligent failure to oversee savings and loan association and
only one possible fraudulent scheme, thus lacking requisite continuity for RICO claims, and thus alleging only ordinary
state fraud claim. Brandenburg v First Maryland Sav. & Loan, Inc. (1987, DC Md) 660 F Supp 717, affd (1988, CA4
Md) 859 F2d 1179 (criticized in System Mgmt., Inc. v Loiselle (2000, DC Mass) 91 F Supp 2d 401, RICO Bus Disp
Guide (CCH) P 9859) and (criticized in System Mgmt., Inc. v Loiselle (2000, DC Mass) 112 F Supp 2d 112).
Allegations that bank committed extortion and mail fraud do not amount to "pattern of racketeering activity" because single, limited scheme does not have criminal dimension and degree necessary for RICO action. Iden v Adrian
Buckhannon Bank (1987, ND W Va) 661 F Supp 234, affd in part without op and vacated in part without op (1988, CA4
W Va) 841 F2d 1122.
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RICO claim brought by commercial borrower and guarantors against lender must be summarily denied, where
complaint alleges numerous instances of mail fraud and wire fraud carried out during 3-year period but all with respect
to single credit transaction, because predicate acts alleged do not constitute "pattern of racketeering activity." Standard
Wire & Cable Co. v Ameritrust Corp. (1988, CD Cal) 697 F Supp 368.
Civil racketeering claim is properly alleged under 18 USCS § 1961(5), where complaint alleges numerous and
nonsporadic acts of mail and wire fraud in connection with single 6-year scheme to defraud bank depositors, because
pattern of racketeering activity is alleged. Banco de Desarrollo Agropecuario, S.A. v Gibbs (1989, SD NY) 704 F Supp
515.
Civil racketeering complaint which alleges that savings and loan association coerced sale of apartment complex is
insufficient, because facts relate to only single scheme, transaction, victim, and distinct injury rather than threat of repeated harm; thus, "pattern of racketeering activity" is not alleged. Orchard Hills Cooperative Apartments, Inc. v
Germania Federal Sav. & Loan Asso. (1989, CD Ill) 720 F Supp 127.
Where property owner alleged that city officials engaged in common scheme to force owners to sell their property
which would be acquired for development, Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS §
1961 et seq., claim was dismissed because allegations of single scheme to accomplish discrete goal of assembling land
for development did not assert pattern of racketeering activity, and complaint did not allege that certain defendants participated in alleged RICO conduct. Ferluga v Eickhoff (2006, DC Kan) 408 F Supp 2d 1153.
36. Gambling
Evidence sufficiently established "pattern of racketeering activity" to support defendant's RICO conspiracy conviction, where defendant was associated with series of rigged card games, his agreement to participate in which was inferable from his acts in introducing potential victims to other scheme participants who induced them to play in rigged
games, and defendant conspired to commit two acts of conspiracy in violation of state gambling laws. United States v
Joseph (1987, CA6 Mich) 835 F2d 1149.
Violations of Interstate Horseracing Act by "display track" in taking wagers on racetrack situated within 60 miles
of display track does not constitute pattern of racketeering activity. Sterling Suffolk Racecourse Ltd. Partnership v
Burrillville Racing Ass'n (1993, CA1 RI) 989 F2d 1266, RICO Bus Disp Guide (CCH) P 8258, cert den (1993) 510 US
1024, 126 L Ed 2d 593, 114 S Ct 634, 14 RILW 665.
Where plaintiffs, several charities and gaming entity, alleged 18 USCS §§ 1961(4), 1962(c), RICO violations by
defendants, bingo parlor and its president, in securing monopoly on bingo gaming in county, under Fed. R. Civ. P.
26(b)(1), documents on defendants' involvement in securing Ala. Const. amend. 744, which allowed bingo in county,
were relevant. Hope for Families & Cmty. Serv. v Warren (2008, MD Ala) 250 FRD 653.
37. Insurance
In suit against health insurer and hospital in which beneficiaries of group health insurance policies issued by insurer
in particular state asserted that insurer and hospital had engaged in fraudulent insurance scheme that allegedly violated
Racketeer Influenced and Corrupt Organizations Act (RICO) (18 USCS §§ 1961 et seq.), which did not proscribe conduct that state insurance laws permitted, McCarran-Ferguson Act's § 2(b) (15 USCS § 1012(b))--which provided that no
federal statute be construed to invalidate, impair, or supersede any state law enacted for purpose of regulating business
of insurance unless federal statute specifically related to business of insurance--did not block RICO's application, because even though RICO did not specifically relate to business of insurance, (1) RICO's application to case would neither invalidate nor supersede state law; and (2) RICO, in proscribing same conduct as, but providing materially different
remedies from, state laws, did not impair state laws under § 2(b). Humana Inc. v Forsyth (1999) 525 US 299, 142 L Ed
2d 753, 119 S Ct 710, 99 CDOS 516, 99 Daily Journal DAR 585, 22 EBC 2201, RICO Bus Disp Guide (CCH) P 9631,
1999 Colo J C A R 379.
Predicate acts of mail fraud allegedly committed by automobile liability insurer and its attorney over period of several years pursuant to overall scheme to defraud insureds, relating to insurer's failure to settle one claim under one uninsured motorist policy and arising from one accident, were insufficiently distinct to establish continuity aspect of required pattern of racketeering activity. Elliott v Chicago Motor Club Ins. (1986, CA7 Ill) 809 F2d 347.
Complaint failed to allege pattern of racketeering activity for purposes of civil RICO action, where multiple predicate acts relating to allegedly fraudulent scheme to induce employee to settle workers' compensation claim involved
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18 USCS § 1961
single victim, inflicted single injury, and occurred within 2 month period. Tellis v United States Fidelity & Guaranty
Co. (1987, CA7 Ill) 826 F2d 477.
Alleged scheme by insured involving mailing of false statements of value of insured's goods and false proof of loss
did not constitute pattern of racketeering activity for purposes of civil RICO action, where there was nothing to indicate
threat of continuing criminal activity beyond goal of inducing insurer to pay fraudulent insurance claim; insured's arson
would merely supply evidence of additional predicate act, not evidence of threat of continuing criminal activity, and
even if prior insurer was initial target of insurance fraud, pattern of racketeering activity was not shown merely because
identity of insurer was changed during course of alleged scheme, where scheme had only one target, insurer of insured's
goods, and one finite goal, inducing that insurer to pay fraudulent claim. Albany Ins. Co. v Esses (1987, CA2 NY) 831
F2d 41 (ovrld in part on other grounds by United States v Indelicato (1989, CA2) 865 F2d 1370) and (ovrld as stated in
Advanced Magnetics v Bayfront Partners (1994, SD NY) CCH Fed Secur L Rep P 98343) and (ovrld as stated in Jenkins v Sea-Land Serv. (1994, SD NY) 1994 US Dist LEXIS 11477).
Insurer sufficiently alleged RICO pattern involving fraudulent billings by chiropractor, since each false claim involved separate and distinct insured and was complete in itself, each claim involved one mailing, and claims were submitted over open-ended protracted period. Blue Cross & Blue Shield v Kamin (1989, CA6 Mich) 876 F2d 543.
Alleged practices of defendant in overcharging premiums and not reducing co-payments was "business of insurance" for purpose of preemption by McCarran-Ferguson Act. Forsyth v Humana, Inc. (1997, CA9 Nev) 114 F3d 1467,
97 CDOS 3865, 97 Daily Journal DAR 6578, 1997-1 CCH Trade Cases P 71818, cert den (1997) 522 US 996, 139 L Ed
2d 401, 118 S Ct 559, 21 EBC 2376 and affd (1999) 525 US 299, 142 L Ed 2d 753, 119 S Ct 710, 99 CDOS 516, 99
Daily Journal DAR 585, 22 EBC 2201, RICO Bus Disp Guide (CCH) P 9631, 1999 Colo J C A R 379.
Where plaintiff former employee appealed from interlocutory order granting defendant insurers' converted motion
for summary judgment, finding ERISA governed disability insurance plan, but denied insurer's motion to dismiss employee's Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS §§ 1961 et seq., claim, finding that
insurers had presented no legal authority that allowing employee to proceed under RICO would frustrate exclusive remedial scheme Congress devised for ERISA claims, and insurers appealed denial of motion to dismiss RICO claims,
appellate court refused to entertain issue under 28 USCS § 1292(b); district court had refused to certify that issue for
appeal when it certified ERISA issue for appeal, and district court was to be given chance to address issue in first instance and insurers for first time requested, in event that district court certified ERISA governance question for appeal,
that district court also certify RICO question. Moorman v Unum Provident Corp. (2006, CA11 Ga) 464 F3d 1260, 38
EBC 2537, 19 FLW Fed C 1059.
Insurer's annual mailing of billing statements and policy renewals to RICO plaintiff does not constitute requisite
"pattern of racketeering activity" for RICO violation, but instead is ministerial act performed in execution of single unified transaction in which plaintiff obtained insurance coverage. Wright v Everett Cash Mut. Ins. Co. (1986, WD Pa)
637 F Supp 155.
Corporation's RICO claims against its insurance company over handling of claims under fire policy are dismissed
because policy dispute consists of single isolated event and is not sufficient to show pattern of racketeering. Rich Maid
Kitchens, Inc. v Pennsylvania Lumbermens Mut. Ins. Co. (1986, ED Pa) 641 F Supp 297, affd without op (1987, CA3
Pa) 833 F2d 307 and affd without op (1987, CA3 Pa) 833 F2d 307 and affd without op (1987, CA3 Pa) 833 F2d 307.
Insured's RICO claim is dismissed for failure to establish two predicate acts of racketeering activity as required by
18 USCS § 1961(5), where insured unsuccessfully attempted to characterize insurer's deplorable conduct in settling insurance claim as bribery, mail fraud and wire fraud. Lexington Ins. Co. v Bennett Evans Grain Co. (1986, SD Tex) 642
F Supp 78.
Insured's RICO claim is dismissed for failure to state pattern of racketeering activity where complaint alleged insured committed mail fraud by sending two letters, both denying claim, within 6-week period, because two letters are
not sufficiently differentiated to establish pattern and mailings did not occur over substantial period of time.
Grabowski v Agricultural Ins. Co. (1986, ED Pa) 646 F Supp 841.
State commissioner of insurance sufficiently alleged pattern of racketeering activity against defendants who purportedly defrauded insurance company, causing it to become insolvent, where multiple acts of mail fraud in several jurisdictions were set forth in complaint, detailing defendants' misrepresentations in efforts to obtain risky insurance at
unreasonably low rates. North Carolina ex rel. Long v Alexander & Alexander Services, Inc. (1988, ED NC) 680 F
Supp 746.
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Attorney who pled guilty to 4 counts of mail fraud under 18 USCS § 1341, over 2-year period against 3 insurance
companies, has demonstrated pattern of racketeering activity for purposes of civil RICO claim against him for participating in fraudulent automobile accident insurance scheme, where plaintiff insurance company was victim of only one
mail fraud, because acts necessary to state RICO violation need not all injure same plaintiff for acts to fulfill pattern
requirement. State Farm Mut. Auto. Ins. Co. v Rosenfield (1988, ED Pa) 683 F Supp 106.
Chiropractor alleges pattern of racketeering activity by insurer under 18 USCS § 1961(5), where complaint alleges
ongoing fraud through insurer's denial of claims involving chiropractor's fees, because each claims denial was distinct
occurrence and scheme was ongoing. Bumgarner v Blue Cross & Blue Shield, Inc. (1988, DC Kan) 716 F Supp 493.
RICO claim of insurer against trucking firm, alleging intentional misrepresentation of facts in application for insurance, is not dismissed, where complaint alleges that to secure lower premiums, defendants agreed to conceal existence of leased vehicles from insurer and knowingly submitted information containing false representations, and continued fraud during life of policy and in securing other policies, because allegations show threat of repetition of fraud and
sufficiently allege open-ended continuity of predicate acts sufficient to allege pattern of racketeering activity. Seneca
Ins. Co. v Commercial Transp. (1995, MD Pa) 906 F Supp 239, RICO Bus Disp Guide (CCH) P 8996.
Defendant's alleged fraud against insurer in filing false claim of theft of personal property was not related to alleged
predicate act of fraud and obstruction of justice for defendant's misrepresentations to bankruptcy trustee, and acts thus
did not constitute pattern of racketeering activity for purposes of 18 USCS §§ 1961 and 1962, where insurer, not plaintiff, was victim of alleged fraud, and purpose of alleged fraud was to obtain fraudulent insurance payment, not to prevent plaintiff from collecting on debt. James v McCoy (1998, SD Ohio) 56 F Supp 2d 919.
Where indictment charged defendant under 18 USCS § 1962(c), alleging that defendant devised and participated in
scheme to defraud to obtain monies from defendant's insurance agency trust account, it sufficiently alleged pattern of
racketeering activity; defendant conceded that predicate acts satisfied relationship test, but argued that predicate acts of
mail and wire fraud did not satisfy continuity test, but court found that continuity test was satisfied, as 16 enumerated
acts were sufficient in quantity, acts occurred during seven-year period, single scheme alleged was sufficient, and victims of scheme suffered harm. United States v Segal (2003, ND Ill) 248 F Supp 2d 786.
Defamation damages under state law were not independently recoverable under claim under Racketeer Influenced
and Corrupt Organizations Act (RICO), 18 USCS §§ 1961, 1962; therefore, trebling damages provisions of RICO did
not apply. Anglo-Iberia Underwriting Mgmt. Co. v Lodderhose (2003, SD NY) 282 F Supp 2d 126, amd, on reconsideration (2003, SD NY) 282 F Supp 2d 126.
38. Labor
Allegations satisfied "pattern" requirement, where charges alleged multiple solicitations, agreements to receive, and
receipt of kickbacks in exchange for pension fund investment; furthermore, individual defendants need not personally
commit each racketeering act; they need only agree to commit it for purposes of RICO conspiracy. United States v
Zauber (1988, CA3 NJ) 857 F2d 137, cert den (1989) 489 US 1066, 103 L Ed 2d 810, 109 S Ct 1340 and (superseded by
statute as stated in United States v Little (1989, CA5 Miss) 889 F2d 1367) and (superseded by statute as stated in United
States v Shyres (1990, CA8 Mo) 898 F2d 647).
Two separate attempts to decertify union through bribery constitute 2 predicate acts of bribery as separate and independent wrongs sufficient to establish pattern of racketeering under RICO, where acts were separate in time, and involved different individual employees, despite fact that they may be part of single general purpose to get rid of union;
accordingly, District Court improperly dismissed union's RICO claims by holding that alleged racketeering activity occurred in course of single illegal scheme and that pattern of racketeering was not properly alleged. Hospital Employees' Div. of Local 79 v Mercy-Memorial Hosp. Corp. (1988, CA6 Mich) 862 F2d 606, 130 BNA LRRM 2022, 110 CCH
LC P 10855, vacated, remanded (1989) 492 US 914, 106 L Ed 2d 584, 109 S Ct 3236, 131 BNA LRRM 3072, 112 CCH
LC P 11266.
Requirement of "pattern" of racketeering activity embraces criminal acts having same or similar purposes, results,
participants, victims, or methods of commission and which are not isolated acts; thus, claim that local union and its
business agent engaged in acts of vandalism and intimidation during specific time period in pursuit of unitary goal is
sufficient to meet statutory "pattern" requirement. Yellow Bus Lines v Drivers, Chauffeurs & Helpers Local Union 639
(1988, App DC) 268 US App DC 103, 839 F2d 782, 127 BNA LRRM 2607, 108 CCH LC P 10311, 10 FR Serv 3d 423,
reh den, en banc (1988, App DC) 108 CCH LC P 10439 and cert den (1988) 488 US 926, 102 L Ed 2d 328, 109 S Ct
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309, 129 BNA LRRM 2672, 110 CCH LC P 10836 and vacated, remanded (1989) 492 US 914, 106 L Ed 2d 583, 109 S
Ct 3235, 131 BNA LRRM 3072, 132 BNA LRRM 2160, 112 CCH LC P 11265.
Indictment sufficiently alleges pattern of racketeering activity where members of organized crime group allegedly
engaged in illegal payments and receipt of payments in violation of labor laws over long period of time and where, although only one kind of criminal conduct is alleged to have occurred, there are repeated instances of extortion of money
from employers and receipt of money from employer. United States v Di Gilio (1987, DC NJ) 667 F Supp 191, 127
BNA LRRM 2084, 108 CCH LC P 10427.
Mining corporation sufficiently alleged pattern of racketeering activity and enterprise elements in RICO claim
against union where complaint set forth multiple acts of violence over 10-year period for purpose of forcing mine owners to accede to union demands and to prevent legitimate organizing activity in favor of intimidation and coercion of
employers and employees, and where complaint stated that pickets at particular mine constitute enterprise and that operation and distribution of union strike fund is enterprise. MHC, Inc. v International Union, United Mine Workers
(1988, ED Ky) 685 F Supp 1370, 127 BNA LRRM 3096, 113 CCH LC P 11773.
Pension plan participants may not amend ERISA case to add RICO claims, where participants complain that defendant corporation purchased pension plan in 9/85, terminated it in 10/86, and unjustly distributed it (keeping large
common surplus) by 1/88, because proposed claims assert completed scheme of short duration, and fail to set forth
proof of continued or threatened criminal activity required to show pattern of racketeering activity. Hutchinson v
Wickes Cos. (1989, ND Ga) 726 F Supp 1315.
Employer who filed RICO action against building trades council and its individual members failed to show pattern
of continuous and related activity, where complaint alleged only two picketing incidents that occurred four years apart
at two separate locations, and each incident took place during one day. Esposito Hauling & Contracting Co. v Building
& Constr. Trades Council (1993, DC Del) 144 BNA LRRM 2991.
Where plaintiff workers' claimed defendant off-shore drilling labor suppliers had violated immigration laws thousands of times through their illegal worker hiring scheme and alleged suppliers had widespread scheme of knowingly
hiring and harboring illegal aliens for purpose and direct result of depressing wages, sufficiently direct relation between
workers' claimed injury and alleged Racketeer Influenced and Corrupt Organizations Act violations under 18 USCS §
1961(1)(F) had been pleaded for purposes of standing under 18 USCS § 1964(c) and causation under 8 USCS § 1324a.
Cunningham v Offshore Specialty Fabrications, Inc. (2008, ED Tex) 543 F Supp 2d 614 (criticized in Hager v ABX Air,
Inc. (2008, SD Ohio) 2008 US Dist LEXIS 23486).
Summary judgment was granted on RICO claims based on alleged violations of 8 USCS § 1324(a)(1)(A)(iii),
(a)(3)(A) because employees failed to show that employer had at least 10 illegal aliens employed at each of its facilities,
and that defendants had actual knowledge that each facility employed at least 10 individuals who were unauthorized to
work in U.S. and were brought into country for purposes of illegal employment. Trollinger v Tyson Foods, Inc. (2008,
ED Tenn) 543 F Supp 2d 842 (criticized in Hager v ABX Air, Inc. (2008, SD Ohio) 2008 US Dist LEXIS 23486).
39. Mail or wire fraud, generally
Plaintiff asserting claim under Racketeer Influenced and Corrupt Organizations Act, 18 USCS §§ 1961 et seq.,
predicated on mail fraud need not show, either as element of its claim or as prerequisite to establishing proximate causation, that it relied on defendant's alleged misrepresentations. Bridge v Phoenix Bond & Indem. Co. (2008, US) 128 S Ct
2131, 170 L Ed 2d 1012, 21 FLW Fed S 295.
Where bidders for county tax liens alleged that competitors violated Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS §§ 1961 et seq., by making misrepresentations in certifications to county, and that claim
was predicated on mail fraud based on mailed notices to property owners, bidders were not required to allege, either as
element of their claim or as prerequisite to establishing proximate causation, that bidders relied on competitors' alleged
misrepresentations, and reliance by county was sufficient to support claim. Bridge v Phoenix Bond & Indem. Co. (2008,
US) 128 S Ct 2131, 170 L Ed 2d 1012, 21 FLW Fed S 295.
Where defendant committed five separate acts of mail fraud, defendant had engaged in five acts of "racketeering
activity" as defined in 18 USCS § 1961(1)(B); consequently, defendant engaged in "pattern of racketeering activity"
within meaning of 18 USCS § 1962(c) because defendant committed two or more acts of "racketeering activity".
United States v Weatherspoon (1978, CA7 Ill) 581 F2d 595 (criticized in Truck Ins. Exch. v Kafka (1995, ND Ill) RICO
Bus Disp Guide (CCH) P 8873).
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Two related acts of mail fraud may be sufficient to establish pattern of racketeering activity. R.A.G.S. Couture,
Inc. v Hyatt (1985, CA5 La) 774 F2d 1350 (criticized in Smith v Cooper/T. Smith Corp. (1989, CA5 La) 886 F2d 755)
and (criticized in Strain v Kaufman County Dist. Attorney's Office (1998, ND Tex) 23 F Supp 2d 685).
To establish "pattern of racketeering activity," 18 USCS 1961(5) requires showing of at least two acts of racketeering activity, one of which occurred after effective date of 18 USCS §§ 1961 et seq., which was Oct. 15, 1970, and last of
which occurred within ten years after commission of prior act of racketeering activity; evidence presented at trial to
support defendant's conviction on four separate counts of mail fraud in violation of 18 USCS 1341, committed between
1978 and 1979, was sufficient to establish "pattern of racketeering activity" as defined by 18 USCS § 1961(5). United
States v Garver (1987, CA7 Ind) 809 F2d 1291, 22 Fed Rules Evid Serv 464.
Evidence that defendant engaged in at least 13 acts of fraud, which were clearly related, and had similar purposes,
results, participants, victims, and methods of commission, established pattern of racketeering activity for purposes of
civil RICO action. TeleVideo Systems, Inc. v Heidenthal (1987, CA9 Cal) 826 F2d 915, 8 FR Serv 3d 989.
Absent basis for inferring threat of ongoing illegal conduct, complaint alleging merely that defendant engaged in
common law fraud and deceit, and used mails and wires more than twice in course of their conduct, failed adequately to
state pattern of racketeering activity for purposes of civil RICO action. Condict v Condict (1987, CA10 Wyo) 826 F2d
923.
Investors' allegations of fraudulent sales by wire and mail of over 55,000 lifetime partnerships in religious enterprise were sufficient to make out RICO pattern. Combs v Bakker (1989, CA4 NC) 886 F2d 673.
Because mail fraud under 18 USCS § 1341 was listed as "racketeering activity" in 18 USCS § 1961(1)(B), part of
Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1961 et seq., financier sufficiently alleged that insurance agency, vice president, and contractors' racketeering pattern of mail fraud proximately caused his injury. Baisch v
Gallina (2003, CA2 NY) 346 F3d 366.
Compulsive gambler's claim under Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961
et seq., which was based upon allegation of mail fraud against casino, was frivolous, and court did not find gambler's
argument to be extension or modification of existing law or establishment of new law according to Fed. R. Civ. P.
11(b)(2); RICO claims were alleged solely to invoke jurisdiction of federal courts, and his lawsuit was dismissed for
want of subject-matter jurisdiction. Williams v Aztar Ind. Gaming Corp. (2003, CA7 Ind) 351 F3d 294.
Where steel company asserted that its lost sales were proximately caused by supplier's pattern of offering customers
lower bottom-line cost by means of unlawful omission of state sales tax and by concealing those omissions by means of
mail and wire fraud, complaint contained allegations of facts sufficient to show that supplier engaged in pattern of
fraudulent conduct that was within definition of racketeering activity set forth in 18 USCS § 1961, part of Racketeer
Influenced and Corrupt Organizations Act's (RICO), as conduct that was intended to and did give supplier competitive
advantage over steel company; thus, remand was required because complaint adequately plead proximate cause, and
steel company had standing to pursue civil RICO claim. Ideal Steel Supply Corp. v Anza (2004, CA2 NY) 373 F3d 251.
Jury reasonably concluded that telecommunications provider's actions in collecting charges for telephone gambling
on its long distance bills amounted to collection of unlawful debts in violation of RICO, 18 USCS § 1961. Kemp v
AT&T (2004, CA11 Ga) 393 F3d 1354, 18 FLW Fed C 130.
District court's refusal to give jury instruction on elements of mail fraud was not error because defendant was not
charged with mail fraud and mail fraud did not have to be proven to convict him of conspiring to launder money under
18 USCS § 1956(a)(1), (h); conviction was affirmed because 18 USCS § 1956(c)(7)(A) defined "specified unlawful activity" to encompass numerous federal crimes, including all of those set forth in 18 USCS § 1961(1), which listed "racketeering activities" under Racketeer Influenced & Corrupt Organizations statute; for purposes of defendant's trial, it was
sufficient that indictment alleged "specified unlawful activity" of mail fraud, in violation of 18 USCS § 1341, and that
mail fraud was listed as "racketeering activity" in 18 USCS 1961(1). United States v Martinelli (2006, CA11 Fla) 454
F3d 1300, 19 FLW Fed C 756.
In ancillary tort suit in Securities and Exchange Commission suit against appellees, viatical settlement companies
and their receiver, where appellant insurers appealed dismissal of their Racketeer Influenced and Corrupt Organizations
Act claims based on two predicate acts of mail fraud, dismissal was affirmed because insurers did not allege that viatical
settlement companies made any affirmative misrepresentations in their mailings, and rather, it seemed to suggest that
companies engaged in scheme to defraud insurer because they failed to disclose what they learned in process of acquir-
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ing insured's policy, but nondisclosure of material information could constitute violation of mail and wire fraud statutes
where defendant had duty to disclose either by statute or otherwise and insurers had not alleged that companies had duty
to disclose. Am. United Life Ins. Co. v Martinez (2007, CA11 Fla) 480 F3d 1043.
Where defendant argued district court should not have forfeited proceeds of his mail fraud because fraud did not
"affect financial institution," citing 18 USCS § 982(a)(2)(A), argument was frivolous because he was not charged under
that statute, but rather, forfeiture was sought based on 28 USCS § 2461 and 18 USCS § 981(a)(1)(C), which authorized
forfeiture of proceeds from "specified unlawful activity," including mail fraud, and contained no requirement about "affecting financial institution," and in connection with defendant's money laundering conviction under 18 USCS § 1957,
18 USCS § 1956(c)(7) defined "specified unlawful activity" and incorporated offenses listed in 18 USCS § 1961(1),
which included mail fraud. United States v Foley (2007, CA11 Fla) 508 F3d 627, 21 FLW Fed C 219.
RICO claims premised on mail or wire fraud must be particularly scrutinized because of relative ease with which
plaintiff may mold RICO pattern from allegations that, upon closer scrutiny, do not support it. Western Assocs. Ltd.
Pshp. v Market Square Assocs. (2001, App DC) 344 US App DC 257, 235 F3d 629, RICO Bus Disp Guide (CCH) P
9990.
Plaintiff's conclusory pleading insufficiently alleges pattern of racketeering when plaintiff alleges that defendants'
activities amount to pattern of racketeering as defined and prohibited by RICO where alleged racketeering activity is
mail fraud, which must be pleaded with particularity. Barker v Underwriters at Lloyd's, London (1983, ED Mich) 564
F Supp 352.
Repeated acts of mail fraud or wire fraud constitute pattern of racketeering activity under 18 USCS § 1961. Eisenberg v Gagnon (1983, ED Pa) 564 F Supp 1347, CCH Fed Secur L Rep P 99475, vacated, in part on other grounds,
revd, in part, affd, in part (1985, CA3 Pa) 766 F2d 770, CCH Fed Secur L Rep P 92202, 18 Fed Rules Evid Serv 783, 2
FR Serv 3d 980, cert den (1985) 474 US 946, 88 L Ed 2d 290, 106 S Ct 342, 106 S Ct 343 and (criticized in Rothwell v
Chubb Life Ins. Co. of Am. (1998, DC NH) 191 FRD 25).
Allegations that defendant employed United States postal service mail and communications by wire 2 or more
times thereby violating 18 USCS §§ 1341, 1343 adequately state pattern of racketeering activity. Ross v Omnibusch,
Inc. (1984, WD Mich) 607 F Supp 835.
Pattern of racketeering activity is sufficiently alleged by allegations that on 2 or more occasions defendants used
mails and wires in conducting enterprise involved in fraudulent scheme. Systems Research, Inc. v Random, Inc. (1985,
ND Ill) 614 F Supp 494, 2 FR Serv 3d 1388.
Allegations of multiple wire or telephone communications made in furtherance of scheme to disseminate false and
misleading information regarding condition of bank do not establish pattern of racketeering enterprise, as required to
state civil RICO cause of action. Professional Assets Management, Inc. v Penn Square Bank, N.A. (1985, WD Okla)
616 F Supp 1418.
Complaints of investors in lease and service agreements regarding energy conservation devices adequately allege
"pattern of racketeering activity" under 18 USCS § 1961(5) where investors allege thousands of fraudulent transactions
over course of time involving large class of investors and entailing numerous mailings of and use of telephone communications regarding agreements. In re Energy Systems Equipment Leasing Sec. Litigation (1986, ED NY) 642 F Supp
718, CCH Fed Secur L Rep P 92920.
Shareholders' RICO claim is dismissed where complaint failed to state predicate acts of mail fraud, since allegations were vague, conclusory, and gave insufficient notice to defendants, and, in any event, alleged multiple mailings as
part of one criminal activity do not constitute pattern of racketeering activity. Eisenberger v Spectex Industries, Inc.
(1986, ED NY) 644 F Supp 48, CCH Fed Secur L Rep P 93037.
Car dealership's RICO complaint does not establish pattern of racketeering activity where dealership alleged former
body shop manager defrauded dealership by 8 instances of mail fraud over 4-month period. Anton Motors, Inc. v Powers (1986, DC Md) 644 F Supp 299.
Pattern of racketeering activity is properly alleged by Vietnam veterans against mobile home manufacturers in
RICO action alleging abuse of mobile home loan guaranty provisions of Veterans Housing Act (38 USCS §§ 1801 et
seq.), where veterans' organization alleges all nonfinancial defendants and retail dealers transmitted fraudulent invoices
through U.S. Mail during course of each plaintiff's purchase of mobile home, thus constituting mail fraud under § 1961
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18 USCS § 1961
of RICO. Vietnam Veterans of America, Inc. v Guerdon Industries, Inc. (1986, DC Del) 644 F Supp 951 (criticized in
Foster Wheeler Corp. v Edelman (1987, DC NJ) 1987 US Dist LEXIS 16783).
Complaint alleging fraud and conversion will be amended to add plaintiff's RICO claim where plaintiff alleges defendant, by use of telephone, fraudulently induced it to deliver gold and silver to defendant's bankrupt corporation, because such use of telephone may constitute acts of wire fraud and mail fraud sufficient to be considered "pattern of
racketeering activity." U.S. Metal & Coin Co. v Burlock (1986, ED NY) 652 F Supp 37.
RICO complaint fails to allege pattern of racketeering activity and is dismissed, where plaintiff/family trust beneficiary charges various defendants with conspiracy to defraud her of trust interest through use of mails and telephones,
because such allegations charge only scheme to achieve single discrete objective and can be characterized as unsuccessful effort to dress garden variety fraud and deceit case in RICO clothing. Kraemer v Padgett (1987, DC Kan) 685
F Supp 1166.
"Pattern of racketeering" element of 18 USCS § 1961(5) was established by contractor's acts in violation of mail
fraud statute by regularly mailing invoices to client in furtherance of fraudulent scheme, each of which falsely attested
to his compliance with prevailing wage laws, and by receiving checks from clients via mail that represented fruits of his
fraudulent acts. System Mgmt., Inc. v Loiselle (2001, DC Mass) 138 F Supp 2d 78, RICO Bus Disp Guide (CCH) P
10052, revd, remanded (2002, CA1 Mass) 303 F3d 100, 8 BNA WH Cas 2d 161, RICO Bus Disp Guide (CCH) P
10331.
Owner of company failed to explain how each of defendants' acts furthered scheme to defraud or was incident to
essential part of mail and wire fraud scheme; RICO required specifics in charging paragraphs rather than mere incorporation of multitude of facts alleged in prior 37 pages of complaint. Gintowt v TL Ventures (2002, ED Pa) 226 F Supp 2d
672, RICO Bus Disp Guide (CCH) P 10372.
Shareholder alleged that corporate officers and directors engaged in pattern of racketeering conduct in alleged looting scheme, and other practices, including more than two predicate acts of mail fraud, consisting of payments to insiders, and at least one predicate act of obstruction of justice committed by one individual defendant in allegedly making
false statements to instant court in related salvage action; shareholder also alleged that corporation and its shareholders
were injured by Racketeering Influenced and Corrupt Organizations Act (RICO) violation because mail fraud was being
used to loot company and misrepresentation to court thwarted court's administration of salvor rights and its ability to act
as guardian to ensure artifacts would be properly handled; accordingly, RICO claim was close enough to what was required that it could not be said to be "wholly insubstantial and immaterial," and it was at least arguable and nonfrivolous, even if shareholder ultimately could not prevail on merits; thus corporate officers and directors could not defeat
service of process under RICO's nationwide service of process provisions. D'Addario v Geller (2003, ED Va) 264 F
Supp 2d 367, subsequent app, remanded (2005, CA4 Va) 2005 US App LEXIS 3233.
Plaintiffs' claims under Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1961 et seq. (RICO), were
dismissed under Fed. R. Civ. P. 12 (b)(6) because predicate acts of fraudulent misrepresentation that were alleged by
plaintiffs were made to non-parties and thus, plaintiffs had no standing to assert RICO claims; further, mail and wire
fraud that was alleged by plaintiffs did not constitute pattern of criminal activity, rather they were transactions that were
not connected. Mktg. Prods. Mgmt., LLC v Healthandbeautydirect.com, Inc. (2004, DC Md) 333 F Supp 2d 418.
While it was reasonable to infer that mails or wires might be used to further kind of conspiracy alleged by plaintiffs, plaintiffs had to begin by alleging that at least some individually-identified communications were substantively
fraudulent in nature and were also transmitted through mail or wire communication in violation of 18 USCS §§ 1341
and/or 1343, and plaintiffs had not yet done so; thus, their Racketeering Influenced and Corrupt Organization Act, 18
USCS § 1961 et seq., claims were dismissed without prejudice and with leave to refile. Limpert v Camberidge Credit
Counseling Corp. (2004, ED NY) 328 F Supp 2d 360.
Because plaintiff aviation company, which alleged that it was induced into entering into fixed based operations
contract on false misrepresentations, did not specify how alleged fraudulent statements to federal or state aviation agencies by defendant city airport commission were transmitted, or who sent misrepresentations, Racketeer Influenced Corrupt Organizations Act claims under 18 USCS §§ 1962(c), 1964(c), failed for lack of pleading two predicate acts, as was
required under 18 USCS § 1961(5), of mail or wire fraud under 18 USCS §§ 1341, 1343, with particularity as was required by Fed. R. Civ. P. 9(b). Barry Aviation, Inc. v Land O'Lakes Mun. Airport Comm'n (2005, WD Wis) 366 F Supp
2d 792.
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Plaintiff failed to state civil claim under RICO Act where plaintiff's complaint failed to properly allege racketeering
activity because plaintiff failed to identify purpose of wire frauds in alleged scheme. Bondi v Bank of Am. Corp. (In re
Parmalat Sec. Litig.) (2005, SD NY) 383 F Supp 2d 587.
All businesses used interstate mail or wires, and plaintiffs could not reformulate garden variety trademark infringement claims into mail or wire fraud in order to state violation of Racketeer Influenced & Corrupt Organizations
Act. Evercrete Corp. v H-Cap Ltd. (2006, SD NY) 429 F Supp 2d 612.
Debtor failed to sufficiently state violation of 18 USCS § 1962 against law firm and attorney following their efforts
to collect on debtor's credit card debt because credit card debt at issue was not unlawful debt within meaning of 18
USCS § 1961(6), debtor failed to allege facts supporting finding of pattern of racketeering activity within meaning of 18
USCS § 1961(1), and debtor's alleged predicate mail fraud claim was not described with requisite particularity. Neild v
Wolpoff & Abramson, LLP (2006, ED Va) 453 F Supp 2d 918.
Unpublished Opinions
Unpublished: Dismissal of civil Racketeer Influenced Corrupt Organization (RICO) Act case was proper because
RICO claims against commonwealth employees were based on mail, wire, and financial institution fraud and individual
had not pled fraud with particularity required by Fed. R. Civ. P. 9(b). Todaro v Richman (2006, CA3 Pa) 2006 US App
LEXIS 6279.
Unpublished: Dismissal of civil Racketeer Influenced Corrupt Organization (RICO) Act case was proper because
RICO claims against commonwealth employees were based on mail, wire, and financial institution fraud and individual
had not pled fraud with particularity required by Fed. R. Civ. P. 9(b). Todaro v Richman (2006, CA3 Pa) 2006 US App
LEXIS 6279.
Unpublished: Dismissal of RICO Act claim was vacated and remanded because racketeering acts alleged by plaintiffs (1997 wire fraud and two acts of mail fraud in 2001, wherein defendants made false representations about removal
of underground storage tanks) were sufficient to establish pattern of racketeering activity; alleged pattern of racketeering activity was not directed solely at plaintiffs, rather, allegedly fabricated affidavit underlying wire fraud predicate
was integral to alleged scheme to defraud any potential purchaser or lessee of property by concealing potentially hazardous storage tanks and was perpetrated against individual who prepared tank closure report. Fresh Meadow Food
Servs., LLC v RB 175 Corp. (2008, CA2) 2008 US App LEXIS 13392.
40.--Single scheme or goal
Multiple acts of mail fraud in furtherance of single episode of fraud involving one victim and relating to one basic
transaction cannot constitute pattern of racketeering activity under RICO; thus, complaint failed to allege pattern of
racketeering activity for purposes of civil RICO action, where multiple predicate acts relating to allegedly fraudulent
scheme to induce employee to settle workers' compensation claim involved single victim, inflicted single injury, and
occurred within 2 month period. Tellis v United States Fidelity & Guaranty Co. (1987, CA7 Ill) 826 F2d 477.
Alleged acts of mail fraud by investment advisor whereby advisor, on 2 occasions 4 months apart, caused monthly
bank statements and canceled checks from 2 of victim's bank accounts to be mailed to advisor's address were sufficient
to constitute "pattern" for purposes of "pattern of racketeering activity" requirement for civil RICO action; 2 acts were
designed to defraud victim twice by concealing advisor's conversion of her funds from 2 separate bank accounts, acts
showed necessary continuity, yet were sufficiently separate in time to constitute separate transactions, and while both
acts were part of same scheme to defraud, mere fact that predicate acts relate to same overall scheme or involve same
victim does not mean that acts automatically fail to satisfy pattern requirement. Appley v West (1987, CA7 Ill) 832 F2d
1021, 4 UCCRS2d 1495 (ovrld in part as stated in CIB Bank v Esmail (2004, ND Ill) 2004 US Dist LEXIS 26817).
Pattern of racketeering activity requires at least two acts of racketeering, and critical features of pattern of racketeering are continuity and relationship; since two acts of mail fraud that related to single business transaction constitute
pattern of racketeering activity, sufficient pattern of racketeering activity was alleged where complaint stated that numerous acts of mail and wire fraud were parts of single, otherwise lawful corporate merger not constituting pattern of
racketeering. Delta Truck & Tractor, Inc. v J.I. Case Co. (1988, CA5 La) 855 F2d 241, cert den (1989) 489 US 1079,
103 L Ed 2d 836, 109 S Ct 1531.
Employees' claims for violation of and conspiracy to violate federal RICO statute and state's analog, Civil Remedies for Criminal Practices Act, against former employer and law firm failed where specific incidents of mail and wire
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fraud that employees charged began on April 22, 1997, and ended, at latest, sometime in January 1998; nine months'
time was not adequately substantial and alleged racketeering activity was related to settlement of single lawsuit and was
not designed to perpetrate racketeering with respect to series of cases. Jackson v BellSouth Telcomms. (2004, CA11 Fla)
372 F3d 1250, 17 FLW Fed C 665.
Defendant may be convicted of engaging in pattern of racketeering activity even though he was charged with defrauding only one victim, since pattern of activity hinges on acts, and indictment charged him with 6 incidents of wire
fraud over 4-week period, even though only one victim was alleged to have been defrauded. United States v Chovanec
(1979, SD NY) 467 F Supp 41.
Separate acts of mail and wire fraud arising out of common nucleus of facts can be considered separate predicate
RICO acts to fulfill pattern of racketeering activity requirement. Beth Israel Medical Center v Smith (1983, SD NY)
576 F Supp 1061.
Multiple mailings in furtherance of single criminal episode are insufficient to allege pattern of racketeering under
18 USCS § 1961; although numerous mailings were alleged in furtherance of scheme, and assuming that each would
constitute separate offense and separate predicate act, each mailing did not result in separate injury or separate transaction and, therefore, each mailing was not separate criminal episode. Medical Emergency Service Associates (MESA)
S.C. v Foulke (1986, ND Ill) 633 F Supp 156, affd (1988, CA7 Ill) 844 F2d 391, 10 FR Serv 3d 1239.
Complaint insufficiently alleged pattern element under 18 USCS § 1962(c) against former officers and owners of
corporation and its depository bank where dishonored checks and bank statements allegedly were mailed to payees of
checks to create illusion of corporation's solvency while owners diverted corporate assets for their personal use, because
alleged predicate acts of mail and wire fraud constituted subdivisions of one fraudulent scheme and there were no allegations that defendants did these activities in past or were engaged in other criminal activities elsewhere. Madden v
Gluck (1986, ED Mo) 636 F Supp 463, affd (1987, CA8 Mo) 815 F2d 1163, cert den (1987) 484 US 823, 98 L Ed 2d
48, 108 S Ct 86.
Corporation's RICO claim is dismissed for failure to establish pattern of racketeering where corporation alleged its
co-venturer perpetrated several mail and wire frauds during parties' one joint venture, because RICO claim requires
more than single episode of racketeering activity even if episode consists of more than one indictable act. Millers Cove
Energy Co. v Domestic Energy Service Co. (1986, ED Mich) 646 F Supp 520.
Corporation's RICO claim is dismissed for failure to state pattern of racketeering activity where complaint alleged
isolated acts of mail fraud to effectuate single criminal episode of sale of product line, because pattern requires ongoing
multiple episodes of criminal activity. Gidwitz v Stirco, Inc. (1986, ND Ill) 646 F Supp 825, summary judgment den,
dismd, in part (1987, ND Ill) 1987 US Dist LEXIS 9736.
RICO claim is dismissed because allegations do not amount to requisite "pattern" of racketeering activity under 18
USCS § 1962, where defendant's alleged acts of mail fraud were all related to single alleged ongoing illegal act of defrauding plaintiff out of promised position and ownership interest in business defendant was to purchase. Forstmann v
Culp (1986, MD NC) 648 F Supp 1379.
Former employees failed to establish pattern of racketeering activity by employer where complaint alleged employer committed mail fraud in its acquisition of company and subsequent discharge of employees, because alleged
predicate acts revolve around one transaction and denote no threat of any continuing criminal activity. Cefali v Buffalo
Brass Co. (1986, WD NY) 653 F Supp 263.
Lender's RICO complaint is dismissed, where pleading alleges plaintiff made $ 5,000 loan to one brother who ran
his own company, other brother's separate company cashed loan check and its employee reviewed loan agreement, and
now original borrower has defaulted after paying only $ 300, because alleged predicate acts of mail and wire fraud to
dupe plaintiff out of his money occurred over short period of time, victimized only plaintiff, resulted in only one injury,
and related to only one loan transaction, and these acts clearly do not constitute "pattern" of racketeering activity.
Barlow v McLeod (1986, DC Dist Col) 666 F Supp 222, affd without op (1988, App DC) 274 US App DC 70, 861 F2d
303.
Tenants' RICO action against landlord of storage facility for damage because of roof leaks is dismissed, where
leaks pre-dated lease agreement but were not disclosed by landlord, and where complaint alleged pattern of activity including phone calls during lease negotiations and calls and letters after negotiations, all of which were intended to obtain money fraudulently from tenants, because all predicate acts alleged were in furtherance of single scheme of leasing
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premises, and Eleventh Circuit separate violation approach was specifically rejected. Bros v Culver (1987, DC Dist
Col) 650 F Supp 874.
Limited partnership's RICO claim is dismissed, because series of mail and wire frauds were all directed to consummating single fraud and were insufficient as "pattern" and there has been no allegation "enterprise" exists solely to
perpetrate fraud indefinitely or any other element to satisfy continuity requirement. Terra Resources I v Burgin (1987,
SD NY) 664 F Supp 82, CCH Fed Secur L Rep P 93266 (criticized in Rieger v Drabinsky (In re Livent, Inc. Noteholders
Sec. Litig.) (2001, SD NY) 151 F Supp 2d 371, CCH Fed Secur L Rep P 91495).
Predicate acts of mail and wire fraud allegedly committed by manufacturer of power-driven scaffolding equipment,
directed toward inducing corporation to purchase scaffolding company, do not constitute requisite pattern of racketeering activity under RICO, because there is no threat of continued activity in that case involved single alleged fraud with
single alleged victim. Windswept Corp. v Fisher (1988, WD Wash) 683 F Supp 233.
RICO plaintiff's allegations do not amount to pattern of racketeering activity, where plaintiff alleges her cocounsel
mailed forged releases of attorney's lien to 3 settling defendants' attorneys which resulted in their sending 3 settlement
checks to cocounsel omitting plaintiff's name, because 3 acts of mail fraud spanning 5-month period with single victim
is indicative of isolated offender-type case not meeting limiting requirement of pattern. Sutherland v O'Malley (1988,
ND Ill) 687 F Supp 392, affd (1989, CA7 Ill) 882 F2d 1196, reh den (1989, CA7) 1989 US App LEXIS 13761.
Borrower's RICO claim against lender must fail, despite allegations of at least 13 predicate acts of mail fraud in
conjunction with "curious" loan transaction, because complaint setting forth single scheme to defraud one victim of
money in single loan transaction does not meet RICO pattern requirement. Perkins v Nash (1988, DC Dist Col) 697 F
Supp 527.
Civil racketeering claim fails under 18 USCS § 1961(5) where complaint alleges single scheme to defraud single
victim through multiple acts of mail and wire fraud over 3-year period but not that fraudulent activities occurred in past
or are threatened in future. Cross v Simons (1989, ND Ill) 729 F Supp 588, amd (1989, ND Ill) 1989 US Dist LEXIS
5712.
Defendants were entitled to summary judgment on plaintiffs' Racketeer Influenced and Corrupt Organizations Act,
18 USCS § 1961 et seq., claims because there were no genuine issues of fact regarding issue of whether defendants were
actually engaged in scheme to defraud; every check that defendants were given as payment for used vehicles was actually approved by plaintiffs, who never complained that prices were too high, and plaintiffs had concededly produced no
proof that individual was receiving kickbacks on allegedly fraudulent transactions. Adee Motor Cars, LLC v Amato
(2005, SD NY) 388 F Supp 2d 250.
Because, in order to establish claim under Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1961 et
seq., based on mail or wire fraud, telephone calls or mailings need not have contained misrepresentations themselves,
magistrate judge erred in finding that summary judgment was not appropriate simply because there was no evidence that
conversations touched upon anything but availability and prices of used vehicles; since alleged scheme involved purchase of used vehicles, such "routine" conversations could very well have contributed to fraudulent scheme. Adee Motor
Cars, LLC v Amato (2005, SD NY) 388 F Supp 2d 250.
Consumers who brought action alleging violations of Racketeer Influenced and Corrupt Organizations Act (RICO)
by companies and individuals who sold debt management plans sufficiently alleged pattern of racketeering activity under 18 USCS § 1961 because complaint alleged more than two predicate acts of mail and wire fraud with regard to each
individual plaintiff, and also that these acts were related, as they had similar purposes, participants, victims, results, and
methods of commission; complaint also alleged predicate acts lasting over period of almost 24 months which posed
threat of continued criminal activity. Baker v Family Credit Counseling Corp. (2006, ED Pa) 440 F Supp 2d 392.
Shareholder did not state claim under 18 USCS § 1962(c) against corporation and provider of post-merger cleanup
services, as shareholder did not sufficiently allege pattern of racketeering activity within meaning of 18 USCS §
1961(5); shareholder's only claim of fraud involved single alleged scheme of very short duration revolving around
mailing of notice of post-merger share exchange; allegations were insufficient to establish either closed-ended or
open-ended continuity. Gavin v AT&T Corp. (2008, ND Ill) 543 F Supp 2d 885.
41. Misappropriation of public funds
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"Pattern of racketeering" requirement of 2 predicate acts is met where 2 defendants, jointly charged with RICO
conspiracy are alleged to have diverted federal funds to sheriff's election campaign and participated in deputy's scheme
to escort illegally loaded vehicles through state. United States v Davis (1983, CA6 Ohio) 707 F2d 880, 13 Fed Rules
Evid Serv 121.
Alleged use of mail and telephone communications by legal aid organization in misappropriating federal funds to
further opposition to Proposition 9 was not sufficient to constitute pattern of racketeering activity required to state civil
RICO claim, since even if scheme existed and mail and telephone were used to facilitate it, scheme was at most isolated
and presented no threat of continuing. Jarvis v Regan (1987, CA9 Cal) 833 F2d 149 (criticized in United States v Union Corp. (2000, ED Pa) 194 FRD 223).
Where defendant, deputy prosecuting attorney, was convicted of racketeering based on schemes to obtain grant
money for legal work, evidence was sufficient to establish continuity and show that defendant engaged in pattern of
racketeering activity; jury found that defendant was active participant in scheme which was itself part of larger criminal
enterprise centered on prosecuting attorney's office and encompassing predicate acts that took place over more than
year; further, where defendant, prosecuting attorney, was convicted of mail fraud and racketeering based on schemes to
obtain grant money for legal work, there was sufficient evidence to convict defendant of racketeering because, inter alia,
two schemes were sufficiently related so that they could be considered parts of same enterprise on issue of closed ended
continuity. United States v Hively (2006, CA8 Ark) 437 F3d 752, reh, en banc, den (2006, CA8 Ark) 2006 US App
LEXIS 6092.
42. Murder
Since no RICO violation can be shown unless there is proof of specified relationship between racketeering acts and
RICO enterprise, defendant's participation in murder of 3 members of Costa Nostra family as representative of Costa
Nostra Commission constituted pattern of racketeering activity within meaning of RICO, inasmuch as there were 3 persons targeted for assassination, and although murders were virtually simultaneous, they plainly constituted more then
one act. United States v Indelicato (1989, CA2) 865 F2d 1370.
Two alleged acts of attempted murder constitute "pattern of racketeering activity" under RICO where (1) alleged
attempts were two separate acts committed year apart and directed at same "enterprise" and (2) predicate acts had as
major purpose economic gain. Von Bulow v Von Bulow (1986, SD NY) 634 F Supp 1284.
RICO action by man wrongly convicted of murder against actual murderer and employer of murderer failed to state
claim because it did not establish pattern of racketeering activity, where employer hired actual murderer to kill his
ex-wife, murderer did so, assault on and murder of ex-wife, cited as predicate acts, took place at same time, employer
testified against man wrongly convicted, but employer's obstruction of justice was not closely related to acts of violence, there was at most one scheme to kill ex-wife, and there was no threat of continued criminal conduct by murderer
and employer. Purvis v Hamwi (1993, DC Colo) 828 F Supp 1479, RICO Bus Disp Guide (CCH) P 8652.
43. Oil and gas interests
Investment fraud scheme allegedly carried out by several individuals and 2 separate entities, bank and oil company,
involving repetition of similar misrepresentations to more than 20 investors, constituted pattern of fraudulent activity
sufficient to support RICO claim. Barticheck v Fidelity Union Bank/First Nat'l State (1987, CA3 NJ) 832 F2d 36 (superseded by statute as stated in Young v West Coast Indus. Relations Ass'n (1992, DC Del) 144 FRD 206) and (criticized in Leonard A. Feinberg, Inc. v Central Asia Capital Corp. (1997, ED Pa) 974 F Supp 822, 34 UCCRS2d 112).
Continuity prong was not satisfied in RICO action arising out of purchase of oil development investments, where
defendants' actions during one year period were directed toward single fraudulent goal, involved limited purpose, one
perpetrator and one set of victims. Menasco, Inc. v Wasserman (1989, CA4 Md) 886 F2d 681.
Investors in oil and gas limited partnerships properly pled RICO claim against oil and gas operator, financier and
promoter of partnerships, where complaint alleges acts for which each defendant theoretically could have been indicted
on more than one count of wire fraud, mail fraud or securities fraud, because, although proliferation of civil RICO litigation is alarming, "pattern" of racketeering activity is properly pled if allegations merely include separate predicate
acts having similar purposes, results, participants, victims or methods of commission, or other indicia of continuity--18
USCS § 1961 does not require alleged acts to be separate from one another or unconnected to same criminal scheme or
episode. Volckmann v Edwards (1986, ND Cal) 642 F Supp 109.
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Investors in device to convert natural gas to liquid natural gas properly allege "pattern of racketeering activity" in
civil RICO actions against promoters, where complaint alleges (1) multiple predicate acts against each promoter, (2)
acts were part of single scheme to defraud prospective purchasers, and (3) certain of predicate acts were repeated as to
certain investors who invested on more than one occasion. In re Gas Reclamation, Inc. Sec. Litigation (1987, SD NY)
659 F Supp 493, CCH Fed Secur L Rep P 93217 (criticized in Silverman v Ernst & Young, LLP (1999, DC NJ) 1999 US
Dist LEXIS 17703).
Buyers of oil and gas drilling securities fail properly to allege pattern of racketeering activity under 18 USCS §
1961(5), where (1) complaint fails to allege that organizers' use of "mail and telephone" lines constitutes either federal
mail or wire fraud, and particular means of presumed mail or wire fraud, and (2) only 2 specific acts--certain organizer
being defendant in SEC action for securities fraud and organizers' sale of worthless well to unspecified individual--are
alleged, because these acts lack even factual relationship to each other. Mills v Fitzgerald (1987, ND Ga) 668 F Supp
1554.
RICO claims of oil and gas limited partnership investors will be summarily dismissed, where investors allege
fraudulent inducement to invest by means of several mailings and other unspecified acts occurring over several-week
period and resulting in 5 victims suffering one collective injury, because 19 status reports mailed after investment was
induced cannot be considered part of fraudulent scheme, and limited acts of inducement do not reflect continuity and
relationship necessary to form RICO pattern under 18 USCS § 1961(5). Fisher v Samuels (1988, ND Ill) 691 F Supp
63, CCH Fed Secur L Rep P 94077.
Oil and gas exploration company's RICO claim against corporate shareholder is dismissed for failure to allege pattern of racketeering activity where company claimed shareholder misappropriated 8-inch natural gas pipeline from it,
because all alleged acts are part of single scheme to appropriate company's oil and gas opportunities in Kentucky, and
there are no allegations of similar activities in the past or elsewhere. Associated Petroleum Producers, Inc. v Treco 3
Rivers Energy Corp. (1988, ED Mo) 692 F Supp 1070.
Shareholder will be given 30 days to amend complaint to state RICO claim against coventurer in Venezuelan
oil-drilling corporation, where shareholder alleges several "schemes" devised by coventurer over 20-year period to hide
profits and misappropriate funds of corporation which were carried out through numerous acts of mail and wire fraud,
because allegations satisfy "relationship" prong of "pattern" test, but further specificity concerning similar schemes
perpetrated against other investors is necessary to satisfy "continuity" prong. Wilson v Askew (1989, WD Ark) 709 F
Supp 146.
44. Real estate development and sales
Numerous instances of alleged mail fraud, wire fraud, transportation fraud, and extortion by defendant land developer in obtaining decisions from state and local governments regarding zoning, condemnation and highway placement
favorable to defendant and adverse to plaintiff developer of adjacent property did not constitute pattern of racketeering
for purposes of civil RICO action, since number of predicate acts in seeking multiple permits and approvals over 4-year
period arose from complexity and protracted nature of political processes governing land development, rather than from
distinctively pervasive nature of defendant's scheme. HMK Corp. v Walsey (1987, CA4 Va) 828 F2d 1071, cert den
(1988) 484 US 1009, 98 L Ed 2d 657, 108 S Ct 706.
More than single scheme is necessary in order to establish RICO pattern of racketeering activity; thus, property
owners' association in RICO action against subdivision developers failed sufficiently to allege pattern of racketeering
activity, since association claimed that predicate acts of mail fraud constituted parts of single fraudulent scheme to
market property, but failed to allege that developers engaged in similar fraudulent activities in past or were engaged in
similar activities elsewhere. Terre Du Lac Asso. v Terre Du Lac, Inc. (1987, CA8 Mo) 834 F2d 148, vacated (1989)
492 US 913, 106 L Ed 2d 582, 109 S Ct 3234.
Predicate acts may constitute pattern of activity under RICO (18 USCS §§ 1961 et seq.), even though only single
scheme is involved; thus, government established requisite pattern, where alleged acts of mail and wire fraud related to
single scheme to defraud by "overselling" condominium and apartment time share contracts. United States v Kirk
(1988, CA9 Hawaii) 844 F2d 660, 25 Fed Rules Evid Serv 683, cert den (1988) 488 US 890, 102 L Ed 2d 213, 109 S Ct
222.
Allegation of three episodes of forgery involving real property transactions, related by similar purposes and identical methods of commission, suggesting regular way of conducting business, and posing continued threat of criminal
activity, satisfies RICO requirement of pattern. Ticor Title Ins. Co. v Florida (1991, CA9 Cal) 937 F2d 447, 91 CDOS
Page 68
18 USCS § 1961
4864, 91 Daily Journal DAR 7536 (criticized in Word of Faith World Outreach Ctr. Church v Sawyer (1996, CA5 Tex)
90 F3d 118, 24 Media L R 2209, RICO Bus Disp Guide (CCH) P 9093).
Scheme to defraud was not proved where reasonable juror would have to conclude that seller's own representations
about value or rental income of homes in Florida land development concerned something that customer should and
could easily confirm from readily available external sources by, for example, telephone call to seller's competitors or
looking at classified ads. United States v Brown (1996, CA11 Fla) 79 F3d 1550, 9 FLW Fed C 1025 (criticized in United States v Falkowitz (2002, SD NY) 214 F Supp 2d 365) and (criticized in United States v Cabe (2003, CA4 SC) 57 Fed
Appx 542) and (ovrld in part by United States v Yeager (2003, CA11 Ala) 60 Fed Rules Evid Serv 1227, 16 FLW Fed C
407).
Complaint does not sufficiently allege pattern of racketeering activity where, at best, complaint alleges that defendants committed single act of common law fraud in regard to single real estate transaction. Pit Pros, Inc. v Wolf
(1983, ND Ill) 554 F Supp 284.
RICO plaintiffs, investors in real estate development venture, fail to satisfy "pattern" element of RICO liability under 2-prong "continuity plus relationship" test utilized by Eighth Circuit where plaintiffs have alleged several acts of
mail and wire fraud and violations of federal registration and antifraud securities laws, all undertaken in furtherance of
defendants' alleged mismanagement and misappropriation of plaintiffs' cash investment, since these "predicate acts"
essentially represent subdivisions of single illegal act. Clodfelter v Thuston (1986, ED Mo) 637 F Supp 1034, CCH
Fed Secur L Rep P 92876.
RICO claim is dismissed because allegations of fraud in single land transaction--sale of less acreage than promised--with one set of participants and one victim state single unlawful transaction, not "pattern of racketeering."
Schaafsma v Marriner (1986, DC Vt) 641 F Supp 576.
Corporation's real estate developer fails to allege pattern of racketeering activity in relations between real estate
developer and bank because all acts were directed at inducing developer to enter contract and thus alleged violations
involve one set of participants and one victim. Technology Exchange Corp. v Grant County State Bank (1986, DC
Colo) 646 F Supp 179, CCH Fed Secur L Rep P 93100.
RICO complaint is dismissed, where intervenor alleges defendants' acquisition of land development rights through
bribery scheme in violation of its right of first refusal injured intervenor, because such allegation claims injury due to
one illegal act or scheme rather than "pattern" of racketeering. Indiana Constr. Corp. v Chicago Tribune Co. (1986,
ND Ind) 648 F Supp 1419, 13 Media L R 1863.
Investors in real estate investment trust alleged sufficient pattern of racketeering activity where complaint listed
several mail and wire fraud activities with purpose of diverting income from trust, diverting corporate opportunity, and
attempted securities fraud by securing investor's shares for less than firm price. Klapper v Commonwealth Realty Trust
(1987, DC Del) 657 F Supp 948 (criticized in Joseph Giganti Veritas Media Group, Inc. v Gen-X Strategies, Inc. (2004,
ED Va) 222 FRD 299, 2004-2 CCH Trade Cases P 74500).
Homebuilder failed to establish pattern of racketeering activity on part of realtor/seller who allegedly falsely represented that lots were suitable for single-family homes, knowing that highway would be built through area, because allegations involve only one deal with one individual who purchased lots based on mass advertising and mailings, and there
was no ongoing design or continuity. J.G. Williams, Inc. v Regency Properties, Ltd. (1987, ND Ga) 672 F Supp 1436.
RICO claim made by investor against limited partnership it invested in and others is dismissed, where all allegations relate to false or misleading information given to investor to induce investment in motel and conference center
operation, because (1) this transaction is too limited to constitute pattern under RICO, (2) 2 or more uses of mail and
telephone during negotiations does not make pattern out of single fraudulent commercial transaction, and (3) bald allegation that main individual behind limited partnership has engaged in similar frauds regarding other limited partnerships
does not salvage RICO pleading. Bamco 18 v Reeves (1987, SD NY) 675 F Supp 826, CCH Fed Secur L Rep P 93556.
Sellers of real property fail to allege sufficient "pattern of racketeering activity" to make out RICO claim where
sellers allege that defendant realtors conducted business affairs through pattern of mail and wire fraud, in that realtors
used telephone and mail service to convey misrepresentations which resulted in fraudulent inducement of plaintiffs to
sell property for half its true fair market value, since "pattern" requires more than multiple acts of racketeering committed to further single criminal transaction, episode or event, and plaintiffs fail to allege requisite continuity among alleged acts of "racketeering." McMullen v Christenson (1987, ED Mich) 678 F Supp 1277.
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18 USCS § 1961
Real estate investor failed adequately to allege RICO conspiracy where he charged defendants with scheme fraudulently to induce him to invest in condominium development, because alleged agreement to defraud investor, which occurred later than agreement to defraud other victim, is not part of same overall conspiracy as those acts against other
victim, and thus does not constitute pattern of racketeering activity. Lingle v Ziola (1988, ND Ill) 701 F Supp 158, 13
FR Serv 3d 728.
Civil racketeering claim is not where complaint alleges separate fraudulent sales of resort interests to 366 plaintiffs,
because "continuity plus relationship" is not alleged and thus neither is pattern of racketeering activity. Nichols v Merrill Lynch, Pierce, Fenner & Smith (1989, MD Tenn) 706 F Supp 1309, CCH Fed Secur L Rep P 94457.
Purchasers of resort condominiums may proceed with RICO claim against sellers of units, based on alleged misrepresentations concerning scope and development of resort that were made to 33 purchasers over period of several
months, because facts are sufficient to create issue of fact regarding pattern of racketeering activity. Bhatla v Resort
Dev. Corp. (1989, WD Pa) 720 F Supp 501, CCH Fed Secur L Rep P 94756, app dismd (1993, CA3 Pa) 990 F2d 780.
Civil racketeering claim is not alleged under 18 USCS § 1961(5), where alleged real estate fraud scheme involved
single victim, goal of alleged scheme was fraud in single transaction, and there is no indication that alleged fraud will
continue in future. Continental Realty Corp. v J.C. Penney Co. (1990, SD NY) 729 F Supp 1452.
Racketeering claim is not alleged under 18 USCS § 1961(5), where complaint alleges racketeering activity related
only to development of single real estate project that took place over short period of time and does not allege past criminal conduct that projects into future, because continuity element of pattern of racketeering activity is missing. Homes
by Michelle, Inc. v Federal Sav. Bank (1990, ND Ga) 733 F Supp 1495, 112 ALR Fed 865.
Where plaintiff negotiator sued defendants, father and son who were principals of construction firm, for civil RICO
Act violations, and negotiator alleged that son learned his father had purchased residence for negotiator and that he
somehow used that information to secure substantial funding from his father and to influence his father to breach
agreement with her, because negotiator had not asserted that son's "use" of that information involved unlawful threats,
those facts, alone, would not comprise extortion under 18 USCS § 1951(b)(2) as "racketeering activity" under 18 USCS
§ 1961(1) and further, it was unclear how son's alleged "blackmail" of father to support construction firm related to negotiator's professed injuries for her 18 USCS § 1962(c) claim. Elemary v Holzmann (2008, DC Dist Col) 533 F Supp 2d
116.
Home buyer's belief that there was conspiracy to defraud him and that his property was appraised at value in excess
of what it was worth was not enough to state claim under Racketeer Influenced and Corrupt Organizations Act, 18
USCS § 1961 - 1968, and Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 Pa. Stat. Ann. §§
201-1 et seq.; a mere belief, without more, was wholly insufficient to survive motion for summary judgment. Hearns v
Parisi (2008, MD Pa) 548 F Supp 2d 132.
Home purchasers made sufficient showing at summary judgment stage that developer and various corporate entities
engaged in pattern of predicate acts of mail and wire fraud within meaning of 18 USCS § 1961(1), part of Racketeer
Influenced and Corrupt Organizations Act, and 18 USCS §§ 1341 and 1343; developer and entities allegedly enticed
purchasers through advertisements that misrepresented terms upon which purchasers could buy homes, and developer
and entities allegedly sold homes to purchasers in excess of market value by arranging for inflated appraisals and granting improper purchase incentives. Lester v Percudani (2008, MD Pa) 556 F Supp 2d 473.
45. Securities, commodities, or bond fraud
Complaint alleging numerous uses of mails and telephone in furtherance of allegedly fraudulent scheme, constituting multiple acts of mail, wire, and securities fraud indictable under federal statutes, states allegations sufficient to support "pattern" to make out RICO claim. Smith v Cooper/T. Smith Corp. (1988, CA5 La) 846 F2d 325, CCH Fed Secur
L Rep P 93794, remanded (1989, CA5) 883 F2d 357 and reinstated, in part (1989, CA5 La) 886 F2d 755, mod on other
grounds (1989, CA5) 1989 US App LEXIS 19530.
"Greenmail" securities transaction does not constitute extortion or securities fraud for purpose of predicate act requirement of RICO claim. Viacom Int'l, Inc. v Icahn (1991, CA2 NY) 946 F2d 998, CCH Fed Secur L Rep P 96286,
cert den (1992) 502 US 1122, 117 L Ed 2d 477, 112 S Ct 1244.
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18 USCS § 1961
RICO claim for securities and mail fraud was without merit where prospectus and other mailings contained information plaintiffs contended was omitted. Atkins v Hibernia Corp. (1999, CA5 La) 182 F3d 320, RICO Bus Disp Guide
(CCH) P 9740.
Series of civil settlements and stipulations entered into by various defendants with SEC in earlier SEC proceedings
unrelated to present litigation are insufficient to constitute proof of fraud in sale of securities to establish acquisition of
company through pattern of racketeering activity. Marshall Field & Co. v Icahn (1982, SD NY) 537 F Supp 413, CCH
Fed Secur L Rep P 98481, CCH Fed Secur L Rep P 98484, CCH Fed Secur L Rep P 98603, CCH Fed Secur L Rep P
98616.
Evidence of violation of securities law in acquisition of common stock is insufficient to support RICO claim where
there is no showing of 2 related instances of fraudulent activity sufficient to suggest pattern of racketeering activity.
K-N Energy, Inc. v Gulf Interstate Co. (1983, DC Colo) 607 F Supp 756, CCH Fed Secur L Rep P 99423.
Requirement of pleading "pattern of racketeering activity" is met by alleging two acts which relate to each other
and arise out of same scheme; however, alleged securities violations which are unrelated to other predicate acts and
which cause no injury to pleading party may not be pleaded as part of pattern. Conan Props. v Mattel, Inc. (1985, SD
NY) 619 F Supp 1167.
Dismissal of action is granted where stock purchaser's complaint fails sufficiently to allege pattern of racketeering
activity, but only alleges multiplicity of criminal acts done in furtherance of fraudulent scheme to promote sale of
common stock in public offering. Miller v Calvin (1985, DC Colo) 647 F Supp 199.
Pattern of racketeering activity is properly stated where bond buyers alleged sellers made fraudulent misrepresentations regarding marketing of bonds and such acts took place over period of 6 years, across country, and injured approximately 1400 investors, because such facts show pattern of activities rather than merely single fraudulent scheme.
Kronfeld v First Jersey Nat'l Bank (1986, DC NJ) 638 F Supp 1454, CCH Fed Secur L Rep P 92898 (criticized in United States ex rel. Atkinson v Pa. Shipbuilding Co. (2000, ED Pa) 2000 US Dist LEXIS 12081).
Commodities investor stated sufficient pattern of racketeering activity, where he alleged commodities firm and employee committed check forgery and conversion of funds involving his trading account, acts were 4 independently motivated crimes injuring investor 4 times over 1-year period, and recurrence of forgeries reasonably implies threat of ongoing criminal activity. Ghouth v Conticommodity Services, Inc. (1986, ND Ill) 642 F Supp 1325 (ovrld in part as
stated in CIB Bank v Esmail (2004, ND Ill) 2004 US Dist LEXIS 26817).
RICO claim against broker for alleged misrepresentations and material omissions with respect to management of
investor's stocks is stated, where broker's activities constituted requisite "pattern" of racketeering activity continued over
period of 14 months and satisfied "continuity plus relationship" standard. Gaudette v Panos (1986, DC Mass) 644 F
Supp 826, CCH Fed Secur L Rep P 92947, mod on other grounds, on reconsideration (1987, DC Mass) 650 F Supp 912,
revd on other grounds, remanded (1988, CA1 Mass) 852 F2d 30, 11 FR Serv 3d 942.
Pattern of racketeering activity is satisfied where complaint alleged that false information had been provided to 5
individuals in order to induce stock purchases and individuals engaged in numerous stock transactions each of which
constitutes criminal episode for purposes of establishing pattern. Morgan v Kobrin Secur., Inc. (1986, ND Ill) 649 F
Supp 1023, CCH Fed Secur L Rep P 93104.
Pattern of racketeering activity is satisfied in complaint against salesman for brokerage firm where stock purchaser
alleges that salesman (1) misrepresented that he was registered representative of brokerage firm and misrepresentation
led purchaser to buy and retain stock, (2) misrepresented recommending purchase of stock in anticipation of stock split
which never occurred, and (3) engaged in unauthorized discretionary trading in purchaser's non-discretionary account,
because acts of salesman took place over period of time committed in furtherance of 3 discrete but related schemes to
separate purchaser from his money. Morris v Gilbert (1986, ED NY) 649 F Supp 1491, CCH Fed Secur L Rep P
93132.
Motion to dismiss is denied in RICO action by stock purchasers against broker and corporate issuer for multiple
mail, wire and securities frauds in furtherance of at least 9 separate securities transactions, because multiple frauds were
not in furtherance of single scheme, and therefore proper continuity and pattern are properly alleged. Welek v Solomon
(1987, ED Mo) 650 F Supp 972, CCH Fed Secur L Rep P 93150.
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18 USCS § 1961
Third party complaint sufficiently alleges "pattern of racketeering" where scheme entailed 3 fraudulent standby
bond commitments in 2 cities, over period of years with numerous victims, which demonstrate regular manner in which
defendants do business. Federal Sav. & Loan Ins. Corp. v Provo Excelsior, Ltd. (1987, DC Utah) 664 F Supp 1405,
CCH Fed Secur L Rep P 93754.
Industrial revenue bond buyers state no valid RICO claim against bond sellers, where complaint asserts defendants
also defrauded other customers through involvement in schemes regarding sale of real property, private placement of
cable television partnership interests, sales of interests in oil and gas programs, and sales of commodities fund, because
bond buyers fail to satisfy "pattern" requirement since acts purportedly constituting pattern were completely unrelated to
bond sales. Sullivan v Boettcher & Co. (1989, DC Dist Col) 714 F Supp 1132.
Claim of investor in loan participations against promoter under 18 USCS § 1962(c) is not dismissed, where investor
alleged several instances of mail and wire fraud and securities violations that occurred over period of 3 years and one
month, because investor alleged sufficient facts to show pattern of racketeering activity since (1) predicate acts alleged
were related by common goal of fraudulently inducing investor to lend money to third parties and (2) acts were sufficiently spaced apart and distinctive so as not to constitute single criminal episode. Laker v Freid (1994, DC Mass) 854
F Supp 923, CCH Fed Secur L Rep P 98431.
46.--Continuity
Alleged actions of securities brokerage firm and its employee in recommending unsuitable investments and churning investor's account, absent claim that firm and employee engaged in similar endeavors in past or were engaged in
other criminal activities, would at worst comprise one scheme to generate excessive sales commissions, so that investor
failed to allege continuity necessary to establish "pattern" of racketeering activity for purposes of civil RICO action.
Deviries v Prudential-Bache Secur., Inc. (1986, CA8 Mo) 805 F2d 326, CCH Fed Secur L Rep P 92988.
RICO suit claiming securities fraud in purchase by family corporation of plaintiff's shares in 1977 does not satisfy
"continuity" requirement where there was one offer to purchase, followed by 4 acceptances, with no threat of future
criminal conduct. Short v Belleville Shoe Mfg. Co. (1990, CA7 Ill) 908 F2d 1385, CCH Fed Secur L Rep P 95379, cert
den (1991) 501 US 1250, 115 L Ed 2d 1052, 111 S Ct 2887.
Complaint adequately pleaded existence of "pattern of racketeering activity" under 18 USCS § 1961, where broker's
alleged fraudulent acts consisted of multiple predicate acts of racketeering, including discreet allegations of "churning",
misrepresentations as to riskiness, profitability, and type of activity being conducted in account, and deceptions as to
broker's own skills and unique nature of his services; these acts, stretching over period of 18 months, evidenced requisite continuity to constitute pattern of racketeering activity, without consisting of one criminal act divided into component pieces in order to satisfy quantitative demands of § 1961, and satisfied "relationship" prong of pattern inquiry, as
they possessed same purposes, results, victims, or methods, namely alleged attempt to defraud plaintiff out of his stock
equity. Rush v Oppenheimer & Co. (1985, SD NY) 628 F Supp 1188, CCH Fed Secur L Rep P 92444.
Plaintiffs failed to meet "pattern" requirement of RICO by failing to allege actions by defendants that would satisfy
"continuity" standard, where they alleged multiple interrelated acts of wire fraud underlying alleged violations of federal and state security laws, all of which were alleged to have been undertaken with single purpose of effecting transfer of
real estate from one limited partnership to another, and where they did not allege that defendants had engaged in those
activities in past or that they are engaged in other criminal activities elsewhere. Allright Mo. v Billeter (1986, ED Mo)
631 F Supp 1328, affd in part and revd in part on other grounds, remanded (1987, CA8 Mo) 829 F2d 631, 9 FR Serv 3d
27.
Plaintiffs failed to allege pattern of fraudulent activity where fraudulent acts were not sufficiently distinct in time or
substance to comprise pattern, and where alleged misrepresentations occurred over short period of time, were made to
same people, and took substantially same form since "continuity" necessary for pattern required some separation as well
as relatedness of acts in question. Paul S. Mullin & Associates, Inc. v Bassett (1986, DC Del) 632 F Supp 532, CCH
Fed Secur L Rep P 92722.
Pattern of racketeering activity requirement under 18 USCS § 1961 is satisfied where "continuity" and "relationship" are shown by allegations that broker fraudulently induced investors to open discretionary options trading account
by misrepresenting risk in option tradings and that broker churned their account. Levine v Merrill Lynch, Pierce, Fenner & Smith, Inc. (1986, SD NY) 639 F Supp 1391, CCH Fed Secur L Rep P 92841.
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18 USCS § 1961
Complaint alleges "pattern of racketeering activity" under 18 USCS § 1961(5) in civil RICO action by investors in
2 limited partnerships against bank that financed investment, alleging that at least one employee of bank allegedly received kickback from principals of one partnership for inducing investment, where (1) enterprise committed racketeering acts, and (2) bank allegedly committed various acts in furtherance of scheme to defraud investors, including attempt
to cover up its role in any illegal activity by denials to investors and state banking authorities, because bank participated
indirectly or peripherally in affairs of enterprise and bank's scheme with respect to both partnerships had sufficient imprimatur of continuity and open-endedness to constitute pattern. Hill v Equitable Bank, N.A. (1986, DC Del) 642 F
Supp 1013.
Civil RICO action fails to allege facts evidencing continuity sufficient to form pattern of racketeering activity,
where seller of shares of corporation claims predicate acts on part of buyer, financing institutions, and seller's accountants, which are related to one another and arise out of same transaction, but fails to allege facts demonstrating that any
combination of defendants had ever engaged in racketeering activity before or after allegedly fraudulent business deal
or were engaged in criminal activities elsewhere. Kovian v Fulton County Nat'l Bank & Trust Co. (1986, ND NY) 647
F Supp 830.
Motion to dismiss RICO claim for failure to state claim is denied in action by investor and family against broker
and investor's son arising out of series of unauthorized transactions resulting in severe losses, where broker contended
that activity constituted one scheme against one victim or group of victims resulting in one injury but where investor
alleged over 100 separate transactions on 4 different accounts using forgery and misrepresentations to accomplish securities fraud against 5 people over 2-year period, because despite fact that each misrepresentation or fraudulent act did
not create separate injury, each transaction did, and predicate acts and transactions were sufficiently continuous over
extended period of time to constitute pattern. Donato v Merrill Lynch, Pierce, Fenner & Smith, Inc. (1987, ND Ill) 663
F Supp 669, CCH Fed Secur L Rep P 93358.
RICO claim based on fraudulent investments in commodities sufficiently alleges pattern of racketeering, where
plaintiffs allege Illinois partnership prepared false and fraudulent prospectus used by its European agents to solicit funds
from West German citizens for purposes of trading financial futures on United States commodity exchanges, and allege
predicate acts of mail and wire fraud and transportation of stolen money which continued over period of 6 months in
furtherance of scheme causing distinct injury to numerous plaintiffs who lost entire investment in venture, because even
though only one scheme is identified, (1) number and variety of predicate acts, (2) length of time over which they were
committed, (3) number of victims, and (4) occurrence of distinct injuries, indicate "continuity and relationship" necessary to constitute "pattern" of racketeering activity in Seventh Circuit. Gassner v Stotler & Co. (1987, ND Ill) 671 F
Supp 1187.
Investors properly alleged pattern of racketeering activity against stockbroker, where complaint set forth several
specifically pled allegations of churning by broker, because predicate acts need not always occur as part of separate
schemes in order to satisfy continuity aspect of pattern requirement. Robinson v Kidder, Peabody & Co. (1987, ED
Mich) 674 F Supp 243, app dismd without op (1988, CA6 Mich) 841 F2d 1127.
Financial institution alleged sufficient pattern of racketeering activity by brokerage firm defendants, where complaint states defendants implemented scheme to defraud institution in its equity investments by numerous acts of mail,
wire, and securities fraud, because although only single scheme is alleged, it is open-ended, ongoing scheme comprised
of many "episodes," and as such, there was at least threat of continuity. Wichita Fed. Sav. & Loan Ass'n v Landmark
Group, Inc. (1987, DC Kan) 674 F Supp 321, CCH Fed Secur L Rep P 93623.
Shareholder's RICO causes of action fail to meet continuity aspect of RICO pattern requirement, even though alleged fraud was perpetuated through numerous documents, spread out over time, and affected all minority shareholders
of corporation, because all claims arise from single set of acts aimed toward single primary goal of increasing corporate
leaders' ownership interest at expense of those minority shareholders. Lochhead v Alacano (1988, DC Utah) 697 F
Supp 406, CCH Fed Secur L Rep P 94130.
Pattern requirement for securities fraud RICO claim is met, where complaint alleges numerous fraudulently induced stock transactions over period of almost 3 years involving only one investor who lost at least $ 60,000 thereby,
because predicate acts alleged were closely related and sufficiently continuous and ongoing to satisfy pattern requirement even though single scheme/single victim scenario may eventually not support RICO claim. Filloramo v Johnston, Lemon & Co. (1988, DC Dist Col) 697 F Supp 517, CCH Fed Secur L Rep P 95286.
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18 USCS § 1961
Investors have adequately alleged pattern of racketeering, where complaint alleges misstatements made or confirmed by 2 promoters at seminar in connection with purchase of securities in 2 different companies on 2 different dates,
which led to couple's loss of $ 70,000 investment, because alleged predicate acts of securities fraud demonstrate continuity plus relationship which combines to produce pattern. Flournoy v Peyson (1988, ND Ill) 701 F Supp 1370, CCH
Fed Secur L Rep P 94355.
Pattern of racketeering activity is properly alleged under 18 USCS § 1961(5), where complaint alleges (1) scheme
by at least 12 perpetrators to defraud at least 10 victims at various locations over several years and (2) second fraudulent
scheme also involving securities. Bloch v Prudential-Bache Sec. (1989, WD Pa) 707 F Supp 189, CCH Fed Secur L
Rep P 94386.
RICO claims of investors in limited partnership are dismissed where complaint fails to plead adequately continuity
of activity because, although RICO claim may be pleaded properly without allegation that enterprise has no demonstrable end point, it is necessary to allege that "there is continuity or a threat of continuity" to racketeering acts. Bruce v
Martin (1989, SD NY) 712 F Supp 442.
47.--Number of predicate acts
Complaint alleging numerous uses of mails and telephone in furtherance of allegedly fraudulent scheme, constituting multiple acts of mail, wire, and securities fraud indictable under federal statutes, states allegations sufficient to support "pattern" to make out RICO claim. Smith v Cooper/T. Smith Corp. (1988, CA5 La) 846 F2d 325, CCH Fed Secur
L Rep P 93794, remanded (1989, CA5) 883 F2d 357 and reinstated, in part (1989, CA5 La) 886 F2d 755, mod on other
grounds (1989, CA5) 1989 US App LEXIS 19530.
While defendants may have committed numerous related predicate acts, all of those acts arose from single, isolated
event, i.e., distribution of one misleading statement in connection with single issuance of bonds, and plaintiffs therefore
failed to allege "pattern" of racketeering activity. Durning v Citibank, Int'l (1993, CA9 Wash) 990 F2d 1133, 93 CDOS
2568, 93 Daily Journal DAR 4412, RICO Bus Disp Guide (CCH) P 8269.
Three predicate acts, part of single scheme, may show patterns of racketeering but do not show threat of continuity
necessary to demonstrate patterns for RICO claims where only one allegedly misleading official statement was delivered to many investors as part of single bond offering. Sheftelman v Jones (1986, ND Ga) 636 F Supp 263.
Complaint states pattern of racketeering activity where shareholder alleged corporate defendants made numerous
mailings of fraudulent test data over 3-year period in furtherance of scheme to defraud government, because each mailing is separate offense and together mailings constitute pattern. Lewis on behalf of National Semiconductor Corp. v
Sporck (1986, ND Cal) 646 F Supp 574.
Pattern of racketeering requirement is not satisfied in action against bank for blocking transfer of its stock where
complaint alleges predicate acts of mail and wire fraud committed pursuant to single scheme within relatively short and
limited time period; predicate acts are not diverse and number of acts is so indeterminate that they cannot be characterized as being continuous in sense that they were committed in separate transactions somewhat separate in time and
place. Gianakas v Siensa (1986, ND Ill) 649 F Supp 1033.
No pattern of racketeering activity is alleged by claimants who artificially divide negotiation and implementation of
Stock Sale Agreement into 5 segments they denominate "schemes," and plead facts supporting only single RICO predicate act of extortion. Castle v Cohen (1987, ED Pa) 676 F Supp 620, affd in part and remanded in part (1988, CA3 Pa)
840 F2d 173.
RICO complaint sufficiently alleges "pattern" of racketeering activity, where investors allege broker committed
predicate acts of mail, wire, and securities fraud on numerous occasions between February 1983 and March 1984, because complaint cites specific misrepresentations which could constitute more than one statutory predicate act committed "within 10-year period." Wing v J.C. Bradford & Co. (1987, ND Miss) 678 F Supp 622, CCH Fed Secur L Rep P
93404.
RICO plaintiffs sufficiently plead pattern of racketeering activity by defendants, even though nature of defendants'
scheme by necessity required them to act within limited time frame of 5 months, because scheme involved multiple
fraudulent stock transactions, multiple fraudulent uses of wires and mail and multiple victims. Sheridan v Weinberger
(1987, MD Pa) 687 F Supp 152.
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18 USCS § 1961
RICO plaintiffs adequately plead pattern of racketeering activity under 18 USCS § 1961(5) by alleging defendants'
involvement in 3 separate predicate acts in connection with cattle feeder investment program scheme, because binding
Fifth Circuit precedent adopted definition of pattern including merely 2 related predicate acts. Babst v Morgan Keegan
& Co. (1988, ED La) 687 F Supp 255, CCH Fed Secur L Rep P 94066.
RICO claim is adequately pled where shareholder alleges corporate principals failed to inform him of corporation's
move and merger, or of his dissenter's and preemptive stock rights, and gives time, place and content of all fraudulent
misrepresentations and omissions, because complaint meets specificity requirement of Rule 9 and pattern requirement
of RICO by alleging at least 4 separate acts of fraud in connection with purchase and sale of securities. Philippe v
Shape, Inc. (1988, DC Me) 688 F Supp 783, CCH Fed Secur L Rep P 94035.
Predicate acts in investors' RICO action under 18 USCS §§ 1961 et seq. consisting of securities broker's sale of five
different limited partnerships on three separate dates do not adequately allege pattern of racketeering. Pincetich v
Jeanfreau (1988, DC Or) 699 F Supp 1469.
There are sufficient allegations of RICO "pattern" under 18 USCS § 1961 in complaint alleging that sellers committed fraud by charging buyer excessive mark-ups in sale of securities, even if buyer is single victim, where essence of
what has been alleged is pattern of fraudulent overcharges which have occurred repeatedly over course of 2 years. Elysian Federal Sav. Bank v First Interregional Equity Corp. (1989, DC NJ) 713 F Supp 737, CCH Fed Secur L Rep P
95217 (criticized in In re Prudential Ins. Co. of Am. Sales Practices Litig. (1996, DC NJ) 975 F Supp 584, CCH Fed
Secur L Rep P 99237).
48.--Single scheme
Corporation failed to allege pattern of racketeering activity in civil RICO action against individuals who issued one
allegedly misleading stock prospectus to 10 investors in initial stock offering, as conduct comprised only single, limited
fraudulent scheme. International Data Bank v Zepkin (1987, CA4 Va) 812 F2d 149, CCH Fed Secur L Rep P 93160.
Plaintiffs alleged pattern of racketeering activity under 18 USCS § 1962 where they alleged that audit confirmation
letters referring to different securities holdings were mailed to them separately and on 3 separate days, since even when
separate mailings arise out of single scheme to defraud, each act of mail fraud is separate predicate RICO offense, and
fact that predicate acts arose out of single scheme provides sufficient relationship as to purposes, victims, and methods
of commission to constitute pattern. First Federal Sav. & Loan Asso. v Oppenheim, Appel, Dixon & Co. (1986, SD
NY) 629 F Supp 427, CCH Fed Secur L Rep P 92505.
Three letters mailed by corporation to foundation offering to purchase its stock in corporation do not constitute
"pattern of racketeering activity" under RICO because letters all pertained to same securities transaction, notwithstanding that each letter might constitute separately indictable mail fraud offense under 18 USCS § 1341. In re Evening
News Asso. Tender Offer Litigation (1986, ED Mich) 642 F Supp 860.
RICO claim brought by Mexican railroad bondholders against bond trustee fails where complaint does not sufficiently allege "pattern of racketeering" since scheme to defraud bondholders and Mexico is only single fraudulent
transaction, selling of collateral for fraudulently low price, and not evidence of ongoing or continuous scheme. Beck v
Manufacturers Hanover Trust Co. (1986, SD NY) 645 F Supp 675, 6 FR Serv 3d 353.
Allegations of churning and consequent claims of mail fraud, wire fraud and securities fraud are sufficient for "pattern of racketeering" in RICO action against broker, despite argument that churning only involves one fraudulent
scheme, though with multiple acts. Bergen v Rothschild (1986, DC Dist Col) 648 F Supp 582, CCH Fed Secur L Rep P
93143.
Investors failed to allege pattern of racketeering activity in securities fraud action where investors were sole victims
of alleged scheme, sole participant was one employee of brokerage firm, allegations involved churning in trading accounts, and there is only one fraudulent scheme arising from one trading contract. Roberts v Smith Barney, Harris
Upham & Co. (1986, DC Mass) 653 F Supp 406, CCH Fed Secur L Rep P 93293.
Investor's RICO claim for alleged fraud in connection with sale of precious metals is dismissed for failure to allege
pattern of racketeering activity where complaint set forth single fraudulent act that defendants sold unregulated commodities that were otherwise required to be regulated. Furry v First Nat'l Monetary Corp. (1986, ED Mich) 686 F
Supp 156.
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Purchaser's RICO complaint alleging individual defendants' alleged security fraud in connection with plaintiff's
purchase of dam constitutes "pattern of racketeering activity" is dismissed where all alleged offenses relate to one
commercial transaction and involve single victim and single injury. Buran Equipment Co. v Hydro Electric Constructors, Inc. (1987, ND Cal) 656 F Supp 864.
Shareholder's RICO claims fail because allegations do not show that preparation and dissemination of allegedly
fraudulent documents, including offer to purchase, proxy statement, and press releases regarding tender offers, constitute pattern of racketeering activity; these multiple acts were part of single scheme necessary to take company private.
Field v Trump (1987, SD NY) 661 F Supp 529, CCH Fed Secur L Rep P 93343, affd in part and revd in part on other
grounds (1988, CA2 NY) 850 F2d 938, CCH Fed Secur L Rep P 93905, 100 ALR Fed 421, cert den (1989) 489 US
1012, 103 L Ed 2d 185, 109 S Ct 1122.
RICO claim is dismissed in action by investor against broker for damages arising out of churning account over
5-year period, where broker contended failure to allege 2 acts constituting pattern but where investor alleged both wire
fraud and securities fraud, because wire fraud claim arose out of telephone communications with stock exchange and
was therefore integral to securities fraud claim, churning is unified offense, broker was sole participant in scheme
against single victim, nothing indicated regular criminal conduct or that activity was likely to occur again, and actions
were not of type contemplated by RICO. Winer v Patterson (1987, DC NH) 663 F Supp 723, CCH Fed Secur L Rep P
93352.
Investor adequately alleges "pattern" of racketeering activity, where he states that insurance company, insurance
broker and insurance consultants committed at least 2 acts of mail fraud and/or securities fraud by promising to insure
investors' money and metals placed in precious metals marketer's "Buy Back, Redelivery, Rebate Program," because in
Second Circuit two acts may satisfy "related and continuous" requirement, even though acts are both in furtherance of
single, continuous scheme to defraud. Connors v Lexington Ins. Co. (1987, ED NY) 666 F Supp 434, CCH Fed Secur L
Rep P 93384.
Investors in bankrupt corporation did not establish "pattern of racketeering activity" by former officers and directors of corporation, and thus summary judgment is granted against investors under 18 USCS § 1961(5), in civil RICO
action, where investors produced no evidence of alleged second racketeering scheme, and there is insufficient evidence
of continuity. Johnson v Schopf (1987, DC Minn) 669 F Supp 291.
Investor failed sufficiently to allege pattern of racketeering activity in securities fraud action involving failed synthetic diamond venture where complaint set forth single scheme to defraud by raising money for venture through predicate acts of sales of bonds and promissory notes, which occurred within relatively brief period of time and presented no
threat of continuing activity. Design Time, Inc. v Synthetic Diamond Technology, Inc. (1987, ND Ind) 674 F Supp
1564, CCH Fed Secur L Rep P 93634.
RICO claim based on alleged securities fraud must fail, where investors allege accounting firm's fraudulent financial audit figures induced them to invest in corporate stock, because scheme involving single victim of single perpetrator does not meet requirement of pattern of racketeering activity. Reliance Ins. Co. v Eisner & Lubin (1988, DC NJ)
685 F Supp 449, CCH Fed Secur L Rep P 93736, affd without op (1990, CA3 NJ) 897 F2d 521 and affd without op
(1990, CA3 NJ) 897 F2d 523.
Investors failed to allege sufficiently pattern of racketeering activity in suit against security firm and employee for
failure to place trading orders in timely fashion, because this case involves 2 victims, 2 injuries, and short-lived scheme
lasting less than 2 months perpetrated by one named individual and 3 corporations, and complaint does not describe
type of criminal activity RICO was designed to arrest. Schwartz v Philadelphia Nat'l Bank (1988, ED Pa) 701 F Supp
92, CCH Fed Secur L Rep P 94309, affd without op (1989, CA3 Pa) 879 F2d 859.
Investor's RICO claim against parent corporation of stock administrator must be summarily dismissed, even though
brokers, during investor's president's 3-month honeymoon, undeniably churned investor's account by unauthorized trading of stock which drastically reduced value of investor's account, because churning was of limited duration and nothing
more than one narrowly circumscribed scheme involving similar predicate acts with one victim suffering one economic
injury. Pyramid Secur., Ltd. v International Bank (1989, DC Dist Col) 726 F Supp 1377, affd (1991, App DC) 288 US
App DC 157, 924 F2d 1114, 18 FR Serv 3d 909, cert den (1991) 502 US 822, 116 L Ed 2d 57, 112 S Ct 85.
49.--Insider trading
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18 USCS § 1961
Acquiring corporation may hold its investment banker, banker's employees, and their tipees liable under RICO for
insider trading in stock of target company. Litton Industries, Inc. v Lehman Bros. Kuhn Loeb, Inc. (1992, CA2 NY) 967
F2d 742, CCH Fed Secur L Rep P 96814, RICO Bus Disp Guide (CCH) P 8034.
Insider trading violations, standing alone, do not constitute pattern of racketeering activity within the meaning of §
1962(c). Abelson v Strong (1986, DC Mass) 644 F Supp 524, CCH Fed Secur L Rep P 93112.
50. Tax
Mailing of 9 fraudulent state tax returns over 9 month period constitutes pattern of racketeering activity. Illinois
Dep't of Revenue v Phillips (1985, CA7 Ill) 771 F2d 312 (ovrld in part as stated in CIB Bank v Esmail (2004, ND Ill)
2004 US Dist LEXIS 26817).
District Court properly denied defendant's motion for summary judgment, although 2 schemes in RICO action involved different investors, since use of business instructional video cassette tapes, alleged promises of tax benefits, and
alleged inflated appraisals which led to IRS denial of tax benefits created degree of similarity between 2 schemes.
Durham v Business Management Associates (1988, CA11 Ala) 847 F2d 1505, CCH Fed Secur L Rep P 93808, 11 FR
Serv 3d 713 (criticized in United States ex rel. Wilkins v North Am. Constr. Corp. (2000, SD Tex) 101 F Supp 2d 500).
Failure to charge defendant with conspiracy to commit specific crime under 26 USCS § 7206 rather than conspiracy
to defraud under 18 USCS § 371 was not improper where defendant's conduct spanned 20 year period and involved
far-reaching activities and events. Alexander v Thornburgh (1991, CA8 Minn) 943 F2d 825, 91-2 USTC P 50550, 68
AFTR 2d 5734, reh, en banc, den (1991, CA8) 1991 US App LEXIS 25566 and vacated on other grounds, remanded
(1993) 509 US 544, 125 L Ed 2d 441, 113 S Ct 2766, 93 CDOS 4813, 93 Daily Journal DAR 8156, 21 Media L R 1609,
7 FLW Fed S 621, reh den (1993) 510 US 909, 126 L Ed 2d 244, 114 S Ct 295, on remand, remanded (1994, CA8 Minn)
32 F3d 1231.
Government did not show that defendant violated 18 USCS § 1961, and defendant's sentence for failing to file corporate tax return therefore cannot be increased under Sentencing Guidelines, where government did not establish that
defendant possessed necessary intent; defendant pleaded guilty only to "participating" in scheme, as stated in information, but court relied on indictment, which is not evidence of offense committed, to show defendant violated § 1961.
United States v Hagedorn (1994, CA10 Kan) 38 F3d 520, 74 AFTR 2d 6826, 94 TNT 221-8.
Defendant car manufacturer did not commit predicate act of fraud by using one of 2 standards of horsepower
measurement permitted by Puerto RICO law prior to change in law to one standard, and thereby "taking advantage of
loophole in tax law" reducing one's tax burden with methods not prohibited by law does not constitute fraud. Bonilla v
Volvo Car Corp. (1998, CA1 Puerto Rico) 150 F3d 62, RICO Bus Disp Guide (CCH) P 9537, cert den (1999) 526 US
1098, 143 L Ed 2d 670, 119 S Ct 1574.
Action by several European nations against tobacco companies alleging violations of Racketeer Influenced and
Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq., was properly dismissed pursuant to Fed. R. Civ. P.
12(b)(6) on ground that revenue rule barred RICO suit brought by foreign sovereigns to enforce their tax laws; subsequent Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
(USA PATRIOT) Act of 2001, Pub. L. No. 107-56, 115 Stat. 272, and its legislative history did not constitute clear evidence of Congressional intent necessary to find that Congress had abrogated revenue rule. European Cmty. v RJR
Nabisco, Inc. (2004, CA2) 355 F3d 123, vacated, remanded, cert gr (2005, US) 161 L Ed 2d 845, 125 S Ct 1968.
Yacht buyer's RICO claim against seller cannot stand, where underlying predicate acts proved at trial concerned
single scheme to defraud state tax authority and buyer by evading payment of sales tax on yacht, because single scheme
to defraud two victims is not pattern of racketeering activity and does not give rise to RICO violation. Bosteve, Ltd. v
Marauszwski (1986, ED NY) 642 F Supp 197.
Purchaser of all of corporation's outstanding capital stock properly alleges pattern of racketeering activity, in civil
RICO action against attorneys for organizers of sale, where complaint alleges (1) organizers failed to disclose corporation's liability for unpaid and unreported taxes, interest, and penalty charges and (2) attorneys made misrepresentations
to purchasers, because complaint can be construed as claiming that attorneys participated in corporation's ongoing
scheme to evade taxes by facilitating sale of corporation's stock, notwithstanding attorneys' argument that alleged predicate acts were committed over short period of time and in furtherance of single alleged objective, sale of corporation's
stock. Gerson v Rapoport (1987, ND NY) 651 F Supp 395.
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Buyers of limited partnership units fail to state claim against sellers' attorneys under 18 USCS § 1961(1), where allegations of attorneys' wrongdoing focus on issuance of single tax opinion letter included in offering circular, because
there is no allegation of ongoing criminal activity or series of fraudulent transactions and, thus, no pattern of racketeering activity. Norman v Brown, Todd & Heyburn (1988, DC Mass) 693 F Supp 1259, CCH Fed Secur L Rep P 93914.
Forgery of company president's name to tax returns does not constitute predicate act for RICO liability, where
company hired president's first cousin as its accountant who then forged president's signature to state and federal tax
returns he filed late, because no injury flowed from forgeries since tax penalties were incurred solely as result of late
filing. Zee-Bar, Inc. v Kaplan (1992, DC NH) 792 F Supp 895, RICO Bus Disp Guide (CCH) P 8103.
In class action against bank, and tax return services, alleging, inter alia, violations of Truth In Lending Act, 15
USCS § 1601 et seq., and Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1961 et seq., proposed settlement agreement was not approved where class counsel were inadequate representatives of class because they failed to
sustain their burden of showing that proposed settlement agreement was fair, class counsel did not have discovery necessary to provide serious analysis of chances of recovery on any theory, class counsel never attempted to obtain any
meaningful discovery, class counsel's submissions in support of settlement focused on only certain favorable decisions,
there were various classes included in settlement that did not seem appropriate, one defendant was included without
additional compensation to class, and there was meeting between certain class counsel and counsel for bank and tax
return services before suits were filed discussing potential settlement figures. Reynolds v Beneficial Nat'l Bank (2003,
ND Ill) 260 F Supp 2d 680.
Employee's claim against his employer for failing to honor his contention that he was entitled to have no withholding from his pay did not state claim under Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS §
1961 et seq; to extent that employee was alleging that his employer attempted to collect unlawful debt, his disputed tax
obligations did not fall within RICO's statutory definition of unlawful debt, 18 USCS § 1961(6). Giles v Volvo Trucks N.
Am. (2008, MD Pa) 551 F Supp 2d 359, 2008-1 USTC P 50272, 101 AFTR 2d 1512.
Unpublished Opinions
Unpublished: Defendants, township and township manager, were properly granted summary judgment in property
owner's action alleging that defendants violated Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS
§§ 1961, 1964(c), by overcharging her property tax for over 30 years because township was municipal corporation and
was, thus, immune to RICO claims under 18 USCS § 1964(c), and there was no evidence that manager committed any
"racketeering activity" under 18 USCS § 1961(1). Heinemeyer v Twp. of Scotch Plains (2006, CA3 NJ) 2006 US App
LEXIS 24899.
51. Trade practices
Claim in civil RICO action by regional pay-TV service supplier that national supplier made fraudulent representations leading up to single contract between regional and national suppliers and single transfer of negotiations for purchase of third supplier from regional supplier to national supplier failed to allege pattern of racketeering activity. Skycom Corp. v Telstar Corp. (1987, CA7 Wis) 813 F2d 810.
Cable TV corporation's RICO action is dismissed for failure to allege pattern of racketeering activity where rival
franchise bidders used mail on at least four occasions to deliver documents to third party District of Columbia and such
activity was all related to single alleged scheme to defraud District of Columbia. District Telecommunications Dev.
Corp. v District Cablevision, Inc. (1985, DC Dist Col) 638 F Supp 418.
RICO claims allege sufficient "racketeering activity" to survive summary judgment because "one episode of racketeering activity thus may equal one act involving criminal activity" and complaint, involving scheme to misappropriate
ideas, alleges more than 2 prohibited acts separated by time and space. Perfection Corp. v Dresser Industries, Inc.
(1986, WD Pa) 641 F Supp 782.
Complaint sufficiently alleges timing and "continuity plus relationship" requirements for alleging pattern of racketeering activity under 18 USCS § 1961(5) to withstand motion to dismiss, in action by developer against corporate
manufacturers and sellers of mortar additive, where (1) complaint alleges initial predicate act occurred after applicable
date and then numerous additional predicate acts occurred, but does not specifically aver that second act occurred within
10 years of first act, (2) developer's brief clarifies timing of predicate acts, and (3) alleged series of racketeering acts
applies to single alleged objective; developer will be allowed to amend complaint to set forth date of alleged second act
of racketeering. Moravian Dev. Corp. v Dow Chemical Co. (1986, ED Pa) 651 F Supp 144.
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18 USCS § 1961
Corporation and shareholders sufficiently allege pattern of racketeering activity when complaint stated number of
mail and wire fraud violations in furtherance of scheme to secure confidential information of corporation's business.
Metropolitan International, Inc. v Alco Standard Corp. (1986, MD Pa) 657 F Supp 627, CCH Fed Secur L Rep P
93725.
Summary judgment is granted to corporation, subsidiary owning minimarket chain, and corporation officer in RICO action by minimarket supplier asserting that corporation, subsidiary, and officer acted in concert with competitor to
force supplier to go out of business, where alleged conspiracy began in summer and last predicate act took place in fall
of same year, because predicate acts did not last long enough to constitute substantial period of time to establish pattern
and because activity involved single scheme against single victim. Chronister v Atlantic Richfield Co. (1987, MD Pa)
653 F Supp 1576, 1987-1 CCH Trade Cases P 67506.
Former manufacturer's RICO action adequately alleges predicate acts demonstrating both continuity and relationship in order to constitute pattern of racketeering activity, where (1) alleged acts of mail and wire fraud were committed
during 8-month time frame, (2) former manufacturer, its sole shareholder, and employees were intended victims, (3)
mail and wire fraud represent similar type of misconduct, (4) alleged acts occurred multiple times, and (5) separate
schemes consisted of competitors calling manufacturer's customers or electronically transferring manufacturer's funds to
competitor's account. Horwitz v Alloy Automotive Co. (1987, ND Ill) 656 F Supp 1039.
Football bladder manufacturer's RICO claims are dismissed, where bladder manufacturer's allegations that football
manufacturer's fraudulent misrepresentations via interstate mail and wires constitute racketeering activity do not show
pattern of racketeering activity where they consist of single scheme to defraud single victim and thus lack continuous
activity at which RICO is aimed. Fabrico Mfg. Corp. v Wilson Sporting Goods Co. (1987, ND Ill) 660 F Supp 601.
Motion to dismiss RICO claims is denied where amended complaint adequately alleges pattern of racketeering
where numerous acts of commercial bribery and mail fraud in defrauding company of commissions and another company of sales are alleged; even assuming there is single scheme to obtain improper competitive advantage, scheme implies continued activity to maintain such advantage and all acts are closely related to alleged fraudulent schemes, creating sufficient RICO violation. O'Connor v Midwest Pipe Fabricators, Inc. (1987, DC Kan) 660 F Supp 696.
Corporation's RICO claims are dismissed, because alleged wire and mail fraud violations relating to marketing of
weight-loss product were limited to single fraudulent scheme, since withdrawal of weight-loss product from market
would end alleged scheme and thus there is insufficient "pattern of racketeering." Franklin & Joseph, Inc. v Continental
Health Industries, Inc. (1987, SD NY) 664 F Supp 719.
Plaintiffs' amended complaints state RICO claims which survive dismissal, where complaints allege claims arising
from defendant's marketing of 2 different product lines in saran latex family line of products, because complaints now
allege at least 2 fraudulent schemes in defendant's efforts to market 2 distinct lines of products, and thus adequately
allege "pattern" of racketeering activity under Tenth, Eighth, Sixth and Third Circuit law. In re Dow Co. "Sarabond"
Prods. Liab. Litig. (1987, DC Colo) 666 F Supp 1466.
Watch importer alleging defendants falsely secured right to bar importer of brand name watches has met pattern
requirement of 18 USCS § 1961(5), where purpose of scheme is to bar importation of watch brand whenever anyone
other than defendant intends to import them and scheme has no obvious terminating goal or date. Shaw v Rolex Watch,
U.S.A., Inc. (1987, SD NY) 673 F Supp 674, 1987-2 CCH Trade Cases P 67787 (criticized in N.B. Garments (PVT.) Ltd.
v Kids Int'l Corp. (2004, SD NY) 2004 US Dist LEXIS 3774).
Pattern of racketeering activity is not alleged, and thus claim is not stated against officers of ice cream manufacturing company and company under 18 USCS § 1961(1) in action by second ice cream manufacturer, where at best complaint alleges completed scheme for first company to defraud second company and keep profits from joint venture, but
fails to allege acts from which "threat" of "continuing" crime can be inferred, notwithstanding that there are allegations
of numerous racketeering acts. La Delite, Ltd. v Chipwich, Inc. (1988, ED NY) 691 F Supp 613.
Long distance telephone company's complaint fails to state RICO cause of action, where company alleges, at most,
ongoing effort by single corporation to misappropriate its long distance customers, and recites facts showing only 6
customers misappropriated by improper conduct over 5-month period, because complaint fails to allege legally sufficient 18 USCS § 1961(5) pattern of racketeering activity. Long Distance Service, Inc. v MCI Telecommunications
Corp. (1988, DC Dist Col) 692 F Supp 1402.
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Allegations that competing corporation engaged in 4 fraudulent acts directed at accomplishing single purpose of restraining individual from working in sales force with another company do not meet pattern requirement because predicate acts, if proven, show only single episode of wrongdoing. Pillar Corp. v Enercon Industries Corp. (1988, ED Wis)
694 F Supp 1353, 1988-1 CCH Trade Cases P 67998.
Travel agency's RICO claim against former customer and others must be dismissed, where only alleged predicate
acts are wire fraud and mail fraud in connection with competitor's securing of contract with customer, because no pattern of racketeering activity is apparent from allegations of complaint. McEvoy Travel Bureau, Inc. v Heritage Travel,
Inc. (1989, DC Mass) 721 F Supp 15, affd (1990, CA1 Mass) 904 F2d 786, cert den (1990) 498 US 992, 112 L Ed 2d
546, 111 S Ct 536 and (criticized in United States v Blumeyer (1997, CA8 Mo) 114 F3d 758).
Civil racketeering claim is not stated under 18 USCS § 1962(c), where alleged scheme of cable television affiliate
to interfere with cable network's subscribers lasted only 3 1/2 months, involved relatively few participants, and no continuing activity is alleged. USA Network v Jones Intercable, Inc. (1990, SD NY) 729 F Supp 304.
Competitors' alleged conduct of manufacturing and marketing self-propelled crop sprayer using manufacturer's
trade secrets posed no threat of future repetition to manufacturer, and such conduct, therefore, did not constitute
open-ended continuity of competitors' related predicate acts as would establish continued criminal activity under 18
USCS § 1961(5), where competitors had been enjoined from selling, marketing, or displaying its sprayer. Walker Mfg. v
Hoffmann, Inc. (2001, ND Iowa) 157 F Supp 2d 1012, RICO Bus Disp Guide (CCH) P 10095.
In action brought by plaintiff U.S. against defendant tobacco companies under 18 USCS § 1962(c), (d), tobacco
companies were permanently enjoined from committing any act of racketeering, as defined in 18 USCS § 1961(1), relating in any way to manufacturing, marketing, health consequences, or sale of cigarettes in U.S., and were ordered to
publish and disseminate corrective statements and include statements in cigarette packaging. United States v Philip
Morris USA, Inc. (2006, DC Dist Col) 449 F Supp 2d 1.
Where injunction in favor of plaintiff U.S. enjoined defendant tobacco companies from any act of racketeering as
defined in 18 USCS § 1961(1), given extensive findings and conclusions, and 9-month trial record, more than sufficient
notice under Fed. R. Civ. P. 65(d) of prohibited conduct was given and no clarification or relief from order under Fed.
R. Civ. P. 52, 59, 60, was warranted. United States v Philip Morris USA, Inc. (2007, DC Dist Col) 477 F Supp 2d 191.
52. Unlawful debt collection
Alleged acts of majority shareholder in making several secret withdrawals from corporate income in attempt to
have loans he had made to corporation repaid out of company funds, with repayments to continue until loans were repaid with interest, had single objective and thus did not constitute pattern of racketeering activity. Garbade v Great
Divide Mining & Milling Corp. (1987, CA10 Colo) 831 F2d 212.
Bank was entitled to summary judgment on borrower's claim that bank's delay in crediting money to loan violated
RICO, where bank did not act surreptitiously and deceit was not material. Mid-State Fertilizer Co. v Exchange Nat'l
Bank (1989, CA7 Ill) 877 F2d 1333, 1989-1 CCH Trade Cases P 68626, 13 FR Serv 3d 1407.
Inventor's RICO claim against his business "partners" is dismissed, where inventor acquired short-term, high interest loans from each of 3 defendants in order to develop his school bus safety system, and inventor alleges defendants'
enterprise engaged in pattern of collection of unlawful debts from which it derived income and acquired control of 2
corporations and plaintiff's invention, because underlying allegations of fraud and conspiracy to defraud plaintiff fail
under Rule 9(b) for lack of specification of misrepresentation, and discovery should not be allowed here since inventor's
RICO complaint lacks legal basis rather than factual support. Herring v Vadala (1987, DC Mass) 670 F Supp 1082.
Borrower's RICO claim against lender bank fails to allege pattern of racketeering activity and is dismissed with
leave to amend under Rule 15(a)--with warning that if third attempt to state sound RICO claim fails plaintiff and his
attorney can expect imposition of substantial sanctions--where complaint alleges bank deceived several bank customers
by applying excessive interest rates, yet alleges injury only to plaintiff, because it appears plaintiff may be attempting to
create federal jurisdiction by styling his state law claim for charging excessive interest rates as RICO violation under 18
USCS § 1962. Miller v Moffat County State Bank (1988, DC Colo) 678 F Supp 247.
Court upheld magistrate judge's imposition of sanctions on ground that plaintiffs' claims under Racketeering Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961, and Sherman Act, 15 USCS § 2, were not
well-grounded because there was no objectively reasonable basis to conclude, as plaintiffs asserted in their complaint,
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that defendants violated RICO (i) by attempting to collect "unlawful debt" or (ii) by engaging in "pattern of racketeering
activity," as those terms were defined in statute, 18 USCS § 1961, and plaintiffs' claim of attempted monopolization
under Sherman Act was similarly unreasonable because it was not likely that there was dangerous probability of defendants' successful monopolization of Internet services. Joseph Giganti Veritas Media Group, Inc. v Gen-X Strategies,
Inc. (2004, ED Va) 222 FRD 299, 2004-2 CCH Trade Cases P 74500.
53. Miscellaneous
Pattern of racketeering activity can be ascribed to situation of two isolated sales where such 2 violations fit plain
language of 18 USCS § 1962. United States v Gottesman (1984, CA11 Fla) 724 F2d 1517, 222 USPQ 206, 15 Fed
Rules Evid Serv 98, reh den (1984, CA11 Fla) 729 F2d 1468.
"Pattern of racketeering activity" is not established where it is not alleged that defendants defrauded victims other
than plaintiff with similar racketeering activity and did not allege that plaintiff had been defrauded more than once by
defendants through similar racketeering acts. Marks v Pannell Kerr Forster (1987, CA7 Ill) 811 F2d 1108.
Complaint in civil RICO action arising out of county sheriff's emergency wrecker requirements, mandating that
only members of county wrecker association would be permitted to tow vehicles from public property, sufficiently alleged pattern of racketeering activity, as it claimed not only violations of 18 USCS §§ 1951 and 1952, but also litany of
other, arguably criminal, predicate acts involved in formation, organization, and operation of association. Cowan v
Corley (1987, CA5 Tex) 814 F2d 223, 1987-1 CCH Trade Cases P 67527.
Evidence that defendant engaged in at least 13 acts of fraud, which were clearly related, and had similar purposes,
results, participants, victims, and methods of commission, established pattern of racketeering activity for purposes of
civil RICO action. TeleVideo Systems, Inc. v Heidenthal (1987, CA9 Cal) 826 F2d 915, 8 FR Serv 3d 989.
"Pattern" of racketeering activity may include forbearance; defendant police officer's forbearance from arresting
drug dealers in return for cocaine constituted predicate acts within meaning of RICO. United States v Ruiz (1990, CA1
Mass) 905 F2d 499.
With respect to individual who ran escort service which was front for prostitution and who was convicted of conspiracy and money laundering, Missouri prostitution statute formed basis for violation of 18 USCS § 1952, which is
type of racketeering activity listed in 18 USCS § 1961, and is specified unlawful activity designated in money laundering statute, 18 USCS § 1956. United States v Montague (1994, CA7 Ill) 29 F3d 317.
Even assuming that filing of frivolous lawsuits may constitute RICO extortion in some instances, plaintiffs did not
make out kind of pattern that posed threat of continued criminal activity where all suits arose from single dispute; mere
fact that separate proceedings were instituted does not convert what amounts to single episode into pattern. Gonzalez-Morales v Hernandez-Arencibia (2000, CA1 Puerto Rico) 221 F3d 45.
District court erred in granting fungicide manufacturer's Fed. R. Civ. P. 12(c) motion for judgment on pleadings in
civil action under 18 USCS §§ 1962(c), 1964(c), which was filed by commercial nurserymen who alleged that manufacturer fraudulently withheld evidence in underlying product liability litigation in order to induce settlement; claims
were not based on immune litigation conduct because 18 USCS § 1961(1)(B) provided that conduct relating to prior
litigation might constitute racketeering activity, including act indictable under 18 USCS § 1512, which related to tampering with witness, victim, or informant. Living Designs, Inc. v E.I. DuPont de Nemours & Co. (2005, CA9 Hawaii)
431 F3d 353.
Dismissal of Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS §§ 1961 et seq., action based
on defendants alleged hiring and/or harboring undocumented workers was affirmed because county could not rely on
expenditures alone to establish civil RICO standing, and there was no indication that county held property interest in
law enforcement or health care services that it provided to public and could not show that alleged RICO violations
proximately caused its injuries. Canyon County v Syngenta Seeds, Inc. (2008, CA9 Idaho) 519 F3d 969.
Plaintiffs sufficiently alleged "pattern of racketeering activity" under RICO (18 USCS §§ 1961 et seq.) where they
alleged that defendants engaged in numerous acts of "racketeering activity" which were continuous over identified period of time and which were related to one another in furtherance of alleged fraudulent scheme, satisfying continuity
plus relationship standard. Trak Microcomputer Corp. v Wearne Bros., Inc. (1985, ND Ill) 628 F Supp 1089.
"Pattern of racketeering" is alleged where 5 sham corporations were established to defraud complainant and others.
United Air Lines, Inc. v CEI Industries, Inc. (1987, ND Ill) 664 F Supp 1216.
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RICO charges against former corporate president state sufficient pattern and continuity allegations, where allegations are that he, for 2 1/2 years, submitted fraudulent personal expense claims and approved other employee's fraudulent personal expense claims, and that corporate accountants concealed these activities. Donnkenny, Inc. v Nadler
(1989, SD NY) 712 F Supp 429.
RICO claims against 4 transit authority police officers will not be dismissed, where claims are part of civil rights
class action arising out of apparent pattern of seemingly race-based false arrests, because claim adequately alleges
fraudulent use of mails and wires in furtherance of scheme to obtain money and property in form of job promotions,
benefits and other rewards. Yeadon v New York City Transit Authority (1989, SD NY) 719 F Supp 204.
Ousted shareholder of family companies fails to state RICO claim against brother and sister who summarily prevented him from performing his duties as corporate officer and then created new companies and merged them with old
companies to buy out shareholder by force, where shareholder alleges siblings' scheme comprised acts of mail and securities fraud and other illegal acts, because other illegal acts alleged amount at best to state law civil wrongs, acts of mail
and securities fraud are questionably pled and do not fulfill pattern requirement, and alleged actions of brother and sister
cannot amount to racketeering activity within meaning of 18 USCS § 1961. Ferdinand Drexel Inv. Co. v Alibert (1989,
ED Pa) 723 F Supp 313, CCH Fed Secur L Rep P 94942, affd without op (1990, CA3 Pa) 904 F2d 694, cert den (1990)
498 US 856, 112 L Ed 2d 120, 111 S Ct 154.
Civil racketeering claim fails under 18 USCS § 1961 where investors claim only that 3 alleged predicate acts were
committed by financial advisor and acts were not related to each other in common scheme, because pattern of racketeering activity does not exist. Halperin v Jasper (1989, ED Pa) 723 F Supp 1091.
Defeated state candidate for lieutenant governor may not proceed with RICO claim against elected governor and
lieutenant governor based on alleged violations of state campaign financing law, because governor could not run for
third term and fraudulent scheme involving unlawful funneling of funds from governor to lieutenant governor during
8-month campaign was for closed-ended period and was unlikely to continue in future. Hindes v Castle (1990, DC
Del) 740 F Supp 327, affd (1991, CA3 Del) 937 F2d 868 and (superseded by statute as stated in Young v West Coast
Indus. Relations Ass'n (1992, DC Del) 144 FRD 206).
Claim of former employee against former employer is not dismissed for failure to state claim, where employee alleged that employer conducted affairs of 2 corporations through pattern of racketeering activity designed to extort sexual favors from employee by threatening her financial prospects as employee, because even though employer's acts of
harassment shared one common purpose (sex), his conduct would have been capable of endless repetition, and it is
therefore reasonable to view constituent acts of scheme as separate predicate acts; therefore, employee sufficiently alleged pattern of racketeering activity. Sharpe v Kelley (1993, DC Mass) 835 F Supp 33, 63 BNA FEP Cas 446, 63
CCH EPD P 42818, RICO Bus Disp Guide (CCH) P 8473.
RICO claim by participants in employee stock ownership program against individual shareholders of defendant
employer is denied summarily, because although complaint alleges that individual defendants committed various acts of
fraud, record contains no evidence to support allegations, so plaintiffs failed to prove that individuals committed any act
of racketeering activity as defined in 18 USCS § 1961(1). Francis v Riverside Medical Servs. (1995, MD Ga) 878 F
Supp 223, CCH Fed Secur L Rep P 98862, RICO Bus Disp Guide (CCH) P 8895, affd without op (1996, CA11 Ga) 79
F3d 1159 and affd without op (1997, CA11 Ga) 113 F3d 1250, reported at (1997, CA11 Ga) 113 F3d 1250.
Claims under Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1961 et seq. were dismissed where
plaintiff, whose ex-husband's forged note and mortgage on plaintiff's home, failed to allege predicate acts or pattern of
continuing of racketeering activity with sufficient particularity pursuant to Fed. R. Civ. P. 9(b) against various defendants who were allegedly involved with securing note and mortgage on home. Welch v Centex Home Equity Co., L.L.C.
(2004, DC Kan) 323 F Supp 2d 1087.
Where arrestees were arrested for obstructing police officers' legal duties and where arrestees alleged that they were
kidnapped and robbed on two occasions and that defendants committed "extortion" by threatening to arrest them, arrestees' claims under Racketeer Influenced Corrupt Organizations Act, 18 USCS § 1961 et seq., failed to survive summary judgment because allegations were insufficient to constitute pattern of racketeering activity. McCormick v City of
Lawrence (2004, DC Kan) 325 F Supp 2d 1191.
Photographer had alleged willful infringement which supported claim of criminal copyright infringement, which in
turn was predicate act as required for his RICO claim. Peter Rosenbaum Photography Corp. v Otto Doosan Mail Order,
Ltd. (2005, ND Ill) 76 USPQ2d 1759.
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Citizen was entitled to class certification under Fed. R. Civ. P. 23(a), (b)(2), and (b)(3) in his RICO and civil rights
action against village, its officials, and its employees where: (1) proposed class was sufficiently numerous as at least
800 people had been defendants in village court; (2) citizen and proposed class shared common and typical question of
whether village, officials, and employees were authorized to enforce state traffic laws in manner they did; (3) citizen's
counsel were adequate representatives; (4) village, officials, and employees were alleged to have acted on grounds generally applicable for class, thereby making appropriate final class injunctive and declaratory relief under Rule 23(b)(2);
and (5) common class questions predominated under Rule 23(b)(3) because core question concerned authority of village, officials, and employees to enforce state traffic laws in manner they did. Coco v Inc. Vill. of Belle Terre (2005, ED
NY) 233 FRD 109.
Where investors lost money in fraudulent transactions orchestrated by agents of underwriter's subsidiary, claims
under 18 USCS § 1962(c) and Utah Code Ann. § 76-10-1603(2) failed to survive summary judgment because, inter alia,
there was no evidence that subsidiary engaged in pattern of racketeering activity under 18 USCS § 1961(5) since frauds
in which investors lost their money and clean-up activities of defendants were unrelated and not continuous. Albright v
Attorney's Title Ins. Fund (2007, DC Utah) 504 F Supp 2d 1187.
Unpublished Opinions
Unpublished: Summary judgment was granted to county in property dispute because there was no evidence that
county engaged in racketeering activity when it removed electrical meters, destroyed boat, failed to issue occupancy
permits, and razed structure. Abele v Hernando County (2005, CA11 Fla) 161 Fed Appx 809.
Unpublished: Appellant's civil RICO action under 18 USCS § 1964 against attorney for third party who filed quiet-title action involving appellant was properly dismissed upon summary judgment; appellant did not show, as required
under 18 USCS § 1961, that attorney engaged in pattern of racketeering activity where appellant only alleged one predicate act by attorney, and that act--intentional service by publication--was actually attributable to attorney. Wilson v
Bush (2006, CA11 Ga) 2006 US App LEXIS 22961.
Unpublished: Defendant's 400-month sentence for violating 18 USCS § 1961(1) and (5) was affirmed because district court did not error in departing upwardly from high-end U.S. Sentencing Guidelines sentence of 327 months to
imposed sentence of 400 months under USSG § 5K2.14 based on danger defendant's crimes created for public; defendant had shot at rival gang members on public streets and had been involved in interstate chase and shoot-out with rival
gang members. United States v Romero (2007, CA11 Ga) 2007 US App LEXIS 20494.
54.--Continuity
In order to establish "pattern of racketeering activity" which would support RICO conviction, it must be established
that criminal acts were continuous, or that there was a threat of continuing activity; where single scheme at issue involved one victim, a corporation, and single goal, recovery of secret profits through self-dealing in selling real property
to corporation, continuity was not established, notwithstanding that sales of property took place over extended period of
time. Torwest DBC, Inc. v Dick (1987, CA10 Colo) 810 F2d 925, CCH Fed Secur L Rep P 93106.
Continuity necessary for RICO pattern of racketeering activity does not require showing that defendant engaged in
more than one scheme or criminal episode, but circumstances of case must suggest that predicate acts indicate threat of
continuing activity; thus, alleged misrepresentations by television broadcaster which induced competitor to enter into
joint venture to acquire rights to and sell telecast to pay and cable television stations did not constitute pattern of racketeering activity sufficient to support civil RICO claim, since all of broadcaster's alleged assertions were part of its single effort to induce competitor to form joint venture to obtain broadcast rights from promoters. Medallion Television
Enters. v SelecTV of Cal. (1987, CA9 Cal) 833 F2d 1360, cert den (1989) 492 US 917, 106 L Ed 2d 588, 109 S Ct 3241.
Continuity requirement of RICO claim was not met where acts alleged constituted closed-ended series of predicate
acts forming single scheme to accomplish one discreet goal with no open-ended threat of future illegal activity.
Sil-Flo, Inc. v SFHC, Inc. (1990, CA10 Okla) 917 F2d 1507 (criticized in Turnbull v Missouri Pac. R.R. Co. (1991, WD
Okla) 1991 US Dist LEXIS 21675).
District court properly granted motion to dismiss action under Racketeer Influenced and Corrupt Organizations Act
(RICO), 18 USCS § 1961 et seq., arising from actions of individuals and attorney to levy execution on antecedent
state-court tort judgment against physician; complaint failed to allege any threat of continuing illegal activity involving
allegedly fraudulent mail, fax, and telephone communications and actions were finite in nature because they would
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cease when outstanding tort judgment was collected. Turner v Cook (2004, CA9 Cal) 362 F3d 1219, cert den (2004,
US) 160 L Ed 2d 371, 125 S Ct 498.
Facts alleged did not establish continuity required to prove pattern of racketeering activity; plaintiffs alleged neither
closed-ended nor open-ended pattern of racketeering activity; alleged predicate acts spanned period of no more than
sixteen months, period of insufficient length to demonstrate closed-ended continuity under instant court's precedents;
enterprise fell into category that was primarily legitimate given that joint venture between partner and agency managed
over one thousand successful adoptions during ten-year period predating dispute and complaint alleged only serious, but
discrete and relatively short-lived scheme to defraud handful of victims, which was insufficient to establish open-ended
continuity. Spool v World Child Int'l Adoption Agency (2008, CA2) 520 F3d 178.
Civil racketeering claim is not stated under 18 USCS § 1961(5), where complaint alleges fraud in connection with
threatened proxy contest in now-aborted attempt to gain managerial control of company, because alleged predicate acts
are closed-ended and thus are not "pattern" of racketeering activity. Southmark Prime Plus, L.P. v Falzone (1991, DC
Del) 776 F Supp 888, CCH Fed Secur L Rep P 96448.
Independent administrator appointed by court to oversee remedial provisions of consent decree in action by government against union has authority to veto union actions he reasonably believes constitute act of racketeering pursuant
to 18 USCS § 1961. United States v International Bhd. of Teamsters (1992, SD NY) 147 FRD 24, 144 BNA LRRM
2718, 123 CCH LC P 10393.
Airline's RICO action arising out of defendants' refusal to return airline's security deposits on aircraft under aircraft
lease agreements is dismissed, where airline made only generalized, not factual, allegations upon information and belief
that alleged racketeering activity was continuous, airline specified no actions that appeared to be criminal, and alleged
scheme to defraud airline of its security deposits was accomplished once funds were commingled with lessor's general
funds, because airline failed to alleged facts showing threat of continuing racketeering activity and facts that support
inference that acts of racketeering activity were neither isolated nor sporadic. Thai Airways Int'l v United Aviation
Leasing B.V. (1994, SD NY) 842 F Supp 1567, RICO Bus Disp Guide (CCH) P 8492.
Motion to dismiss was granted to partnership on plaintiffs' claims that partnership illegally converted six checks
that were meant for purchase of money orders for its own use, and thus, violated Racketeer Influenced and Corrupt
Practices Act, 28 USCS §§ 1961, 1962, because actions alleged by plaintiffs did not constitute continuous pattern of
illegal activity when activity took place with six checks during period of one week. Soto-Negron v Taber Partners I,
Ltd. P'ship (2002, DC Puerto Rico) 235 F Supp 2d 105, RICO Bus Disp Guide (CCH) P 10389, affd (2003, CA1 Puerto
Rico) 339 F3d 35.
In action in which juvenile and his father alleged that police officer who obtained warrant for minor's arrest influenced testimony of minor victim and conspired with detectives to influence testimony of other minor witnesses, claims
that juvenile and his father filed under 18 USCS §§ 1962(c) and (d) and 1964(c), part of RICO Act, suffered from number of fatal flaws because (1) there was no evidence that officer engaged in predicate act by improperly influencing or
attempting to improperly influence anyone within meaning of 18 USCS § 1512(b), (2) there was no evidence that officer
and detectives entered into agreement to violate RICO Act's substantive provisions, (3) pattern of racketeering, as defined in 18 USCS § 1961, was not established where there were no other victims of alleged racketeering activity, officer
had retired from police department, and there was no allegation of continued threat to constitutional rights of others, and
(4) alleged damage to reputation and emotional well-being did not constitute injury to business or property; accordingly,
officer was entitled to summary judgment. Justin F. v Maloney (2007, DC Conn) 476 F Supp 2d 141.
RICO claims were sufficiently alleged in defendant's indictment because pattern of racketeering activity was adequate under 18 USCS §§ 1962(c), 1961(5) because allegations satisfied continuity plus relationship, common purpose of
enriching members and associates of enterprise through prostitution was expressed, and predicate offense was alleged
under Travel Act, 18 USCS § 1952. United States v Palfrey (2007, DC Dist Col) 499 F Supp 2d 34.
55.--Single scheme or episode
Plaintiff failed adequately to allege pattern of racketeering activity where all that he alleged was that each defendant made fraudulent misrepresentations in order to accomplish sale, which representations amounted to at least 12 separate acts of mail fraud since simply alleging racketeering acts is not enough to allege RICO (18 USCS §§ 1961 et seq.)
pattern and since there must be some indication of threat of continuing activity by defendants, not just one instance of
fraud with single victim. Lipin Enters. v Lee (1986, CA7 Ill) 803 F2d 322.
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Claim that former officers and owners of defunct corporation engaged in check kiting scheme, diverted corporate
assets, and defrauded creditors by distributing false financial statements failed to allege pattern of racketeering activity
for purposes of civil RICO action, even though predicate acts were sufficiently related to form pattern, since acts constituted mere subdivisions of one fraudulent scheme to keep corporation afloat in order to loot it. Madden v Gluck
(1987, CA8 Mo) 815 F2d 1163, cert den (1987) 484 US 823, 98 L Ed 2d 48, 108 S Ct 86.
Allegations by limited partner concerning general partners' transfer of land to third party showed only single
scheme by general partners to wrongfully deprive limited partners of their interest in partnership, although alleged acts
occurred over number of years and were directed against several individuals and entities comprising limited partnership
interests, and were therefore insufficient to establish pattern of racketeering activity necessary to state RICO claim.
Allright Mo., Inc. v Billeter (1987, CA8 Mo) 829 F2d 631, 9 FR Serv 3d 27.
Existence of RICO pattern is matter of criminal dimension and degree to be dealt with by reference to facts and
circumstances of each particular case, and particular scheme, limited in scope to accomplishment of single discrete objective--forcing out minority in single corporate structure--does not pose sufficient threat of continuing criminal activity
to justify imposition of RICO's extraordinary penalties, since activity engendered by scheme was spread out over time,
it was undertaken merely as means to accomplishment of that single end, and there is nothing to suggest that it would
have continued longer than was necessary to accomplish it. Walk v Baltimore & O. R.R. (1988, CA4 Md) 847 F2d
1100, vacated, remanded (1989) 492 US 914, 106 L Ed 2d 583, 109 S Ct 3235.
Attorney's RICO claim that co-counsel diverted settlement proceeds was properly dismissed, since there was only
one scheme, one victim, and one distinct economic injury, and, most important, there was no threat of continuing illegal
activity. Sutherland v O'Malley (1989, CA7 Ill) 882 F2d 1196, reh den (1989, CA7) 1989 US App LEXIS 13761.
Attorney who alleged scheme to publish 2 isolated, defamatory articles about him on same day did not show
open-ended or closed-ended continuity. Phelps v Wichita Eagle-Beacon (1989, CA10 Kan) 886 F2d 1262 (criticized in
Bryant v Polston (2000, SD Ind) 2000 US Dist LEXIS 16368).
Alleged scheme to defraud plaintiff into delivering releases and letter of apology in exchange for nothing of value
did not create "pattern" under RICO because they were merely parts of "single, unified activity" in furtherance of isolated fraudulent episode. Utz v Correa (1986, SD NY) 631 F Supp 592.
District Court rejected plaintiffs' assertions that defendants engaged in "pattern of racketeering activity" by (1) inducing plaintiffs to raise money for business, (2) inducing investors to place their money in escrow, (3) concealing
premature withdrawal of escrowed funds, and (4) spending escrowed funds where each action served common end of
raising money where plaintiffs did not allege that defendants had engaged in similar schemes and there was no evidence
that particular scheme continued. Richter v Sudman (1986, SD NY) 634 F Supp 234.
Pattern of racketeering activity is not alleged under 18 USCS § 1962(a), in action by philatelic foundation against
employee of foundation and stamp dealers, where alleged scheme is fraudulent alteration of over 220 of foundation's
opinions regarding authenticity of stamps and other philatelic items and subsequent sale of "authenticated" items at inflated prices due to fraudulent certificate, because criminal acts involved are repetitive and relate to single criminal
purpose. Philatelic Foundation v Kaplan (1986, SD NY) 647 F Supp 1344.
Pension plan participants' RICO claim against pension plan managers is dismissed, where participants allege managers violated statute by transferring only bare minimum of assets from main pension plan to separate plans of two employers which broke away from main plan, because single decision of managers to withhold excess assets of main plan
was, at best, fraudulent scheme with several fraudulent acts and not "pattern of racketeering activity." Bigger v American Commercial Lines, Inc. (1986, WD Mo) 652 F Supp 123, 8 EBC 1424.
Former wife fails to show pattern of racketeering activity in civil RICO action against former husband alleging
scheme to defraud her of her interest in real property where multiple predicate acts are single scheme to defraud single
victim and inflict single injury, deprivation of former wife's property interest in lodge. Abernathy v Erickson (1987,
ND Ill) 657 F Supp 504.
Investment company fails to state valid RICO claim, where company has merely alleged that numerous telephone
calls and letters from alleged pipe bender machine makers fraudulently induced it to finance defendant, because although company has alleged separate criminal acts, those acts were all in furtherance of one alleged scheme and do not
constitute "pattern" of racketeering. National Business Funding, Inc. v Custom Muffler Specialists, Inc. (1987, ED
Mich) 675 F Supp 1080.
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RICO claim fails to allege pattern of racketeering activity, where complaint describes single scheme by corporation
to take control of and liquidate plaintiff's corporation, because even under 18 USCS § 1962(b), which prohibits acquiring control over enterprise, 18 USCS § 1961(5) pattern requirement is not met in Fourth Circuit by allegations of ordinary business fraud in which single scheme is perpetrated against single victim. Arnold v Moran (1988, ED Va) 687 F
Supp 232, CCH Fed Secur L Rep P 93956.
Dismissal was granted where plaintiff failed to properly plead that defendants engaged in "pattern of racketeering
activities", 18 USCS § 1961(5), where plaintiff's alleged single-victim, limited-purpose scheme was not type of ongoing
threat to which Congress intended to extend liability under RICO. Leung v Law (2005, ED NY) 387 F Supp 2d 105.
Client failed to state claim under Racketeer Influenced and Corrupt Organizations Act (RICO) against attorney and
law firm based on attorney's alleged failure to disclose conflict of interest and attorney's alleged inducement of client to
plead guilty to false accusations; client did not sufficiently allege pattern of racketeering activity or enterprise under 18
USCS § 1962. Claimed RICO offense began and ended with attorney's alleged undisclosed conflict of interest, so there
was no showing of continuity, and client did not sufficiently allege that attorney was carrying out affairs of unlawful
enterprise. Tenamee v Schmukler (2006, SD NY) 438 F Supp 2d 438.
Plaintiffs, who believed they were targets of foreclosure rescue scam, could not maintain claim under RICO Act;
plaintiff's case did not satisfy continuity prong of RICO as it only involved two victims (a married couple) and transaction that took place over matter of few weeks. Johnson v Wheeler (2007, DC Md) 492 F Supp 2d 492.
Unpublished Opinions
Unpublished: Dismissal pursuant to Fed. R. Civ. P. 12(b)(6) of purchaser's Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS §§ 1962-1964, claim based on carrier's requiring additional identification from African-American before releasing computer was affirmed because single incident of delay in delivering computer did not
constitute criminal offenses under RICO, nor did it establish pattern of RICO violations. Humphrey v UPS (2006, CA11
Fla) 2006 US App LEXIS 25964.
Unpublished: Dismissal pursuant to Fed. R. Civ. P. 12(b)(6) of purchaser's Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS §§ 1962-1964, claim based on carrier's requiring additional identification from African-American before releasing computer was affirmed because single incident of delay in delivering computer did not
constitute criminal offenses under RICO, nor did it establish pattern of RICO violations. Humphrey v UPS (2006, CA11
Fla) 2006 US App LEXIS 25964.
3.Enterprise 56. Generally
Definition of "enterprise" in 18 USCS § 1961(4) encompasses both legal entities and illegitimate associations-in-fact. Russello v United States (1983) 464 US 16, 78 L Ed 2d 17, 104 S Ct 296.
Racketeer Influenced and Corrupt Organizations Act (18 USCS §§ 1961-1968) is intended to be used against both
"legitimate" and "illegitimate" enterprises. H. J., Inc. v Northwestern Bell Tel. Co. (1989) 492 US 229, 106 L Ed 2d
195, 109 S Ct 2893.
Word "enterprise" as used in 18 USCS § 1962(b) and as defined in 18 USCS § 1961(4) (as including "any. . . corporation") is, on its face, all-inclusive, and claim that § 1962(b) was applicable only to domestic enterprises was unpersuasive because Congress intended to deal generally with influences of organized crime on American economy and not
merely with its infiltration into domestic enterprises. United States v Parness (1974, CA2 NY) 503 F2d 430, 29 ALR
Fed 810, cert den (1975) 419 US 1105, 42 L Ed 2d 801, 95 S Ct 775.
Term "enterprise" in 18 USCS § 1961 has broad meaning and reaches not only legitimate business enterprises but
goes beyond scope of legitimate business activity. United States v Hawes (1976, CA5 Ga) 529 F2d 472.
All enterprises conducted through pattern of racketeering activity or collection of unlawful debts fall within interdiction of Title IX of Organized Crime Control Act. United States v Altese (1976, CA2 NY) 542 F2d 104, cert den
(1977) 429 US 1039, 50 L Ed 2d 750, 97 S Ct 736.
Use of verb "includes" in definition of enterprise indicates congressional intent not to limit RICO enterprise to specific categories listed, but rather gives it broader definition. United States v Thevis (1982, CA5 Ga) 665 F2d 616, 9
Fed Rules Evid Serv 1025, reh den (1982, CA5 Ga) 671 F2d 1379 and reh den (1982, CA5 Ga) 671 F2d 1379 and cert
den (1982) 456 US 1008, 73 L Ed 2d 1303, 102 S Ct 2300 and cert den (1982) 458 US 1109, 73 L Ed 2d 1370, 102 S Ct
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3489 and cert den (1982) 459 US 825, 74 L Ed 2d 61, 103 S Ct 57 and (criticized in United States v White (1997, App
DC) 325 US App DC 282, 116 F3d 903, 47 Fed Rules Evid Serv 472) and (criticized in Yuma Petroleum Co. v Thompson (1998, La App 1st Cir) 709 So 2d 824) and (criticized in Magouirk v Warden (2001, CA5 La) 237 F3d 549, 56 Fed
Rules Evid Serv 274) and (superseded by statute as stated in United States v Zlatogur (2001, CA11 Ga) 271 F3d 1025,
58 Fed Rules Evid Serv 929, 15 FLW Fed C 31) and (criticized in United States v Rivera (2003, ED Va) 292 F Supp 2d
827).
Possession of characteristics of legal entity is not necessary to make out enterprise for purposes of 18 USCS § 1961.
United States v Computer Sciences Corp. (1982, CA4 Va) 689 F2d 1181, 68 ALR Fed 783, cert den (1983) 459 US
1105, 74 L Ed 2d 953, 103 S Ct 729 and (ovrld in part by Busby v Crown Supply (1990, CA4 Va) 896 F2d 833, 114
CCH LC P 12032).
There is no indication that Congress intended to restrict definition of "enterprise" to number of entities or individuals that fall within same category. United States v Aimone (1983, CA3 NJ) 715 F2d 822, 13 Fed Rules Evid Serv 1136,
cert den (1984) 468 US 1217, 82 L Ed 2d 883, 104 S Ct 3585, 104 S Ct 3586.
Government must establish that members of group share common purpose of engaging in course of conduct, produce evidence of ongoing organization, formal or informal, and must show that various associates function as continuing unit, and that enterprise exists "separate and apart from pattern of activity in which it engages." United States v
Feldman (1988, CA9 Cal) 853 F2d 648, cert den (1989) 489 US 1030, 103 L Ed 2d 222, 109 S Ct 1164.
Enterprise can be any enterprise, not necessarily one engaged in pattern of racketeering, and enterprise itself may
be villain, conducting its affairs through pattern of racketeering; in many cases, however, enterprise is vehicle for racketeering activity. United States v Porcelli (1989, CA2) 865 F2d 1352, cert den (1989) 493 US 810, 107 L Ed 2d 22,
110 S Ct 53.
Conspiracy amounts to "enterprise" where there is structure, where structure is more than ad hoc and persists as
identifiable entity through time. Burdett v Miller (1992, CA7 Ill) 957 F2d 1375, 22 FR Serv 3d 189, amd, reh, en banc,
den (1992, CA7) 1992 US App LEXIS 8723.
Evidence of changes in membership of enterprise as, for example, before defendant's incarceration and after his release, does not compel finding that there existed 2 operations that were unrelated as matter of law. United States v
Mauro (1996, CA2 NY) 80 F3d 73.
Hallmark of enterprise is "structure," which includes informal organization such as criminal gangs, and there must
be some structure to distinguish enterprise from mere conspiracy, but not much; enterprise is "ongoing structure" of
persons associated though time, joined in purpose, and organized in manner amenable to hierarchical or consensual decision-making. United States v Rogers (1996, CA7 Ill) 89 F3d 1326, cert den (1996) 519 US 999, 136 L Ed 2d 387, 117
S Ct 495.
In prosecution for, inter alia, racketeering in violation of 18 USCS § 1961 and 18 USCS § 1962(c), participating in
racketeering conspiracy in violation of 18 USCS § 1962(d), and murder in aid of racketeering in violation of 18 USCS §
2 and 18 USCS § 1959(a)(1), district court did not abuse its discretion by admitting evidence of 16 uncharged crimes,
which defendant argued was inadmissible under Fed. R. Evid. 403 because evidence was irrelevant, cumulative, and
prejudicial; district court concluded that evidence was admissible to show existence of conspiracy and racketeering enterprise (and, thus, was not subject to Fed. R. Evid. 404(b)), and that potential prejudice from evidence did not substantially outweigh its probative value, and district court delivered appropriate limiting instructions. United States v Baez
(2003, CA2 NY) 349 F3d 90, 62 Fed Rules Evid Serv 1328.
Court of Appeals reviews for abuse of discretion whether evidence of uncharged robberies, was relevant within the
meaning of Fed. R. Evid. 404(b) to existence of racketeering enterprise under 18 USCS § 1961. United States v Baez
(2003, CA2 NY) 349 F3d 90, 62 Fed Rules Evid Serv 1328.
In prosecutions for racketeering offenses, 18 USCS § 1961, government may introduce evidence of uncharged offenses to establish existence of criminal enterprise. United States v Baez (2003, CA2 NY) 349 F3d 90, 62 Fed Rules Evid
Serv 1328.
United States Court of Appeals for Ninth Circuit joins circuits that hold that associated-in-fact enterprise under 18
USCS § 1961(4) part of Racketeer Influenced and Corrupt Organizations Act, does not require any particular organizational structure, separate or otherwise. Odom v Microsoft Corp. (2007, CA9 Wash) 486 F3d 541.
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18 USCS § 1961
Government is not required to choose between charging individual or corporation on one hand, and association-in-fact on other hand to establish "enterprise" under RICO (18 USCS §§ 1961 et seq.); since RICO enterprise is
defined as "including" various specified entities, list of entities is not meant to be exhaustive, and such limitation would
improperly result in allowing RICO to reach only criminals who failed to form corporate shells to aid illicit schemes.
United States v Perholtz (1988, App DC) 268 US App DC 347, 842 F2d 343, 25 Fed Rules Evid Serv 425, cert den
(1988) 488 US 821, 102 L Ed 2d 42, 109 S Ct 65 and (criticized in Lockheed Martin Corp. v Boeing Co. (2005, MD
Fla) 357 F Supp 2d 1350, 18 FLW Fed D 381).
"Enterprise," as defined at 18 USCS § 1961(4), is separate and independent unit in marketplace, discerned operationally through its behavior or functioning, regardless of its legal or proprietary structure. United States v Forsythe
(1977, WD Pa) 429 F Supp 715, revd on other grounds (1977, CA3 Pa) 560 F2d 1127.
If association-in-fact has common purpose, continuity of structure and personnel, and structure distinct from pattern
of racketeering, it is RICO enterprise. Instituto Nacional de Comercializacion Agricola (Indeca) v Continental Illinois
Nat'l Bank & Trust Co. (1983, ND Ill) 576 F Supp 991.
Criminal enterprise requires proof that (1) there is ongoing organization, formal or informal, (2) various associates
making up enterprise function as continuing unit, and (3) enterprise exists separate and apart from pattern of racketeering activity in which it engages. General Acci. Ins. Co. v Fidelity & Deposit Co. (1984, ED Pa) 598 F Supp 1223, 40
UCCRS 566.
Elements necessary to establish existence of enterprise are: (1) ongoing enterprise, (2) evidence that various associates function as continuing unit for common purpose, and (3) existence separate and apart from pattern of activity in
which it is engaged; however, plaintiffs need not plead formal structure of enterprise, nor must they plead that enterprise
is continuing unit with common purpose. Schnitzer v Oppenheimer & Co. (1985, DC Or) 633 F Supp 92.
To establish "enterprise" under 18 USCS §§ 1961 and 1962, there must first be evidence of ongoing organization,
formal or informal, and evidence that various associates function as continuing unit, and second, enterprise must have
existence separate and apart from pattern of activity in which it engaged. Medallion TV Enters. v SelecTV of Cal.
(1986, CD Cal) 627 F Supp 1290, affd (1987, CA9 Cal) 833 F2d 1360, cert den (1989) 492 US 917, 106 L Ed 2d 588,
109 S Ct 3241 and (criticized in Webster v Omnitrition Int'l (1996, CA9 Cal) 79 F3d 776, 96 CDOS 1419, 96 Daily
Journal DAR 2427, CCH Fed Secur L Rep P 99071, RICO Bus Disp Guide (CCH) P 9274).
57. Discrete existence apart from racketeering activity
"Enterprise" element of offense under 18 USCS § 1962 is not interchangeable with "pattern of racketeering" element. United States v Anderson (1980, CA8 Ark) 626 F2d 1358, 6 Fed Rules Evid Serv 581 (criticized in United States
v Zemek (1980, CA9 Wash) 634 F2d 1159, 7 Fed Rules Evid Serv 216) and cert den (1981) 450 US 912, 67 L Ed 2d
336, 101 S Ct 1351 and (criticized in United States v Rogers (1996, CA7 Ill) 89 F3d 1326).
In definition of enterprise phrase "a group of individuals associated in fact although not a legal entity" encompasses
only association having ascertainable structure which exists for purpose of maintaining operations directed toward economic goal that can be defined apart from commission of predicate acts constituting "pattern of racketeering activity".
United States v Anderson (1980, CA8 Ark) 626 F2d 1358, 6 Fed Rules Evid Serv 581 (criticized in United States v Zemek (1980, CA9 Wash) 634 F2d 1159, 7 Fed Rules Evid Serv 216) and cert den (1981) 450 US 912, 67 L Ed 2d 336,
101 S Ct 1351 and (criticized in United States v Rogers (1996, CA7 Ill) 89 F3d 1326).
Element of crime which involves participation in "enterprise" requires showing of discrete economic association
existing separately from racketeering activity. United States v Civella (1981, CA8 Mo) 648 F2d 1167, cert den (1981)
454 US 867, 70 L Ed 2d 168, 102 S Ct 330.
Because discrete existence, rather than legality or illegality of enterprises's activities or goals, is test, enterprise is
said to exist where such separateness from acts of racketeering can be found. Bennett v Berg (1982, CA8 Mo) 685 F2d
1053, adhered to, on reh, en banc, remanded (1983, CA8 Mo) 710 F2d 1361, cert den (1983) 464 US 1008, 78 L Ed 2d
710, 104 S Ct 527 and (criticized in Price v Pinnacle Brands (1998, CA5 Tex) 138 F3d 602, RICO Bus Disp Guide
(CCH) P 9476).
Enterprise can be proved by evidence that individuals not only associate together through formal or informal ongoing organization but also function as continuing unit for common purpose of engaging in course of conduct. United
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States v Dickens (1982, CA3 NJ) 695 F2d 765, cert den (1983) 460 US 1092, 76 L Ed 2d 359, 103 S Ct 1792 and cert
den (1983) 461 US 909, 76 L Ed 2d 812, 103 S Ct 1883.
To establish enterprise as defined by 18 USCS § 1961, government must demonstrate "evidence of an ongoing organization, formal or informal," that its "various associates function as a continuing unit" and that it exists "separate and
apart" from "pattern of activity in which it engages". United States v Local 560 of Int'l Bhd. of Teamsters (1985, CA3
NJ) 780 F2d 267, 121 BNA LRRM 2121, 104 CCH LC P 11941, 19 Fed Rules Evid Serv 944, cert den (1986) 476 US
1140, 90 L Ed 2d 693, 106 S Ct 2247, 122 BNA LRRM 2368.
In order to secure a conviction under RICO (18 USCS §§ 1961 et seq.) government must prove both existence of
"enterprise" and a connected "pattern of racketeering activity"; "enterprise" is not "pattern of racketeering activity," but
is entity separate and apart from pattern of activity in which it engages; term "enterprise" within meaning of 18 USCS
1961(4) includes group of persons associated together for common purpose of engaging in course of conduct which is
proved by evidence of ongoing organization, formal or informal, and by evidence that various associates function as
continuing unit, and proof that enterprise exists does not necessarily establish existence of "pattern of racketeering activity." United States v Williams (1987, CA5 Tex) 809 F2d 1072, 22 Fed Rules Evid Serv 485, reh den (1987, CA5 Tex)
817 F2d 1136 and reh gr, corrected (1987, CA5 Tex) 828 F2d 1 and cert den (1987) 484 US 896, 98 L Ed 2d 187, 108 S
Ct 228 and cert den (1987) 484 US 913, 98 L Ed 2d 216, 108 S Ct 259 and cert den (1987) 484 US 987, 98 L Ed 2d 504,
108 S Ct 506.
Characteristics distinguishing RICO enterprise include common or shared purpose animating individuals associated
with it, ongoing organization whose members function as continuing unit, and ascertainable structure distinct from that
inherent in conduct of pattern of racketeering activity; proof of all three characteristics is necessary in order to avoid
danger of guilt by association arising because RICO does not require proof of single agreement as in conspiracy case,
and to insure that criminal enterprises, which are RICO's target, are distinguished from individuals who associate for
commission of sporadic crimes. United States v Kragness (1987, CA8 Minn) 830 F2d 842, 23 Fed Rules Evid Serv
1151 (criticized in United States v Baker (1995, CA9 Mont) 63 F3d 1478, 95 CDOS 7886, 95 Daily Journal DAR
13531).
RICO (18 USCS §§ 1961 et seq.) enterprise must exhibit common or shared purpose, some continuity of structure
and personnel, and ascertainable structure distinct from that inherent in conduct of pattern of racketeering. United
States v Leisure (1988, CA8 Mo) 844 F2d 1347, 25 Fed Rules Evid Serv 487, reh den, en banc (1988, CA8) 1988 US
App LEXIS 9370 and cert den (1988) 488 US 932, 102 L Ed 2d 342, 109 S Ct 324 and cert den (1988) 488 US 960, 102
L Ed 2d 392, 109 S Ct 403, post-conviction relief den (1992, Mo) 828 SW2d 872, cert den (1992) 506 US 923, 121 L Ed
2d 259, 113 S Ct 343.
"Enterprise", under RICO, is not pattern of racketeering, but must be entity separate and apart from pattern of activity in which it engages, and when alleged violation of 18 USCS § 1962(c), is legal entity, such as corporation, this required separation is not established merely by showing that corporation, through its employees, officers and/or directors, committed pattern of predicate acts in conduct of its own business, nor does fact that individual officers and employees of corporation, in course of their employment, associate together and commit pattern of predicate acts in its
name and on its behalf in conduct of corporation's business, suffice to constitute such officers and employees an association-in-fact enterprise distinct from corporation. Old Time Enters. v Int'l Coffee Corp. (1989, CA5 La) 862 F2d 1213,
12 FR Serv 3d 1415 (criticized in Wagh v Metris Direct, Inc. (2003, CA9 Cal) 363 F3d 821, 2003 CDOS 9693).
Enterprise must be entity separate and apart from pattern of activity in which it engages; defendant who commits
predicate offenses must also be distinct from enterprise. Elliott v Foufas (1989, CA5 La) 867 F2d 877, 13 FR Serv 3d
401 (criticized in Wagh v Metris Direct, Inc. (2003, CA9 Cal) 363 F3d 821, 2003 CDOS 9693).
Corporation meets definition of "enterprise" where it engaged in activities other than fraudulent sales of partnership
interests and where effect of enterprise was to aid in sale of partnerships from which it reaped substantial income. Akin
v Q-L Invest., Inc. (1992, CA5 Tex) 959 F2d 521, CCH Blue Sky L Rep P 73630, CCH Fed Secur L Rep P 96641, RICO
Bus Disp Guide (CCH) P 8013 (criticized in System Mgmt., Inc. v Loiselle (2000, DC Mass) 91 F Supp 2d 401, RICO
Bus Disp Guide (CCH) P 9859).
Convictions of conducting affairs of enterprise through pattern of racketeering activity, and conspiracy to do so,
were affirmed, where evidence showed that enterprise had very clearly defined structure separate from pattern of racketeering activity and government established requisite de minimis connection with interstate commerce. United States v
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18 USCS § 1961
Chance (2002, CA6 Ohio) 306 F3d 356, 59 Fed Rules Evid Serv 1392, 2002 FED App 323P, reh den (2002, CA6) 2002
US App LEXIS 25526.
In prosecution of former Federal Bureau of Investigations agent under Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq., fact that other members of criminal enterprise in which defendant was involved were also members of another criminal organization did not preclude them from being members of separate
criminal enterprise involving defendant. United States v Connolly (2003, CA1 Mass) 341 F3d 16, 62 Fed Rules Evid
Serv 474.
Enterprise can either be legal entity or association of some form; entity is more likely to be deemed enterprise distinct from acts of racketeering where it is creation of law; where predicate acts of securities fraud are eliminated and
defendant still has ongoing structure as brokerage house, defendant has enterprise distinct from alleged securities fraud.
Kimmel v Peterson (1983, ED Pa) 565 F Supp 476, CCH Fed Secur L Rep P 99225.
RICO prosecutions will be approved where sole function of enterprise is to carry out illegal racketeering activities,
as long as there is also proof that individuals involved in enterprise shared common purpose and functioned as continuing unit. Beth Israel Medical Center v Smith (1983, SD NY) 576 F Supp 1061.
Proof of enterprise may sometimes be equivalent with proof of pattern of racketeering activity, but 2 proofs are not
necessarily identical. Mazza v Kozel (1984, ND Ohio) 591 F Supp 432, CCH Fed Secur L Rep P 91857.
Allegation that enterprise is separate from pattern of racketeering activity in which it is engaged is sufficient pleading; separate enterprise may be established even though proof used to establish existence of enterprise and pattern of
racketeering activity may in particular cases coalesce. General Acci. Ins. Co. v Fidelity & Deposit Co. (1984, ED Pa)
598 F Supp 1223, 40 UCCRS 566.
RICO enterprise must have ascertainable structure distinct from that inherent in conduct of pattern of racketeering
activity. Allington v Carpenter (1985, CD Cal) 619 F Supp 474 (ovrld as stated in Young v Hamilton (2003, CA9 Cal)
92 Fed Appx 389).
To establish "enterprise" under 18 USCS §§ 1961 and 1962, there must first be evidence of ongoing organization,
formal or informal, and evidence that various associates function as continuing unit, and second, enterprise must have
existence separate and apart from pattern of activity in which it engaged. Medallion TV Enters. v SelecTV of Cal.
(1986, CD Cal) 627 F Supp 1290, affd (1987, CA9 Cal) 833 F2d 1360, cert den (1989) 492 US 917, 106 L Ed 2d 588,
109 S Ct 3241 and (criticized in Webster v Omnitrition Int'l (1996, CA9 Cal) 79 F3d 776, 96 CDOS 1419, 96 Daily
Journal DAR 2427, CCH Fed Secur L Rep P 99071, RICO Bus Disp Guide (CCH) P 9274).
Plaintiffs alleged that "enterprise" conducted through pattern of racketeering was alleged association-in-fact of defendants, but those allegations failed to demonstrate that association had existence separate and apart from alleged pattern of racketeering since, as plaintiffs alleged, only purpose and activity of enterprise was identical to alleged racketeering activities; therefore because enterprise under Racketeer Influenced and Corrupt Organizations Act, 18 USCS §
1961 et seq., had to be entity separate and apart from pattern of activity in which it engaged, plaintiffs failed to establish
existence of enterprise. Tarter v United Wis. Life Ins. Co. (2002, ED La) 28 EBC 2150.
58.--Financial institutions
Evidence in civil RICO action by debtors against bank, its holding company, and three bank employees, alleging
mail fraud by issuance of false statements requesting payments of interest in excess of amount agreed on by debtors and
bank, failed to establish existence of "association in fact" enterprise separate and apart from pattern of racketeering activity in which it engaged within meaning of 18 USCS § 1961, where no connection was shown between employees and
holding company, only fact implicating holding company in alleged association was its purchase of shares of debtors'
notes from bank, and mailing of statements was activity of bank only; thus, reasonable jurors could not find existence of
enterprise separate and apart from bank. Atkinson v Anadarko Bank & Trust Co. (1987, CA5 Tex) 808 F2d 438, cert
den (1987) 483 US 1032, 97 L Ed 2d 780, 107 S Ct 3276.
Under RICO, enterprise itself cannot also be person plaintiff charges with conducting illegal enterprise; therefore
bank charged with selling plaintiff's defective housing must be dismissed from suit where complaint does not allege that
bank conducted any other enterprise harmful to plaintiff. Arzuaga-Collazo v Oriental Federal Sav. Bank (1990, CA1
Puerto Rico) 913 F2d 5.
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RICO complaints filed by corporate escrow agent for and trustee of mortgage pool, acting for itself and as assignee
of 19 savings banks and savings and loan associations who invested in pool, fail sufficiently to allege "enterprise" where
only "continuing unit" to engage in conspiracy to defraud is alleged; "enterprise" must have "ascertainable structure
distinct from that inherent in conduct of pattern of racketeering," but facts here only allege conspiracy. In re National
Mortg. Equity Corp. Mortg. Pool Certificates Sec. Litigation (1986, CD Cal) 636 F Supp 1138; In re National Mortg.
Equity Corp. Mortg. Pool etc. (1989, CD Cal) 723 F Supp 497, CCH Fed Secur L Rep P 95374.
Investors' conclusory allegation that their accountant, bank, its loan officer, and shell entities constituted association
in fact for purpose of soliciting investors in fraudulent schemes was insufficient to plead enterprise distinct from pattern
of racketeering activity as required by 18 USCS § 1962(b); argument that investors thought evidence would show that
bank, accountant, and loan officer had long-standing symbiotic referral relationships did not show enterprise distinct
from individuals who associated to commit sporadic crime. Schuster v Anderson (2005, ND Iowa) 378 F Supp 2d 1070.
59.--Other particular cases
Evidence that in addition to predicate acts, organization made investments in its criminal future, such as purchasing
certain property, acquiring aircraft suitable for drug flights to foreign country, rental of hangars and house, and performance of various banking and financial services, sufficiently established ascertainable structure distinct from pattern of
racketeering activity so as to permit finding that defendants engaged in RICO enterprise. United States v Kragness
(1987, CA8 Minn) 830 F2d 842, 23 Fed Rules Evid Serv 1151 (criticized in United States v Baker (1995, CA9 Mont) 63
F3d 1478, 95 CDOS 7886, 95 Daily Journal DAR 13531).
Requirement that RICO (18 USCS §§ 1961 et seq.) enterprise must exhibit ascertainable structure distinct from that
inherent in conduct of pattern of racketeering activity was met, where such structure was found in family and social
relationships between members of group, and in their concerted attempt to gain control of local unions, which can be
viewed in complete isolation from group's pattern of racketeering activity consisting of sequence of murders and attempted murders. United States v Leisure (1988, CA8 Mo) 844 F2d 1347, 25 Fed Rules Evid Serv 487, reh den, en
banc (1988, CA8) 1988 US App LEXIS 9370 and cert den (1988) 488 US 932, 102 L Ed 2d 342, 109 S Ct 324 and cert
den (1988) 488 US 960, 102 L Ed 2d 392, 109 S Ct 403, post-conviction relief den (1992, Mo) 828 SW2d 872, cert den
(1992) 506 US 923, 121 L Ed 2d 259, 113 S Ct 343.
Enterprise was separate and distinct from pattern of racketeering activity, where individual corporate entities had
legal existence separate from participation in racketeering and functioned to achieve legal objectives, and where illegal
purposes to which individual defendant put them were subsidiary to legitimate goal of making money. United States v
Feldman (1988, CA9 Cal) 853 F2d 648, cert den (1989) 489 US 1030, 103 L Ed 2d 222, 109 S Ct 1164.
Association-in-fact enterprise must have existence separate and apart from pattern of racketeering, must be ongoing
organization, and its members must function as continuing unit as shown by hierarchical or consensual decision-making
structure, and enterprise must not be one that briefly flourishes and fades; thus, District Court properly dismissed claim
alleging multiple acts of fraud that were part of single, discrete and otherwise lawful commercial transaction, because
pleadings do not assert that corporate defendants posed continuous threat as RICO person. Delta Truck & Tractor, Inc.
v J.I. Case Co. (1988, CA5 La) 855 F2d 241, cert den (1989) 489 US 1079, 103 L Ed 2d 836, 109 S Ct 1531.
Defendant's formation of separate entity, whether or not of criminal nature, for purpose of selling life insurance in
conjunction with tax seminars making false claims that clients could eliminate tax liability constitutes separate RICO
enterprise. Hofstetter v Fletcher (1988, CA6 Ohio) 905 F2d 897, 91-1 USTC P 50102, 65 AFTR 2d 1109.
Real estate business formed by plaintiff was "enterprise" separate from defendants, who ran business while plaintiff
was incarcerated and allegedly used illicit means to obtain ownership interests in enterprise. Jacobson v Cooper (1989,
CA2 NY) 882 F2d 717.
Although 2 racetracks were owned by separate corporations, shareholders of corporations were identical, and corporations were therefore single economic unit serving common interest and could not conspire with each other and
could not constitute separate entities for purpose of RICO claim charging fixing of horse races. Guzowski v Hartman
(1992, CA6 Mich) 969 F2d 211, RICO Bus Disp Guide (CCH) P 8044, 1992-1 CCH Trade Cases P 69890, reh den
(1992, CA6) 1992 US App LEXIS 19268 and cert den (1993) 506 US 1053, 122 L Ed 2d 132, 113 S Ct 978.
Allegation that plaintiff and his attorney, the defendant, associated in fact to operate farming venture sufficiently
alleges association-in-fact enterprise; venture existed separate from pattern of racketeering activity and extended beyond
defendant's alleged acts of fraud and theft. Crowe v Henry (1995, CA5 La) 43 F3d 198, RICO Bus Disp Guide (CCH) P
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8743, reh den (1995, CA5 La) 1995 US App LEXIS 4950 and appeal after remand, remanded (1997, CA5 La) 115 F3d
294, RICO Bus Disp Guide (CCH) P 9288.
Government is not required, under 18 USCS §§ 1961 et seq., to prove existence of "enterprise" and "pattern of
racketeering activity" by separate evidence, and "organization" element of proving that enterprise exists may be inferred
from pattern of racketeering activity, since different conclusions may be inferred from proof of same predicate acts;
thus, District Court properly instructed jury concerning elements of association-in-fact enterprise. United States v
Perholtz (1988, App DC) 268 US App DC 347, 842 F2d 343, 25 Fed Rules Evid Serv 425, cert den (1988) 488 US 821,
102 L Ed 2d 42, 109 S Ct 65 and (criticized in Lockheed Martin Corp. v Boeing Co. (2005, MD Fla) 357 F Supp 2d
1350, 18 FLW Fed D 381).
RICO complaint sufficiently pleads "enterprise" and will not be dismissed, even though alleged victim of art fraud
identified enterprise with pattern of racketeering activity and equated individual defendants with enterprise in some
paragraphs of inartful complaint, because (1) RICO statute does not require that enterprise be entity separate and apart
from association of persons who commit violation, and thus victim is permitted to allege enterprise which consists of
association where purpose is to make money through repeated fraudulent criminal activity, and (2) allegation that combination of individuals and corporation committed fraud by offering certain art plates and screens and misrepresenting
their value indicates association in fact which never creates problem of being both defendant and enterprise. Snider v
Lone Star Art Trading Co. (1987, ED Mich) 659 F Supp 1249.
Energy conservation systems dealer has presented uncontroverted evidence of RICO enterprise, distinct from individual defendants, where evidence establishes existence of legitimate "association in fact," consisting of parent company, its marketing arm, and other area dealers, which is continuing organization whose purpose is to sell energy conservation systems. North Cent. Watt Count, Inc. v Watt Count Engineering Systems, Inc. (1988, MD Tenn) 678 F Supp
1305, 1988-1 CCH Trade Cases P 67940.
RICO counts in alleged fraudulent coal mining scheme are dismissed because indictment did not allege "enterprise"
with ascertainable structure and indictment alleged only one scheme to defraud, where statute requires that enterprise
must exist for some purpose, legitimate or illegitimate, in addition to carrying out particular pattern of racketeering
forming basis of RICO charge. United States v McClendon (1988, ED Ark) 712 F Supp 723.
Where city alleged that plumbing supply company provided home appliances to city employees, who reciprocated
by helping it to defraud city, city failed to state claim against company and its president under Racketeer Influenced and
Corrupt Organizations Act, 18 USCS § 1961 et seq., because city could not establish that they and other defendants constituted organization separate from racketeering activities. City of Cleveland v Woodhill Supply, Inc. (2005, ND Ohio)
403 F Supp 2d 631.
Plaintiffs, insured and insured's attorneys, failed to state claim for violation of 18 USCS § 1962(d) against two insurance companies, as there were insufficient allegations of RICO enterprise under 18 USCS § 1961(4); insurance
companies were alleged to have deprived plaintiffs of their rights and benefits under common fund doctrine, but plaintiffs did not identify any organizational structure or hierarchy among insurance companies and did not identify any
goals aside from alleged predicate acts. Ellis v Allstate Ins. Co. (2006, ND Ill) 479 F Supp 2d 782.
Investor failed to assert RICO claims under 18 USCS §§ 1961 and 1962 because he failed to allege that association-in-fact enterprise existed separate and apart from alleged pattern of racketeering, that of scamming oil and gas investors, and failed to allege that enterprise operated with unified decision making structure. Clark v Nat'l Equities
Holdings, Inc. (2006, ED Tex) 561 F Supp 2d 632, remanded, motion to vacate den, motion den, motion gr, in part, motion den, in part (2007, CA5 Tex) 229 Fed Appx 314 and affd (2008, CA5 Tex) 2008 US App LEXIS 113.
Songwriter who alleged that 45 defendants, including recording companies and artists, conspired to steal copyrighted songs he had submitted for voluntary critique failed to adequately allege civil claims under 18 USCS § 1961(4)
because he failed to make necessary distinction between two distinct entities, i.e., RICO defendant and RICO enterprise.
Prunte v Universal Music Group (2007, DC Dist Col) 484 F Supp 2d 32.
Where plaintiff, professional wrestling promoter, alleged that defendants, former employee, licensing agent, toy
company, and video game company, violated Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1962(c),
by depriving it of honest services of agent and employee for purpose of obtaining toy licensing rights and video game
license at lower than competitive royalty rates, plaintiff sufficiently pled closed-ended continuity as to toy company,
licensing agent, and employee because (1) predicate racketeering acts, which began when toy company allegedly
adopted scheme to tie payments on perfumed doll deal, which did not involve plaintiff's licensing rights, to its efforts to
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retain agent as toy company's agent in future license deals with plaintiff and continued until toy company made its last
bribery payment to agent and employee, lasted slightly less than three years; (2) plaintiff sufficiently pled that payments
from agent to employee constituted money laundering in violation of 18 USCS § 1956(a)(1)(B)(i); and (3) plaintiff alleged multiple economic harms related to various licenses; however, plaintiff did not satisfy continuity requirement with
respect to video game company and joint venture that video game and toy company formed to obtain video game license because (1) neither defendants' cover-up nor their continued receipt of royalty payments constituted predicate acts
under 18 USCS § 1961(1)(B); and (2) scheme was inherently terminable scheme that was focused on illegally obtaining
two types of licenses and came to end when video game license was granted to joint venture by plaintiff. World Wrestling Entm't, Inc. v Jakks Pac., Inc. (2007, SD NY) 530 F Supp 2d 486.
Plaintiff security company's RICO claims against defendant competitors failed under 18 USCS §§ 1961(4), 1962(c),
on motions to dismiss because claim offered only predicate act allegations to show association between state licensing
board, its most active member, and competitors, in using mail and wire systems to destroy company's business. Able
Sec. & Patrol, LLC v Louisiana (2008, ED La) 569 F Supp 2d 617.
60. Continuity
Structural continuity of enterprise exists where unchanging pattern of roles is necessary and is utilized to carry out
predicate acts of racketeering and requirement of continuity may be met even where some changes in personnel occur;
where different individuals manage affairs of enterprise at different times and different places, determinative factor is
whether associational ties of those charged with RICO violation amount to organization pattern or system of authority.
United States v Lemm (1982, CA8 Neb) 680 F2d 1193, 10 Fed Rules Evid Serv 1185, cert den (1983) 459 US 1110, 74 L
Ed 2d 960, 103 S Ct 739.
Continuity of structure, for purposes of RICO enterprise requirement, exists where there is organizational pattern or
system of authority providing mechanism for directing group's affairs on continuing, rather than ad hoc, basis; that some
changes occur in structure and personnel does not mean that there is no mechanism for continuing direction of group
affairs, since both structure and personnel of enterprise may undergo alteration without loss of enterprise's identity as
such. United States v Kragness (1987, CA8 Minn) 830 F2d 842, 23 Fed Rules Evid Serv 1151 (criticized in United
States v Baker (1995, CA9 Mont) 63 F3d 1478, 95 CDOS 7886, 95 Daily Journal DAR 13531).
RICO enterprise need not consist of multiple ventures or plans, and if enterprise is long and elaborate enough to be
considered "continuing," RICO "enterprise" requirement is satisfied. United States v Benevento (1987, CA2 NY) 836
F2d 60, cert den (1988) 486 US 1043, 100 L Ed 2d 620, 108 S Ct 2035, post-conviction relief den (2000, SD NY) 81 F
Supp 2d 490 and (ovrld in part by United States v Indelicato (1989, CA2) 865 F2d 1370) and subsequent app (1992,
CA2 NY) 963 F2d 1522 and (criticized in United States v Jelinek (1995, CA8 Iowa) 57 F3d 655).
Existence of enterprise whose illicit activities or unlawful goals are continuing ones must be established to satisfy
requirement of pattern of racketeering activity under RICO (18 USCS §§ 1961 et seq.). Creative Bath Products, Inc. v
Connecticut General Life Ins. Co. (1988, CA2 NY) 837 F2d 561, 10 FR Serv 3d 199 (ovrld in part by United States v
Indelicato (1989, CA2) 865 F2d 1370) and cert den (1989) 492 US 918, 106 L Ed 2d 588, 109 S Ct 3241.
Evidence of formal or informal "ongoing organization" and evidence that various associates "function as continuing
unit" must be shown to establish association in fact enterprise under 18 USCS § 1961(4). Foval v First Nat'l Bank of
Commerce (1988, CA5 La) 841 F2d 126, 10 FR Serv 3d 1085.
Requirement that RICO (18 USCS §§ 1961 et seq.) enterprise must exhibit some continuity of structure and personnel was met, where individual defendants participated in nearly all criminal acts of group, and were members of
group during entire period of racketeering events. United States v Leisure (1988, CA8 Mo) 844 F2d 1347, 25 Fed
Rules Evid Serv 487, reh den, en banc (1988, CA8) 1988 US App LEXIS 9370 and cert den (1988) 488 US 932, 102 L
Ed 2d 342, 109 S Ct 324 and cert den (1988) 488 US 960, 102 L Ed 2d 392, 109 S Ct 403, post-conviction relief den
(1992, Mo) 828 SW2d 872, cert den (1992) 506 US 923, 121 L Ed 2d 259, 113 S Ct 343.
Enterprise in criminal RICO action was ongoing, and substitution of one individual defendant for another did not
cause termination of one conspiracy and commencement of another. United States v Stern (1988, CA7 Ill) 858 F2d
1241.
To establish "association in fact" enterprise under 18 USCS § 1961(4), plaintiff must establish ongoing organization, formal or informal, that functions as continuing unit over time through hierarchical or consensual decision-making
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structure. Old Time Enters. v Int'l Coffee Corp. (1989, CA5 La) 862 F2d 1213, 12 FR Serv 3d 1415 (criticized in Wagh
v Metris Direct, Inc. (2003, CA9 Cal) 363 F3d 821, 2003 CDOS 9693).
Plaintiffs failed to state valid RICO claim where they claimed only that defendant engaged in fraud connected to
bankruptcy case in sale of securities, but failed to allege that such acts amount to continued criminal activity, nor alleged that defendant derived income from such acts. Lane v Peterson (1990, CA8 Ark) 899 F2d 737, cert den (1990)
498 US 823, 112 L Ed 2d 48, 111 S Ct 74.
Continuity of activity was shown by complexity and size of scheme, which involved participation of several perpetrators, use of sophisticated financial products, and extensive planning and ongoing management to juggle incoming
funds. Resolution Trust Corp. v Stone (1993, CA10 Okla) 998 F2d 1534, CCH Fed Secur L Rep P 97663, RICO Bus
Disp Guide (CCH) P 8356, 37 Fed Rules Evid Serv 463.
There was sufficient evidence of single racketeering enterprise where evidence supported jury's finding that, although cast of characters changed over time there was nevertheless one overarching conspiracy. United States v Shea
(2000, CA1 NH) 211 F3d 658, 53 Fed Rules Evid Serv 1353, cert den (2001) 531 US 1154, 148 L Ed 2d 973, 121 S Ct
1101 and cert den (2001) 531 US 1154, 148 L Ed 2d 973, 121 S Ct 1101 and cert den (2001) 531 US 1154, 148 L Ed 2d
973, 121 S Ct 1101, reh den (2001) 532 US 990, 149 L Ed 2d 504, 121 S Ct 1647 and cert den (2001) 531 US 1154, 148
L Ed 2d 973, 121 S Ct 1101 and cert den (2001) 531 US 1154, 148 L Ed 2d 973, 121 S Ct 1102 and post-conviction relief den, motion den (2002, DC NH) 2002 DNH 185.
Evidence of ongoing organization, associates of which function as continuing unit, suffices to prove enterprise. De
Falco v Bernas (2001, CA2 NY) 244 F3d 286, RICO Bus Disp Guide (CCH) P 10046, cert den (2001) 534 US 891, 151
L Ed 2d 147, 122 S Ct 207 and (criticized in Zito v Leasecomm Corp. (2003, SD NY) 2003 US Dist LEXIS 17236).
In prosecution under Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1961 et seq., jury's finding
that nine of 14 alleged racketeering acts were not found to have been proved did not preclude jury from finding that
defendant's criminal enterprise was not continuous and jury could consider acts that it did not find were proved in deciding whether defendant's criminal enterprise was continuous. United States v Connolly (2003, CA1 Mass) 341 F3d 16,
62 Fed Rules Evid Serv 474.
Existence of continuing core of personnel motivated by common interest is sufficient to constitute association-in-fact enterprise, and continuity requirement does not mean individuals cannot leave group or that new members
cannot join at later time. United States v Perholtz (1988, App DC) 268 US App DC 347, 842 F2d 343, 25 Fed Rules
Evid Serv 425, cert den (1988) 488 US 821, 102 L Ed 2d 42, 109 S Ct 65 and (criticized in Lockheed Martin Corp. v
Boeing Co. (2005, MD Fla) 357 F Supp 2d 1350, 18 FLW Fed D 381).
18 USCS § 1961 does not require "enterprise" made up of individuals "associated in fact" to have identical associates throughout its existence, so "enterprise" does not cease to exist when some leave or others join provided those
charged are associated in fact at times alleged. United States v Dellacroce (1986, ED NY) 625 F Supp 1387.
RICO claims are insufficient to provide subject matter jurisdiction where complaint contains mere general assertion
of enterprise but provides no evidence of existing and ongoing functioning unit. International Paint Co. v Grow
Group, Inc. (1986, SD NY) 648 F Supp 729.
Subscribers to agreement to buy apartment units fail to plead adequately continuing criminal enterprise requirement
of RICO (18 USCS §§ 1961(4) and 1962) where alleged pattern of racketeering activity consisted of schemes to abandon offering plan in order to submit new plan later at higher price to defraud prospective buyers and Attorney General,
because, although acts were continuous enough over period of time to establish pattern of racketeering activity, alleged
enterprise which defrauded plaintiffs has ceased to function in terms of criminal activity by operation of law due to state
court settlement. Krantz v Schlesinger (1987, ED NY) 683 F Supp 32.
Racketeering enterprise is not properly alleged under 18 USCS § 1962 in civil action, where complaint alleges (1)
"short-lived" goals not meeting "continuity" requirement and (2) no acquaintance between alleged racketeers and thus
insufficient "relationship" among them. Ris v Bedell (1988, SD NY) 699 F Supp 429.
Accounts purchaser's RICO claim against individuals and entities involved in supplying goods to home shopping
network adequately alleges existence of RICO "enterprise," because purchaser cites group associated in fact which operated separate and apart from predicate acts of money laundering, fraud, and conversion, which had some continuity of
structure and personnel despite departure of 2 individuals and which had common goal of defrauding purchaser out of
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its money for personal enrichment throughout 3-year period of racketeering activity. American Trade Partners, L.P. v
A-1 Int'l Importing Enterprises, Ltd. (1991, ED Pa) 757 F Supp 545.
Two factors are particularly relevant to determination of continuity (either closed-ended or open-ended): duration
of related predicate acts, and extensiveness of scheme of Racketeer Influenced and Corrupt Organizations Act, 18 USCS
§ 1961 et seq., enterprise; to determine "extensiveness" of alleged scheme, court considers number of victims, number
and variety of racketeering acts, whether injuries caused were distinct, complexity and size of scheme, and nature or
character of enterprise or unlawful activity. Waddell & Reed Fin., Inc. v Torchmark Corp. (2004, DC Kan) 223 FRD
566, findings of fact/conclusions of law, judgment entered (2004, DC Kan) 337 F Supp 2d 1243.
Plaintiffs failed to present evidence from which reasonable jury would find either closed-ended or open-ended continuity under Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq; while plaintiffs may
have alleged closed-ended series of predicate acts, they constituted single scheme to accomplish one discrete goal,
which was directed solely at plaintiffs, with no credible potential to extend to other persons or entities; likewise, plaintiffs did not establish open-ended continuity because predicates themselves did not involve distinct threat of long-term
racketeering activity, either implicit or explicit, and predicates were not regular way of conducting defendant's ongoing
legitimate business or RICO enterprise. Waddell & Reed Fin., Inc. v Torchmark Corp. (2004, DC Kan) 223 FRD 566,
findings of fact/conclusions of law, judgment entered (2004, DC Kan) 337 F Supp 2d 1243.
Corporation's allegations satisfied broad definitions of Racketeer Influenced and Corrupt Organizations Act enterprise by alleging fact showing that alleged association-in-fact enterprise was ongoing and continuing. Lockheed Martin
Corp. v Boeing Co. (2004, MD Fla) 314 F Supp 2d 1198, 2004-1 CCH Trade Cases P 74411, 17 FLW Fed D 653.
Plaintiff homeowner's allegations that consumers were induced into mortgages by misrepresentations and omissions as to their obligations or as to defendant title company's and its principals' benefit and that fraudulent documents
were sent by mail or interstate telecommunications carriers were sufficient to allege enterprise under 18 USCS §
1961(4). Beard v Worldwide Mortg. Corp. (2005, WD Tenn) 354 F Supp 2d 789.
Employees injured in chemical plant explosion failed to state civil claim under Racketeer Influenced and Corrupt
Organizations Act, 18 USCS § 1964(c), because their allegation that their employer acted as RICO "enterprise" by conspiring in association with its law firm and local union officials under 18 USCS § 1961(4) to mislead employees about
availability of workers' compensation benefits failed for lack of continuity; the enterprise did not exist separately from
pattern of racketeering in which it allegedly engaged. Bradley v Phillips Petroleum Co. (2007, SD Tex) 527 F Supp 2d
625, motion den, motion den, as moot, dismd (2007, SD Tex) 527 F Supp 2d 661.
61.--Single, finite goal
Defendants' association lacked continuity required to establish "association-in-fact" enterprise under 18 USCS §§
1961 and 1962, where defendants joined together solely for purpose of committing single discrete offense of illegally
repossessing ship, since association was not ongoing organization or continuing unit such that enterprise existed apart
from commission of predicate acts; proof of "pattern of racketeering activity" does not necessarily establish "enterprise", since "pattern" does not require this continuity. Montesano v Seafirst Commercial Corp. (1987, CA5 La) 818
F2d 423.
Complaint failed to allege continuing enterprise for purposes of bondholders' civil RICO action against trust company, where enterprise claimed to have been involved in fraudulent sale of United States collateral had only straightforward, short-lived goal of selling collateral at reduced price, and ceased functioning at conclusion of sale. Beck v
Manufacturers Hanover Trust Co. (1987, CA2 NY) 820 F2d 46, cert den (1988) 484 US 1005, 98 L Ed 2d 650, 108 S Ct
698, reh den (1988) 485 US 1030, 99 L Ed 2d 903, 108 S Ct 1588 and (ovrld in part by United States v Indelicato (1989,
CA2) 865 F2d 1370) and (ovrld as stated in Shields v Citytrust Bancorp. (1994, CA2 Conn) 25 F3d 1124, CCH Fed
Secur L Rep P 98239) and (ovrld as stated in Shawmut Bank Conn., N.A. v Key Components (1994, SD NY) 1994 US
Dist LEXIS 8370) and (ovrld as stated in Mirman v Berk & Michaels, P.C. (1994, SD NY) RICO Bus Disp Guide
(CCH) P 8627) and (ovrld in part as stated in Laro, Inc. ex rel. Bay Property Assocs. v Chase Manhattan Bank (1994,
SD NY) 866 F Supp 132, RICO Bus Disp Guide (CCH) P 8692).
Existence of "enterprise" for RICO purposes is proved by evidence of ongoing organization, formal or informal,
and that various associates function together as continuing unit; thus, minority partners' RICO complaint claiming fraud
on part of majority partners in selling partnership assets failed to allege pattern of racketeering activity in conducting
affairs of "enterprise," since majority partners were not functioning as continuing unit in ongoing organization when
allegedly wrongful acts occurred, but were acting solely on their own, through sale of partnership, to prevent alleged
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enterprise from being ongoing, continuing unit. Furman v Cirrito (1987, CA2 NY) 828 F2d 898 (ovrld in part by
United States v Indelicato (1989, CA2) 865 F2d 1370).
Evidence of ongoing organization, formal or informal, and evidence that various associates function as continuing
unit is required to establish association-in-fact enterprise under 18 USCS §§ 1961 et seq.; thus, District Court properly
dismissed RICO claim, since association with single, relatively short-lived purpose of destroying individual's medical
practice lacked required continuity. Manax v McNamara (1988, CA5 Tex) 842 F2d 808, 15 Media L R 1655.
Association-in-fact enterprise must have existence separate and apart from pattern of racketeering, must be ongoing
organization, and its members must function as continuing unit as shown by hierarchal or consensual decision-making
structure, and enterprise must not be one that briefly flourishes and fades; thus, District Court properly dismissed claim
alleging multiple acts of fraud that were part of single, discrete and otherwise lawful commercial transaction, because
pleadings do not assert that corporate defendants posed continuous threat as RICO person. Delta Truck & Tractor, Inc.
v J.I. Case Co. (1988, CA5 La) 855 F2d 241, cert den (1989) 489 US 1079, 103 L Ed 2d 836, 109 S Ct 1531.
"Continuity" requirement of RICO offense was not satisfied where defendants set up sham corporation for sole
purpose of paying off loan secured by officer of parent corporation; because this single scheme was designed to be short
lived and had natural ending without threat of continued criminal activity, there was no threat of repetition. Olive Can
Co. v Martin (1990, CA7 Ill) 906 F2d 1147, 17 FR Serv 3d 516 (superseded by statute as stated in Myers v County of
Lake (1994, CA7 Ind) 30 F3d 847).
RICO suit claiming securities fraud in purchase by family corporation of plaintiff's shares in 1977 does not satisfy
"continuity" requirement where there was one offer to purchase, followed by 4 acceptances, with no threat of future
criminal conduct. Short v Belleville Shoe Mfg. Co. (1990, CA7 Ill) 908 F2d 1385, CCH Fed Secur L Rep P 95379, cert
den (1991) 501 US 1250, 115 L Ed 2d 1052, 111 S Ct 2887.
RICO complaint of ex-resident of home for aged is dismissed where goal of alleged illegal enterprise, to evict resident, was discrete, short-term event and not sufficiently continuing to constitute "enterprise," although home does not
cease to exist upon eviction, its functioning as criminal enterprise ended upon eviction. Khaimi v Schonberger (1987,
ED NY) 664 F Supp 54, affd without op (1987, CA2 NY) 838 F2d 1203.
Wife's RICO claims against husband are dismissed because, although allegations husband's involvement in plan to
assassinate her show predicate acts of criminal solicitation of murder and criminal conspiracy to commit murder and
show "pattern" where there were at least 2 related criminal acts involving solicitation of murder, "enterprise" of murdering spouse had obvious terminating date and there was no continuing unit to murder spouses for hire. Pohlot v
Pohlot (1987, SD NY) 664 F Supp 112.
Civil RICO claims are dismissed, because allegations of continuity of enterprise are insufficient where failure to
perform certain contractual duties in connection with real estate transaction is discrete, closed-ended scheme to defraud
in connection with specific promise of contract. Mastercraft Industries, Inc. v Breining (1987, SD NY) 664 F Supp
859.
RICO action for practice of "churning" securities will not be reinstated where scheme consisting of purported fraud
which was completed after 24-month period ending in 1984 and in which no subsequent or prior frauds had been alleged does not constitute "enterprise." Newman v Rothschild (1987, SD NY) 677 F Supp 146.
Singer's estate failed to state RICO claim in action against law firms and financial advisors where (1) alleged enterprise of firms and advisors had only one target and finite goal of transferring estate's shares in singer's music company
to another individual, and thus enterprise was not sufficiently continuous to constitute enterprise under RICO, and (2)
complaint failed to allege specific RICO violations and that estate was injured in business or property by reason of violations. Bingham v Zolt (1988, SD NY) 683 F Supp 965.
Alleged enterprise--fraudulent sale of limited partnership units--had definite termination date, and thus enterprise is
not properly alleged under 18 USCS § 1961(4), in civil action by investors in units, where limited partnerships were by
their terms limited to duration of slightly more than 5 years. Bruce v Martin (1988, SD NY) 691 F Supp 716, CCH Fed
Secur L Rep P 93927, adhered to, app den, motion den, on reh (1988, SD NY) 702 F Supp 66, dismd, motion gr, app
den, on reconsideration (1989, SD NY) 712 F Supp 442.
In government's prosecution of 25 codefendants in connection with ongoing illegal gambling scheme that existed
from 1964 until 2004, federal district court decided as matter of law that, as defined in 18 USCS § 1961(4), unincorpo-
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rated criminal "enterprise" had evolved from 1964 through date of indictment, 2004, with different members but same
common purpose, to earn bolita gambling profits and launder them for major coconspirators' benefit. United States v
Battle (2006, SD Fla) 473 F Supp 2d 1185, 20 FLW Fed D 395, motion den sub nom United States v Nunez (2006, SD
Fla) 2006 US Dist LEXIS 86077.
Plaintiffs' Racketeering Influenced Corrupt Organizations Act (RICO) claim was dismissed because they had failed
to allege existence of RICO enterprise; complaint contained no allegation that group operated according to any structure
or hierarchy, and there was no indication that group was "ongoing organization" as opposed to ad hoc collection of entities and individuals who each happened to have been involved in one scheme or another against plaintiffs (plaintiffs'
assertion that defendants operated according to hub-and-spokes structure was precisely kind of structure that had been
held to be insufficient to satisfy enterprise element of RICO claim). Cedar Swamp Holdings, Inc. v Zaman (2007, SD
NY) 487 F Supp 2d 444.
Where farmers alleged that sellers, processor, appraiser, and bank made misrepresentations to convince them to buy
chicken farm at inflated price, Racketeering Influence and Corrupt Organization Act (RICO), 18 USCS § 1961 et seq.,
claims failed to survive summary judgment because farmers did not produce evidence of continuity needed to support
RICO enterprise since there was no evidence that these disparate entities all acted with shared purpose of consolidating
processor's control over its farmers. Do v Pilgrim's Pride Corp. (2007, ED Tex) 512 F Supp 2d 764.
62. Corporations
Existence of corporation fulfills requirements of ascertainable structure apart from predicate racketeering activity;
thus, government sufficiently proved enterprise separate and apart from pattern of racketeering activity, where it presented evidence of several lawful corporate entities existing separately from racketeering activities. United States v
Kirk (1988, CA9 Hawaii) 844 F2d 660, 25 Fed Rules Evid Serv 683, cert den (1988) 488 US 890, 102 L Ed 2d 213, 109
S Ct 222.
Defendant's formation of separate entity, whether or not of criminal nature, for purpose of selling life insurance in
conjunction with tax seminars making false claims that clients could eliminate tax liability constitutes separate RICO
enterprise. Hofstetter v Fletcher (1988, CA6 Ohio) 905 F2d 897, 91-1 USTC P 50102, 65 AFTR 2d 1109.
Finding of control under Racketeering Act is determined by circumstances of each case and does not require formal
control such as holding of minority stock or actual designation as officer or director. Ikuno v Yip (1990, CA9 Wash)
912 F2d 306 (criticized in Word of Faith World Outreach Ctr. Church v Sawyer (1996, CA5 Tex) 90 F3d 118, 24 Media
L R 2209, RICO Bus Disp Guide (CCH) P 9093).
Where large, reputable manufacturer like Chrysler deals with its dealers and other agents in ordinary way, so that
their role in manufacturer's illegal acts is entirely incidental, manufacturer plus its dealers and agents do not constitute
enterprise within meaning of statute. Fitzgerald v Chrysler Corp. (1997, CA7 Ill) 116 F3d 225, RICO Bus Disp Guide
(CCH) P 9291.
Individuals, corporations, and other entities may constitute association-in-fact, and government is not required to
choose between charging individual or corporation on one hand, and association-in-fact on other hand to establish "enterprise" under RICO (18 USCS §§ 1961 et seq.), since RICO enterprise is defined as "including" various specified entities, list of entities is not meant to be exhaustive, and such limitation would improperly result in allowing RICO to reach
only criminals who failed to form corporate shells to aid illicit schemes. United States v Perholtz (1988, App DC) 268
US App DC 347, 842 F2d 343, 25 Fed Rules Evid Serv 425, cert den (1988) 488 US 821, 102 L Ed 2d 42, 109 S Ct 65
and (criticized in Lockheed Martin Corp. v Boeing Co. (2005, MD Fla) 357 F Supp 2d 1350, 18 FLW Fed D 381).
Legal corporate entities, and group of associated individuals, are enterprise within meaning of 18 USCS § 1961.
Chambers Dev. Co. v Browning-Ferris Industries (1984, WD Pa) 590 F Supp 1528, 1984-2 CCH Trade Cases P 66174
(criticized in Foster Wheeler Corp. v Edelman (1987, DC NJ) 1987 US Dist LEXIS 16783).
Corporation, such as bank, may be member of "individuals associated in fact" enterprise; corporation may be held
liable if it is "associated with" enterprise even if it is not "member" of "individual associated in fact" enterprise. General Acci. Ins. Co. v Fidelity & Deposit Co. (1984, ED Pa) 598 F Supp 1223, 40 UCCRS 566.
RICO complaint is dismissed because there is no "enterprise" where corporation cannot be employed by or associate with itself. Garbade v Great Divide Mining & Milling Corp. (1986, DC Colo) 645 F Supp 808, affd (1987, CA10
Colo) 831 F2d 212.
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Civil racketeering claim is not stated under 18 USCS § 1961(c), where complaint alleges that only few decisions of
officers of savings and loan that allegedly was induced to make inappropriate investments were affected, because savings and loan was not "enterprise"; level of control is insufficient. Cooperativa de Ahorro y Credito Aguada v Kidder,
Peabody & Co. (1991, DC Puerto Rico) 758 F Supp 64, CCH Fed Secur L Rep P 95921.
Indictment charging defendant with RICO violations is not dismissed, where indictment charged that defendant was
doing business as auto body shop and that shop constituted enterprise as term is defined in 18 USCS § 1961(4), because
RICO enterprise may consist of association of businesses and individuals and need not be legal entity. United States v
Galati (1994, ED Pa) 853 F Supp 152, affd without op (1996, CA3 Pa) 77 F3d 464.
Plaintiffs failed to state actionable Racketeering Influenced and Corrupt Organizations Act claim where defendant
U.S. Corporations actions in doing business with Apartheid South Africa, "a nation of millions of people at some point
in period of over forty years" was not, without more, sufficient to formulation of RICO "enterprise." In re : S. African
Apartheid Litig. v Citigroup, Inc. (2004, SD NY) 346 F Supp 2d 538.
Where Saudi subcontractor alleged that defendants participated in schemes to extort kickback payments from subcontractor and to bribe Saudi government official, complaint did not adequately allege RICO "enterprise" since subcontractor failed to set forth facts to support conclusion that all 17 defendants were actually working with one another or
associated together in single ongoing organization or continuing unit where members worked together to accomplish
common purpose. Nat'l Group for Communs. & Computers Ltd. v Lucent Techs. Inc. (2006, SD NY) 420 F Supp 2d 253.
63.--As both person and enterprise
Corporate entity may not be simultaneously enterprise and person who conducts affairs of enterprise through pattern of racketeering activity. Bennett v United States Trust Co. (1985, CA2 NY) 770 F2d 308, CCH Fed Secur L Rep P
92250, cert den (1986) 474 US 1058, 88 L Ed 2d 776, 106 S Ct 800.
Corporation which engages in racketeering activities and is direct or indirect beneficiary of pattern of racketeering
activity may be both "person" and "enterprise" under 18 USCS § 1962(a), prohibiting use of money derived from pattern of racketeering activity to acquire interest in, establish, or operate enterprise, and 18 USCS § 1962(b), prohibiting
engagement in racketeering activity to acquire or maintain interest in or control of enterprise; hence, claims by wholesale appliance distributor against corporate competitors in civil RICO action that defendants engaged in predicate acts
of racketeering, received income from such activities, and used such income in their operations sufficiently alleged that
defendants were beneficiaries of pattern of racketeering activity, and District Court erred in dismissing claims for failure
to allege a "person" separate from "enterprise." Schreiber Distrib. Co. v Serv-Well Furniture Co. (1986, CA9 Cal) 806
F2d 1393.
Corporation, to which majority shareholder thereof made loans and then secretly caused them to be repaid to him as
a priority, could not be both "enterprise" and "person" for purposes of RICO provision (18 USCS § 1962(c)) prohibiting
person employed by or associated with enterprise from conducting enterprise's affairs through pattern of racketeering
activity or collection of unlawful debt. Garbade v Great Divide Mining & Milling Corp. (1987, CA10 Colo) 831 F2d
212.
Corporation engaging in racketeering activities which is direct or indirect beneficiary of pattern of racketeering activity can be both "person" and "enterprise" under 18 USCS §§ 1962(a) and (d), but not (c); thus, plaintiffs have properly pleaded that certain defendants as corporations were enterprises under §§ 1962(a) and (d), even if they are same as
persons involved as defendants, although such allegations do not support claim under § 1962(c). United Energy Owners Committee, Inc. v United States Energy Management Systems, Inc. (1988, CA9 Cal) 837 F2d 356, 10 FR Serv 3d
253.
Doctrine of respondeat superior does not apply in civil RICO cases, since participation in criminal scheme is necessary element of liability for corporation-enterprise under 18 USCS § 1962, which is designed to impose liability upon
corporation which is perpetrator of illegal activity but not upon unwitting conduit of its employees' RICO violations. D
& S Auto Parts, Inc. v Schwartz (1988, CA7 Ill) 838 F2d 964, cert den (1988) 486 US 1061, 100 L Ed 2d 933, 108 S Ct
2833.
Although enterprise may not be held liable under 18 USCS § 1962(c), because person and enterprise may not be
same entity, § 1962(a) does not contain any language suggesting that liable person and enterprise must be separate, and
so long as enterprise does in fact benefit from challenged racketeering activity, there is no reason to ignore corporation's
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role, and no reason why injured third party may not recover from enterprise. Saporito v Combustion Eng'g (1988, CA3
NJ) 843 F2d 666, 9 EBC 2623, vacated, remanded (1989) 489 US 1049, 103 L Ed 2d 576, 109 S Ct 1306, 10 EBC 2000.
Finding of control under Racketeering Act is determined by circumstances of each case and does not require formal
control such as holding of minority stock or actual designation as officer or director. Ikuno v Yip (1990, CA9 Wash)
912 F2d 306 (criticized in Word of Faith World Outreach Ctr. Church v Sawyer (1996, CA5 Tex) 90 F3d 118, 24 Media
L R 2209, RICO Bus Disp Guide (CCH) P 9093).
Corporation cannot simultaneously be named as defendant and satisfy enterprise requirement under 18 USCS §
1962. United States v Goldin Indus. (2000, CA11 Ala) 219 F3d 1268, RICO Bus Disp Guide (CCH) P 9914, 13 FLW
Fed C 802.
District court erred in granting fungicide manufacturer's Fed. R. Civ. P. 12(c) motion for judgment on pleadings in
civil action under 18 USCS §§ 1962(c), 1964(c), which was filed by commercial nurserymen who alleged that manufacturer fraudulently withheld evidence in underlying product liability litigation in order to induce settlement; nurserymen properly alleged "enterprise" within meaning of 18 USCS § 1961(4), and enterprise formed by group of fungicide
manufacturer, its law firms, and its expert witnesses was separate and distinct from fungicide manufacturer as RICO
"person." Living Designs, Inc. v E.I. DuPont de Nemours & Co. (2005, CA9 Hawaii) 431 F3d 353.
Corporation may not simultaneously be "enterprise" and "person" of 18 USCS § 1962(a). Willamette Sav. & Loan,
Div. of American Sav. & Loan v Blake & Neal Finance Co. (1984, DC Or) 577 F Supp 1415, CCH Fed Secur L Rep P
99709.
Corporation that is enterprise for RICO purposes is not person for same purposes, since RICO Act condemns only
criminal acts of persons, not enterprises. Umstead v Durham Hosiery Mills, Inc. (1984, MD NC) 592 F Supp 1269.
Where corporate legal entity is named as enterprise and RICO defendant, separate enterprise/person requirement is
not met. Schnitzer v Oppenheimer & Co. (1985, DC Or) 633 F Supp 92.
Corporation's alleged conduct of distributing counterfeit hair care products to retailers and being involved in alleged counterfeit and diversion enterprise satisfied separate structure requirement of 18 USCS § 1961(4), and, thus, enterprise element was satisfied for RICO claim asserted by hair care product designer. Sebastian Int'l, Inc. v Russolillo
(2000, CD Cal) 186 F Supp 2d 1055, RICO Bus Disp Guide (CCH) P 10123.
Plaintiff's RICO claim had to be dismissed under Fed. R. Civ. P. 12(b)(6) because complaint failed to allege requisite "distinctness" between "person" and "enterprise." Dtex, LLC v BBVA Bancomer, S.A. (2005, DC SC) 405 F Supp 2d
639.
Unpublished Opinions
Unpublished: District court properly dismissed unsuccessful long-term disability claimant's action against insurance
company under Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS §§ 1961 et seq., because enterprise alleged in complaint was insurance company's disability unit, division of insurance company; therefore, claimant
did not allege RICO enterprise separate from RICO defendant. Shorter v Metro. Life Ins. Co. (2007, CA9 Cal) 2007 US
App LEXIS 458.
64.--Association of corporations
Group of corporations may be "enterprise" within meaning of 18 USCS § 1961. United States v Huber (1979, CA2
NY) 603 F2d 387, cert den (1980) 445 US 927, 63 L Ed 2d 759, 100 S Ct 1312 and (criticized in Lockheed Martin Corp.
v Boeing Co. (2005, MD Fla) 357 F Supp 2d 1350, 18 FLW Fed D 381).
Intentional or "purposeful" behavior by corporations charged as members of association-in-fact is not required under RICO, rather, showing of common purpose must be proved by evidence of ongoing organization, formal or informal, and evidence that various associates function as continuing unit; furthermore, although corporations and individuals are not so interconnected as to constitute single business operated under various names, they nevertheless possess
organization and continuity required of RICO associated-in-fact enterprise, where there is overlap in personnel and organizational structure among businesses, various corporations shared financial connections, and individual defendant
was principal in each venture. United States v Feldman (1988, CA9 Cal) 853 F2d 648, cert den (1989) 489 US 1030,
103 L Ed 2d 222, 109 S Ct 1164.
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Association-in-fact consisting of lender and its numerous secondary lenders to which it sold customers' loans was
too unstable and fluid to constitute RICO enterprise where district court found that there was no evidence of anything
more than business relationship. VanDenBroeck v CommonPoint Mortg. Co. (2000, CA6 Mich) 210 F3d 696, RICO Bus
Disp Guide (CCH) P 9876, 2000 FED App 153P.
In putative class action filed by consumers who alleged that computer corporation and retail store chain established
mechanisms for transferring customers' personal and financial information from retail stores to computer corporation in
order to fraudulently charge for Internet access and cell phone accounts, district court erred in finding that consumers
did not sufficiently allege existence of associated-in-fact enterprise within meaning of 18 USCS §§ 1961(4) and
1962(c)part of Racketeer Influenced and Corrupt Organizations Act; associated-in-fact enterprise did not require any
ascertainable separate structure, and consumers sufficiently alleged common purpose, ongoing organization, and continuing unit. Odom v Microsoft Corp. (2007, CA9 Wash) 486 F3d 541.
"Enterprise" within meaning of RICO may be composed of group of corporations which form association, separate
and distinct from individual corporations. Fustok v Conticommodity Services, Inc. (1985, SD NY) 618 F Supp 1074.
Group of corporations, associated in fact, can constitute RICO (18 USCS §§ 1961 et seq.) "enterprise", even though
group is not expressly listed in § 1961, since § 1961 is not exclusive list. Trak Microcomputer Corp. v Wearne Bros.,
Inc. (1985, ND Ill) 628 F Supp 1089.
Cable TV corporation's RICO action is dismissed for failure to allege enterprise where corporate defendants were
separate telecommunications business entities who bid for cable TV franchise and their only connection was single alleged attempt to defraud District of Columbia in bidding process. District Telecommunications Dev. Corp. v District
Cablevision, Inc. (1985, DC Dist Col) 638 F Supp 418.
Complaint sufficiently alleges "enterprise" under 18 USCS § 1961(4), in action by developer against corporate
manufacturers and sellers of mortar additive, by identifying "persons" as corporate defendants and "enterprise" as association of these entities because association of corporations may form enterprise separate and distinct from each member of that association and, at pleading stage of proceedings, developer is not required to show that enterprise is separate
from pattern of racketeering activity. Moravian Dev. Corp. v Dow Chemical Co. (1986, ED Pa) 651 F Supp 144.
Corporation cannot violate Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq.,
absent association with entity other than itself and it is insufficient to allege that corporation's officers and employees
constituted this other entity; absent some allegation that by using subsidiary, parent corporation was able to more easily
commit or conceal fraud, subsidiary is not considered "enterprise" that is separate from parent corporation. Waddell &
Reed Fin., Inc. v Torchmark Corp. (2004, DC Kan) 223 FRD 566, findings of fact/conclusions of law, judgment entered
(2004, DC Kan) 337 F Supp 2d 1243.
Where plaintiffs alleged that manufacturers engaged in pattern of racketeering activity by accomplishing fraudulent
promotion of drug for off-label uses, defendants' motion to dismiss was allowed in part because, inter alia, plaintiffs
sufficiently alleged common purpose, but they failed to allege continuing relationships between specific physicians and
specific medical marketing firms. Harden Mfg. Corp. v Pfizer Inc. (In re Neurontin Mktg., Sales Practices & Prods.
Liab. Litig.) (2006, DC Mass) 433 F Supp 2d 172.
Stripped of verbiage, plaintiff customer alleged that tax preparation company and its franchises, acting together,
constituted enterprise; however, company and members of its "corporate family" could not constitute enterprise under
RICO Act in scenario alleged; even assuming company and its franchises constituted RICO enterprise, except for very
general allegation that franchises were governed by franchise agreements, complaint failed to describe organization and
hierarchy of alleged enterprise, manner of decision-making enterprise employed, and differentiation of roles for actors
and groups within supposed enterprise. Wooley v Jackson Hewitt, Inc. (2008, ND Ill) 540 F Supp 2d 964.
65.--Association within corporation
"Enterprise", under RICO, is not pattern of racketeering, but must be entity separate and apart from pattern of activity in which it engages, and when alleged violation of 18 USCS § 1962(c), is legal entity, such as corporation, this required separation is not established merely by showing that corporation, through its employees, officers and/or directors, committed pattern of predicate acts in conduct of its own business, nor does fact that individual officers and employees of corporation, in course of their employment, associate together and commit pattern of predicate acts in its
name and on its behalf in conduct of corporation's business, suffice to constitute such officers and employees an associ-
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ation-in-fact enterprise distinct from corporation. Old Time Enters. v Int'l Coffee Corp. (1989, CA5 La) 862 F2d 1213,
12 FR Serv 3d 1415 (criticized in Wagh v Metris Direct, Inc. (2003, CA9 Cal) 363 F3d 821, 2003 CDOS 9693).
Fact that officers and employees of corporation, in course of their employment, associate to commit predicate acts
does not establish association-in-fact enterprise distinct from corporation. Elliott v Foufas (1989, CA5 La) 867 F2d
877, 13 FR Serv 3d 401 (criticized in Wagh v Metris Direct, Inc. (2003, CA9 Cal) 363 F3d 821, 2003 CDOS 9693).
Enterprise, for RICO purposes, includes scheme by corporate officer and others to defraud corporation. Estee
Lauder, Inc. v Harco Graphics, Inc. (1984, SD NY) 621 F Supp 689.
Where plaintiff mentally ill Supplemental Security Income (SSI) beneficiaries sued defendants, parent corporation
and its two wholly owned subsidiaries who were authorized service providers and representative payees, alleging that
benefits payments were misused or misappropriated in violation of 18 USCS § 1962, while parent and its subsidiaries
could satisfy § 1962(d)'s distinctiveness requirement, and alternative and inconsistent legal claims were permitted at
pleading stage under Fed. R. Civ. P. 8(e)(2), complaint lacked sufficient details to determine if parent's activities were
sufficiently distinct from its subsidiaries when alleged RICO violations occurred, and further, alleging defendants used
SSI deposits wired to bank accounts to misappropriate funds treated defendants as single, undifferentiated mass and
more detail was required to determine if any of defendants were conducting something other than their own, usual
business activities while perpetrating alleged misappropriation; complaint was dismissed without prejudice with leave to
replead. Bates v Northwestern Human Servs. (2006, DC Dist Col) 466 F Supp 2d 69.
66.--Professional corporations
Law firm, as professional corporation organized to practice law, constitutes enterprise for RICO purposes under 18
USCS § 1961(4), where firm's attorneys were involved in fraudulent automobile accident insurance scheme; law firm's
activities have requisite nexus with interstate commerce where attorney utilized United States mails in perpetrating
scheme. State Farm Mut. Auto. Ins. Co. v Rosenfield (1988, ED Pa) 683 F Supp 106.
67. Estates
Estate may be enterprise for purposes of 18 USCS §§ 1961 et seq. because definition of enterprise includes any legal entity or group and is purposely broad. Gunther v Dinger (1982, SD NY) 547 F Supp 25.
Plaintiff lacked standing to sue under Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1964(c),
because plaintiff did not explicitly allege that defendants' reinvestment of stolen funds caused distinct injury to plaintiff
or that his injuries derived from acts or omissions that fell within definition of pattern of racketeering activity provided
in 18 USCS § 1961(1). Leung v Law (2005, ED NY) 387 F Supp 2d 105.
Executor and beneficiary premised their RICO claims against co-trustee and money managers on allegation that estate was "enterprise" under 18 USCS § 1961; therefore, estate--res in separate probate case--was at heart of executor and
beneficiary's claims under 18 USCS § 1962(c), (d); accordingly, RICO claim fell within probate exception to federal
court jurisdiction. Selseth v Darwit (2008, ND Ill) 536 F Supp 2d 883.
68. Labor organizations
Union local and not individual is "enterprise" where defendant appoints himself union steward and accepts payment
as union steward from union contractors for services which are never rendered. United States v Kaye (1977, CA7 Ill)
556 F2d 855, 95 BNA LRRM 2666, 81 CCH LC P 13243, cert den (1977) 434 US 921, 54 L Ed 2d 277, 98 S Ct 395, 96
BNA LRRM 3249, 82 CCH LC P 10202.
Enterprise, under RICO, must exhibit common or shared purpose, some continuity of structure and personnel, and
ascertainable structure distinct from that inherent in pattern of racketeering; thus, RICO enterprise was established,
where defendant and others acted out of common purpose to dominate local labor union, profit economically from this
domination, and murder opponents if necessary. United States v Flynn (1988, CA8 Mo) 852 F2d 1045, 26 Fed Rules
Evid Serv 797, cert den (1988) 488 US 974, 102 L Ed 2d 546, 109 S Ct 511, post-conviction relief den (1996, CA8 Mo)
87 F3d 996, reh den (1996, CA8 Mo) 1996 US App LEXIS 22544.
Careful examination of racketeering counts one and two quickly revealed that extortion charged in each was significantly different and sufficiently distinct to constitute pattern where count one charged defendants with extorting rights
of union members to speak freely and participate democratically in affairs of their union, while count two charged them
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with extorting money from their victim. United States v Bellomo (2003, ED NY) 263 F Supp 2d 561 (criticized in United
States v Muscarella (2004, SD NY) 175 BNA LRRM 3280, 65 Fed Rules Evid Serv 501).
69. Governmental agencies or officers
Pennsylvania Bureau of Cigarette and Beverage Taxes is "enterprise" that affects interstate or foreign commerce
because Congress intended to protect state operated commercial ventures engaged in interstate commerce or other governmental agencies regulating commercial and utility operations affecting interstate commerce. United States v Frumento (1977, CA3 Pa) 563 F2d 1083, cert den (1978) 434 US 1072, 55 L Ed 2d 775, 98 S Ct 1256 and cert den (1978)
434 US 1072, 55 L Ed 2d 776, 98 S Ct 1258.
Term "enterprise" as used in RICO includes governmental agencies or offices; "enterprise" encompasses any legal
entity and does not differentiate between government or public legal entitites and private legal entitites. United States v
Clark (1981, CA8 Ark) 646 F2d 1259.
18 USCS § 1962 should be construed to include public entities as enterprises. United States v Long (1981, CA4
SC) 651 F2d 239, 8 Fed Rules Evid Serv 630, cert den (1981) 454 US 896, 70 L Ed 2d 212, 102 S Ct 396.
Language of 18 USCS § 1961, defining enterprise, unambiguously encompasses governmental units, and purpose
and history of § 1961 demonstrate clear Congressional intent that RICO be interpreted to apply to activities that corrupt
public or governmental entities. United States v Angelilli (1981, CA2 NY) 660 F2d 23, 9 Fed Rules Evid Serv 83, cert
den (1982) 455 US 910, 71 L Ed 2d 449, 102 S Ct 1258, reh den (1982) 456 US 951, 72 L Ed 2d 476, 102 S Ct 2024 and
cert den (1982) 455 US 945, 71 L Ed 2d 657, 102 S Ct 1442, reh den (1982) 456 US 939, 72 L Ed 2d 460, 102 S Ct 1998
and reh den (1982) 456 US 939, 72 L Ed 2d 460, 102 S Ct 1999.
RICO's remedial provisions show that government entities are neither appropriate nor intended subjects of RICO
enterprises. United States v Thompson (1982, CA6 Tenn) 669 F2d 1143.
Office of governor of state may be enterprise and may be so alleged in indictment under 18 USCS §§ 1961 et seq.
United States v Thompson (1982, CA6 Tenn) 685 F2d 993, cert den (1982) 459 US 1072, 74 L Ed 2d 635, 103 S Ct 494.
Evidence supported finding of single RICO conspiracy, where enterprise was municipal agency rife with corruption, and individual defendant knew that he was not simply participating in isolated bribery conspiracies but rather in
broader conspiracy to operate municipal agency for private gain through pattern of racketeering activity. United States
v Friedman (1988, CA2 NY) 854 F2d 535, 26 Fed Rules Evid Serv 444, cert den (1989) 490 US 1004, 104 L Ed 2d 153,
109 S Ct 1637 and (criticized in United States v Richards (2000, ED NY) 94 F Supp 2d 304) and (criticized in United
States v Saada (2000, CA3 NJ) 212 F3d 210, 53 Fed Rules Evid Serv 1377).
District Court properly instructed jury that state department of transportation is "enterprise" within reach of 18
USCS § 1962(c), since governmental or public entities fit within definition of "enterprise" for purposes of RICO.
United States v Hocking (1988, CA7 Ill) 860 F2d 769, reh, en banc, den (1988, CA7) 1988 US App LEXIS 17682.
Claim that group of individuals associated in fact for purpose of illegally investing fruits of fraud and illegally using mails and wire and allegedly transporting fruits of fraud in interstate commerce, sufficiently alleges RICO enterprise; accordingly, plaintiff Republic of Philippines sufficiently alleged RICO enterprise in civil RICO action claiming
that defendants, former president of Philippines and his wife, arranged to get fraudulently-obtained property out of
Philippines into United States. Republic of Philippines v Marcos (1988, CA9 Cal) 862 F2d 1355, cert den (1989) 490
US 1035, 104 L Ed 2d 404, 109 S Ct 1933.
City fire department is legitimate governmental entity possessing clear organizational structure and qualifies as
"enterprise" under RICO. United States v Balzano (1990, CA7 Ill) 916 F2d 1273.
RICO enterprise which is not legal entity need not be group of formerly associated individuals but may be "association in fact;" thus, law firm, police department, and sheriff's department may constitute "enterprise." United States v
Masters (1991, CA7 Ill) 924 F2d 1362, 32 Fed Rules Evid Serv 408, reh den (1991, CA7) 1991 US App LEXIS 4949 and
cert den (1991) 500 US 919, 114 L Ed 2d 105, 111 S Ct 2019 and cert den (1991) 502 US 823, 116 L Ed 2d 58, 112 S Ct
86 and (criticized in United States v Bauer (1997, CA7 Ill) 129 F3d 962) and (criticized in United States v DeFries
(1997, App DC) 327 US App DC 181, 129 F3d 1293, 156 BNA LRRM 2999).
State representative's office consisting of employees performing various duties constituted "enterprise" for purposes
of RICO charge of extortion in bribe-taking scheme; predicate acts of taking money from lobbyists extending over
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6-year period constituted "pattern of racketeering". United States v Blandford (1994, CA6 Ky) 33 F3d 685, 1994 FED
App 312P, reh, en banc, den (1994, CA6 Ky) 1994 US App LEXIS 34101 and cert den (1995) 514 US 1095, 131 L Ed 2d
743, 115 S Ct 1821 and (criticized in United States v Collins (1996, CA6 Ky) 78 F3d 1021, 44 Fed Rules Evid Serv 144,
77 AFTR 2d 1274, 1996 FED App 82P).
District court did not err by identifying State as legal entity and allowing State to be enterprise for purposes of
Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961, in RICO conspiracy prosecution, given
that scheme revolved around elected official throughout his tenure in office of Secretary of State and during time he was
candidate for Governor's office. United States v Warner (2007, CA7 Ill) 498 F3d 666, reh den, reh, en banc, den (2007,
CA7 Ill) 2007 US App LEXIS 24935.
Developer's action under Racketeer Influenced & Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq.,
failed to state claim because complaint failed to sufficiently allege existence of enterprise structure among defendant
village and other defendants. Nowhere in complaint did one find anything to indicate structure of any kind; there was no
reference to system of governance, administrative hierarchy, joint planning committee, board, manager, staff, headquarters, personnel having differentiated functions, budget, records, or any other indicator of legal or illegal enterprise.
Limestone Dev. Corp. v Vill. of Lemont (2008, CA7 Ill) 520 F3d 797.
On motion to dismiss count of indictment charging defendant Governor of Maryland with conducting and participating in affairs of State of Maryland, which was alleged to be enterprise within meaning of statute, through pattern of
racketeering activity, on ground that State of Maryland was not enterprise within meaning of statute, count would be
dismissed where remedies provided for in civil and criminal provisions clearly implied that Congress had only private
entities in mind when defining "enterprise" and where interpretation of statute to include "states" within meaning of
"enterprise" would clearly result in what could only be characterized as startling departure from traditional understanding of federal-state relationships. United States v Mandel (1976, DC Md) 415 F Supp 997 (criticized in United States v
Adkins (2004, WD Va) 2004 US Dist LEXIS 19951).
West Virginia Alcohol Beverage Control Commissioner is "enterprise" within meaning of 18 USCS § 1961; general
words defining "enerprise" were intended to go beyond specific reference to private business or labor organization.
United States v Barber (1979, SD W Va) 476 F Supp 182.
Political entity or governmental agency may be "enterprise" within meaning of 18 USCS § 1961; thus, state governor's office was enterprise. United States v Sisk (1979, MD Tenn) 476 F Supp 1061.
Louisiana department of agriculture is enterprise within meaning of 18 USCS § 1961(4). United States v Dozier
(1980, MD La) 493 F Supp 554.
Term "enterprise" in 18 USCS § 1961(4) does not exclude governmental organizations. Maryland v Buzz Berg
Wrecking Co. (1980, DC Md) 496 F Supp 245.
Board of Tax Appeals is enterprise within meaning of 18 USCS § 1961(4). United States v Lavin (1981, ND Ill)
504 F Supp 1356.
RICO action by customers of utility against utility, its electric company subsidiary, and its former and present employees is dismissed, where complaint alleged that (1) plaintiffs were damaged by having paid higher electric and gas
rates than they otherwise would have paid by reason of defendants' scheme to defraud and acts of mail and wire fraud,
and (2) defendants misused funds obtained from ratepayers as result of electric and gas rate billing allowed by state
public service commission for illegal, improper, and unreported purpose of making campaign and political payments
and contributions to various public officials and politicians, because claim is barred by filed rate doctrine. Feiner v Orange & Rockland Utils. (1994, SD NY) 862 F Supp 1084, RICO Bus Disp Guide (CCH) P 8672.
Association-in-fact enterprise may consist of both group of individuals who join together for common criminal
purpose and otherwise legitimate entities, including governmental entities, that are controlled and used by those individuals to achieve that purpose. United States v Cianci (2002, DC RI) 210 F Supp 2d 71.
Where defendants, city mayor, city official, and businessperson, were accused of conspiracy and substantive violations under 18 USCS § 1962(c) and (d) of Racketeer Influenced and Corrupt Organizations Act (RICO) for awarding
city contracts and jobs in exchange for bribes, fact that alleged RICO association-in-fact enterprise included city and
city departments did not cause enterprise to lack common criminal purpose; it was sufficient that defendants controlled
and used legitimate entities to achieve criminal objectives. United States v Cianci (2002, DC RI) 210 F Supp 2d 71.
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Tenant failed to state RICO claim based on ex-parte meeting of two municipal housing agencies and three judges
because tenant failed to set fourth any "predicate acts" or allege existence of RICO "enterprise." Dibbs v Roldan (2005,
SD NY) 356 F Supp 2d 340.
Where property owner alleged that city officials engaged in common scheme to force owners to sell their property
which would be acquired for development, defendants' categorical argument that governmental entity could not constitute Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1961 et seq., enterprise was without merit. Ferluga v Eickhoff (2006, DC Kan) 408 F Supp 2d 1153.
70.--Judiciary
Philadelphia traffic court is "enterprise" within meaning of 18 USCS § 1961. United States v Bacheler (1979, CA3
Pa) 611 F2d 443, 79-2 USTC P 9695, 45 AFTR 2d 400.
Florida's Third Judicial Circuit properly constitutes enterprise under Rico. United States v Stratton (1981, CA5 La)
649 F2d 1066.
Term "enterprise" as defined in 18 USCS § 1961 is broad enough to include municipal court which is one part of
city government. United States v Sutherland (1981, CA5 Tex) 656 F2d 1181, 9 Fed Rules Evid Serv 278, reh den
(1981, CA5 Tex) 663 F2d 101 and cert den (1982) 455 US 949, 71 L Ed 2d 663, 102 S Ct 1451 and cert den (1982) 455
US 991, 71 L Ed 2d 852, 102 S Ct 1617.
Circuit Court of Cook County, Illinois, is enterprise affecting commerce under RICO (18 USCS § 1961). United
States v Murphy (1985, CA7 Ill) 768 F2d 1518, 18 Fed Rules Evid Serv 981, cert den (1986) 475 US 1012, 89 L Ed 2d
304, 106 S Ct 1188.
Court may be enterprise within meaning of RICO (18 USCS §§ 1961 et seq.) where participants engaged in patterns
of activity designed to corrupt operation of court's own process; however, where false answers to interrogatories are
given which mislead only litigants, such conduct is not equivalent to participation in enterprise's affairs which is required by 18 USCS §§ 1962(c). Averbach v Rival Mfg. Co. (1987, CA3 Pa) 809 F2d 1016, 6 FR Serv 3d 1144, cert den
(1987) 482 US 915, 96 L Ed 2d 675, 107 S Ct 3187 and cert den (1987) 484 US 822, 98 L Ed 2d 45, 108 S Ct 83.
Requirement that criminal activity have effect on "enterprise" for RICO conviction was established where defendant attorney's scheme of fixing drunk driving tickets by bribing deputy prosecutor to destroy files of defendants had
effect on enterprise, which was prosecutor's office; court rejects defendant's contention that his acts affected his clients
only and not prosecutor's office. United States v Goot (1990, CA7 Ind) 894 F2d 231, cert den (1990) 498 US 811, 112
L Ed 2d 22, 111 S Ct 45.
Philadelphia traffic court is "enterprise" within meaning of 18 USCS § 1961. United States v Vignola (1979, ED
Pa) 464 F Supp 1091, affd without op (1979, CA3 Pa) 605 F2d 1199, cert den (1980) 444 US 1072, 62 L Ed 2d 753,
100 S Ct 1015.
Whether or not state circuit court is enterprise whose activities affect interstate commerce, bailiff charged with taking bribes in fraudulent scheme to influence judges in divorce actions did not participate in affairs of enterprise within
meaning of 18 USCS § 1962, where bailiff never actually tried to pass money to judges or influence their decisions.
United States v Kaye (1984, ND Ill) 586 F Supp 1395.
Supreme Court of New York in Queens was enterprise as defined by RICO statute, since statute requires only that
enterprise be organization, not that it be criminal in nature. United States v Brennan (1986, ED NY) 629 F Supp 283,
affd (1986, CA2 NY) 798 F2d 581, 21 Fed Rules Evid Serv 358.
Although Racketeering Influenced and Corrupt Organizations Act definitions do not expressly include governmental entities, such as state courts, in definition of "enterprise," courts have consistently held that term "enterprise" does
encompass such entities. Castro v United States (2003, SD Fla) 248 F Supp 2d 1170, 16 FLW Fed D 221.
71.--Law enforcement
Definition of "enterprise" in 18 USCS § 1961(4) is broad enough to include public as well as private entities; city
police department is "enterprise" since it consists of group of individuals associated in fact. United States v Brown
(1977, CA5 Ga) 555 F2d 407, reh den (1977, CA5 Ga) 559 F2d 29 and cert den (1978) 435 US 904, 55 L Ed 2d 494, 98
S Ct 1448.
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State agency charged with responsibility of enforcing tax laws on interstate industry engaged in importing cigarettes from points outside state is enterprise within meaning of 18 USCS § 1961(4). United States v Frumento (1977,
CA3 Pa) 563 F2d 1083, cert den (1978) 434 US 1072, 55 L Ed 2d 775, 98 S Ct 1256 and cert den (1978) 434 US 1072,
55 L Ed 2d 776, 98 S Ct 1258.
Municipal police department is "enterprise" within meaning of 18 USCS § 1961(4) where former members of police department engaged in conspiracy to violate RICO statute by using their official position to solicit and accept bribes
from business establishments in exchange for acquiescence and protection of illegal activities by such establishments;
public entities and individuals may constitute enterprises through which racketeering is conducted. United States v
Grzywacz (1979, CA7 Ill) 603 F2d 682, 4 Fed Rules Evid Serv 1240, 52 ALR Fed 800, cert den (1980) 446 US 935, 64
L Ed 2d 788, 100 S Ct 2152.
County sheriff's department was "enterprise" within meaning of 18 USCS § 1961. United States v Baker (1980,
CA4 NC) 617 F2d 1060.
Public entity such as prosecutor's office may be "enterprise" within coverage of 18 USCS § 1962. United States v
Altomare (1980, CA4 W Va) 625 F2d 5.
County Sheriff is public entity sufficient to constitute enterprise within meaning of 18 USCS § 1961. United States
v Lee Stoller Enterprises, Inc. (1981, CA7 Ill) 652 F2d 1313, cert den (1981) 454 US 1082, 70 L Ed 2d 615, 102 S Ct
636.
City police department may be enterprise for purposes of 18 USCS § 1962. United States v Kovic (1982, CA7 Ill)
684 F2d 512, 11 Fed Rules Evid Serv 854, cert den (1982) 459 US 972, 74 L Ed 2d 284, 103 S Ct 304.
County sheriff's department constitutes "enterprise" for purposes of 18 USCS § 1962(c). United States v Davis
(1983, CA6 Ohio) 707 F2d 880, 13 Fed Rules Evid Serv 121.
In prosecution of former Federal Bureau of Investigations agent under Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq., defendant's organization-in-fact with others to carry out criminal enterprise
was sufficient to support RICO conviction, as there was no requirement that enterprise have ascertainable structure, nor
was there restriction on associations embraced by statute's definition, and defendant and other members of enterprise
worked together in association-in-fact enterprise over period of almost two decades, joining forces to protect themselves
from prosecution and to further other criminal activities. United States v Connolly (2003, CA1 Mass) 341 F3d 16, 62
Fed Rules Evid Serv 474.
RICO claims against FBI by decedent's estate and survivors were subject to dismissal, since (1) RICO Act did not
waive sovereign immunity of United States, and (2) federal agencies are immune from state or federal criminal prosecution, and thus cannot satisfy the "racketeering activity" requirement for civil RICO liability, because they are not
"chargeable," "indictable," or "punishable" for the offenses listed in 18 USCS § 1961(1). Donahue v FBI (2002, DC
Mass) 204 F Supp 2d 169.
72. Inanimate objects
Inanimate objects, such as coffee, or intangible rights, such as contract rights, cannot possibly constitute RICO
"enterprise", which must be either an individual or legal entity such as corporation, or association of individuals; furthermore, plaintiff's list of alleged RICO enterprises, which makes no attempt to explain function of any of these alleged
enterprises fails to establish "enterprise" under RICO. Old Time Enters. v Int'l Coffee Corp. (1989, CA5 La) 862 F2d
1213, 12 FR Serv 3d 1415 (criticized in Wagh v Metris Direct, Inc. (2003, CA9 Cal) 363 F3d 821, 2003 CDOS 9693).
Inanimate object such as apartment cannot constitute RICO enterprise. Elliott v Foufas (1989, CA5 La) 867 F2d
877, 13 FR Serv 3d 401 (criticized in Wagh v Metris Direct, Inc. (2003, CA9 Cal) 363 F3d 821, 2003 CDOS 9693).
Court will not expand sense of "enterprise" so far as to include system of products that might be objects of commercial enterprise. Friedlander v Nims (1983, ND Ga) 571 F Supp 1188, CCH Fed Secur L Rep P 99512, dismd
without op (1984, CA11 Ga) 747 F2d 1467 and affd (1985, CA11 Ga) 755 F2d 810, CCH Fed Secur L Rep P 91981, 1
FR Serv 3d 946.
RICO enterprise cannot be collection of inanimate objects or technology. Creed Taylor, Inc. v CBS, Inc. (1989,
SD NY) 718 F Supp 1171.
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Investor's RICO claim against perpetrators of allegedly fraudulent travel scheme must fail, even though scheme
operated through bank checking account ultimately left investors holding unpaid checks totaling over $ 12 million, because enterprise alleged here consists of that bank account and fraudulent travel company, and bank account is inanimate object which cannot constitute RICO enterprise. Guidry v Bank of LaPlace (1990, ED La) 740 F Supp 1208, affd,
in part, mod, in part (1992, CA5 La) 954 F2d 278, CCH Blue Sky L Rep P 73616.
73. Individuals
Individual defendant may no more be both liable "person" and "enterprise" that has its affairs conducted through
pattern of racketeering activity than can corporation. United States v Di Caro (1985, CA7 Ill) 772 F2d 1314, 18 Fed
Rules Evid Serv 1027, cert den (1986) 475 US 1081, 89 L Ed 2d 716, 106 S Ct 1458.
Two or 3 leaders and several core individuals associated to effect importation of drugs constituted enterprise within
meaning of RICO; defendants, as sporadic participants in such enterprise could reasonably be found to have depended
upon others in enterprise to make preliminary arrangements. United States v Young (1990, CA11 Fla) 906 F2d 615.
Jury's associated-in-fact Racketeering Influenced and Corrupt Organizations Act (RICO) enterprise, 18 USCS §
1961(4), finding was sustainable where there was sufficient evidence that individual defendants exercised substantial
control over municipal entities named as members of enterprise--notably one defendant was city's mayor and second
defendant was its chief of administration--where both were shown to have used their positions and influence to sell municipal favors on continuing basis, and where defendants' illegal schemes could function only with cooperation, witting
or unwitting, of certain city agencies and officials; fact that some racketeering schemes did not go as planned, and that
certain elements within city may not have completely complied with defendants' wishes, did not defeat integrity of
charged enterprise. United States v Cianci (2004, CA1 RI) 378 F3d 71.
Although district court found there was insufficient evidence of conspiracy's existence within five years of commencement of prosecution, and hence that prosecution of defendants on that count was barred by statute of limitations,
Government correctly argued that evidence was sufficient to support findings that Racketeer Influenced and Corrupt
Organizations Act (RICO) enterprise whose purpose was to gain money for its participants by providing services to
members and associates of organized crime--and defendants' conspiracy to conduct that services enterprise through pattern of racketeering activity--continued well past March 8, 2000 and therefore was not time-barred; district court's statute-of-limitations-based acquittal as matter of law was that district court's views of enterprise, its purposes, its location,
and its duration were more restricted than what was alleged in indictment and than what jury could infer from evidence
at trial; district court's view that, as matter of law, RICO enterprise and RICO conspiracy must have ceased to exist no
later than when both coconspirators were in prison failed to recognize that defendants themselves could constitute RICO
enterprise as defined by 18 USCS § 1961(4) and interpreted by U.S. Supreme Court. United States v Eppolito (2008,
CA2 NY) 543 F3d 25.
Individuals, corporations, and other entities may constitute association-in-fact, and government is not required to
choose between charging individual or corporation on one hand, and association-in-fact on other hand to establish "enterprise" under RICO (18 USCS §§ 1961 et seq.), since RICO enterprise is defined as "including" various specified entities, list of entities is not meant to be exhaustive, and such limitation would improperly result in allowing RICO to reach
only criminals who failed to form corporate shells to aid illicit schemes. United States v Perholtz (1988, App DC) 268
US App DC 347, 842 F2d 343, 25 Fed Rules Evid Serv 425, cert den (1988) 488 US 821, 102 L Ed 2d 42, 109 S Ct 65
and (criticized in Lockheed Martin Corp. v Boeing Co. (2005, MD Fla) 357 F Supp 2d 1350, 18 FLW Fed D 381).
"Enterprise" within meaning of 18 USCS § 1961 includes "group of individuals associated in fact with various corporations". United States v Thevis (1979, ND Ga) 474 F Supp 134, affd (1982, CA5 Ga) 665 F2d 616, 9 Fed Rules
Evid Serv 1025, reh den (1982, CA5 Ga) 671 F2d 1379 and reh den (1982, CA5 Ga) 671 F2d 1379 and cert den (1982)
456 US 1008, 73 L Ed 2d 1303, 102 S Ct 2300 and cert den (1982) 458 US 1109, 73 L Ed 2d 1370, 102 S Ct 3489 and
cert den (1982) 459 US 825, 74 L Ed 2d 61, 103 S Ct 57 and (criticized in United States v White (1997, App DC) 325
US App DC 282, 116 F3d 903, 47 Fed Rules Evid Serv 472) and (criticized in Yuma Petroleum Co. v Thompson (1998,
La App 1st Cir) 709 So 2d 824) and (criticized in Magouirk v Warden (2001, CA5 La) 237 F3d 549, 56 Fed Rules Evid
Serv 274) and (superseded by statute as stated in United States v Zlatogur (2001, CA11 Ga) 271 F3d 1025, 58 Fed
Rules Evid Serv 929, 15 FLW Fed C 31) and (criticized in United States v Rivera (2003, ED Va) 292 F Supp 2d 827)
and (superseded by statute as stated in In re Timbers of Inwood Forest Associates, Ltd. (1987, CA5 Tex) 808 F2d 363,
15 BCD 494, 16 CBC2d 1, CCH Bankr L Rptr P 71584).
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Enterprise is entity and associates thereof, who commit requisite number of racketeering acts, and may properly be
charged in RICO indictment; enterprise can consist of one person. United States v Joseph (1981, ED Pa) 526 F Supp
504.
Majority shareholder of corporation and his counsel are not part of enterprise involved in fraud in connection with
merger of corporations, since enterprise must be separate and distinct entity from pattern of activity in which it engages.
Umstead v Durham Hosiery Mills, Inc. (1984, MD NC) 578 F Supp 342, CCH Fed Secur L Rep P 91405.
Group of entities such as 2 partnerships and one individual may constitute "group of individuals associated in fact"
within meaning of 18 USCS § 1961. First Federal Sav. & Loan Asso. v Oppenheim, Appel, Dixon & Co. (1986, SD
NY) 629 F Supp 427, CCH Fed Secur L Rep P 92505.
Computer software company properly alleged enterprise under RICO where group of employees of corporation allegedly functioned as unit, to perform industrial espionage against software company, separate from employees' parent
corporation and thus constituted association in fact. Continental Data Systems, Inc. v Exxon Corp. (1986, ED Pa) 638
F Supp 432.
Corporation adequately alleges existence of "enterprise" under 18 USCS § 1961(4), in civil RICO action against
former president of corporation, notwithstanding that complaint (1) does not allege enterprise functions as continuing
unit that has existence separate and apart from alleged racketeering activity, and (2) may allege president is simultaneously both defendant and enterprise. Shared Network Technologies, Inc. v Taylor (1987, ND Ga) 669 F Supp 422,
1987-2 CCH Trade Cases P 67758.
Complaint made no allegation that all doctors who prescribed pharmaceutical company's drug had associated together with each other and drug company as entity with common fraudulent purpose, or that there was any common
communication network, decision-making process, or organizational structure; allegation that each provider was aware
that there were likely other providers engaged in parallel schemes was insufficient to establish association-in-fact Racketeer Influenced and Corrupt Organizations Act (RICO) enterprise. In re Pharm. Indus. Average Wholesale Price Litig.
(2003, DC Mass) 263 F Supp 2d 172, remanded (2004, DC Mass) 307 F Supp 2d 190.
Where former members of alleged sex cult wrote articles exposing cult, which were put on various websites, former
members and website owners were not association-in-fact enterprise under 18 USCS § 1962(c) because there was no
evidence of plan, no formal organization, no leader, and no division of responsibilities; each person maintained his own
website and none shared control of content of website with other members of alleged enterprise. Gentle Wind Project v
Garvey (2006, DC Me) 407 F Supp 2d 282.
Unpublished Opinions
Unpublished: Ex-husband failed to present first requirement for claim under Racketeer Influenced and Corrupt Organizations Act, "enterprise," where he brought claim against his ex-wife. Milgrom v Burstein (2005, ED Ky) 374 F
Supp 2d 523.
74. Partnerships
Existence of "enterprise" for RICO purposes is proved by evidence of ongoing organization, formal or informal,
and that various associates function together as continuing unit; thus, minority partners' RICO complaint claiming fraud
on part of majority partners in selling partnership assets failed to allege pattern of racketeering activity in conducting
affairs of "enterprise," since majority partners were not functioning as continuing unit in ongoing organization when
allegedly wrongful acts occurred, but were acting solely on their own, through sale of partnership, to prevent alleged
enterprise from being ongoing, continuing unit. Furman v Cirrito (1987, CA2 NY) 828 F2d 898 (ovrld in part by
United States v Indelicato (1989, CA2) 865 F2d 1370).
Limited partnerships satisfy definition of term enterprise in 18 USCS § 1961. Eisenberg v Gagnon (1983, ED Pa)
564 F Supp 1347, CCH Fed Secur L Rep P 99475, vacated, in part on other grounds, revd, in part, affd, in part (1985,
CA3 Pa) 766 F2d 770, CCH Fed Secur L Rep P 92202, 18 Fed Rules Evid Serv 783, 2 FR Serv 3d 980, cert den (1985)
474 US 946, 88 L Ed 2d 290, 106 S Ct 342, 106 S Ct 343 and (criticized in Rothwell v Chubb Life Ins. Co. of Am. (1998,
DC NH) 191 FRD 25).
75. Sole proprietorship
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18 USCS § 1961
Sole proprietorship can be "enterprise" with which proprietor can be associated. McCullough v Suter (1985, CA7
Ill) 757 F2d 142.
76. Trust funds
Pension fund is RICO "enterprise" separate from defendant corporation where fund has separate corporate existence, is nonprofit membership corporation, could exist after corporation went out of business, and has its own governance which is regulated by comprehensive statutory and regulatory provisions. Cox v Administrator United States Steel
& Carnegie (1994, CA11 Ala) 30 F3d 1347, 147 BNA LRRM 2012, 8 FLW Fed C 527, 8 FLW Fed C 650.
Trust does not constitute "enterprise" for purposes of RICO; trust is neither legal entity nor association-in-fact.
Bonner v Henderson (1998, CA5 Tex) 147 F3d 457, RICO Bus Disp Guide (CCH) P 9532.
Common trust fund and individual trust do not constitute enterprise separate and apart from bank within which
trusts are kept. Witt v South Carolina Nat'l Bank (1985, DC SC) 613 F Supp 140.
77. Illegitimate associations
Term "enterprise" encompasses both legitimate and illegitimate activities since neither language, structure, nor legislative history of Racketeer Influenced and Corrupt Organization Act limits its application to legitimate enterprises.
RICO. United States v Turkette (1981) 452 US 576, 69 L Ed 2d 246, 101 S Ct 2524.
Term "enterprise" has very broad meaning, and encompasses not only legitimate businesses but also enterprises
which are from their inception organized for illicit purposes; single enterprise engaged in diversified activities fits comfortably within proscriptions of statute. United States v Elliott (1978, CA5 Ga) 571 F2d 880, reh den (1978, CA5 Ga)
575 F2d 300 and cert den (1978) 439 US 953, 58 L Ed 2d 344, 99 S Ct 349 and cert den (1978) 439 US 953, 58 L Ed 2d
344, 99 S Ct 349.
"Enterprise" is to be given broad interpretation; term encompasses groups whose only purpose is to engage in illegal behavior; informal and loosely connected criminal network is enterprise. United States v Diecidue (1979, CA5 Fla)
603 F2d 535, 4 Fed Rules Evid Serv 1294, cert den (1980) 445 US 946, 63 L Ed 2d 781, 100 S Ct 1345 and cert den
(1980) 445 US 946, 63 L Ed 2d 781, 100 S Ct 1345 and cert den (1980) 446 US 912, 64 L Ed 2d 266, 100 S Ct 1842.
18 USCS §§ 1961 through 1968 are not strictly limited to activities of organized crime, but can be used to curb
criminal activities which are part of illegal enterprise. United States v Aleman (1979, CA7 Ill) 609 F2d 298, cert den
(1980) 445 US 946, 63 L Ed 2d 780, 100 S Ct 1345.
Association formed for sole purpose of illegal racketeering can satisfy "enterprise" requirements of 18 USCS §
1961. United States v Provenzano (1980, CA3 NJ) 620 F2d 985, 6 Fed Rules Evid Serv 566, cert den (1980) 449 US
899, 66 L Ed 2d 129, 101 S Ct 267.
Wholly illegitimate enterprises are not outside scope of Racketeer Influenced and Corrupt Organizations Act.
United States v Zemek (1980, CA9 Wash) 634 F2d 1159, 7 Fed Rules Evid Serv 216, cert den (1981) 450 US 916, 67 L
Ed 2d 341, 101 S Ct 1359 and cert den (1981) 450 US 985, 67 L Ed 2d 821, 101 S Ct 1525 and cert den (1981) 452 US
905, 69 L Ed 2d 406, 101 S Ct 3031 and cert den (1981) 452 US 905, 69 L Ed 2d 406, 101 S Ct 3031 and cert den
(1981) 452 US 905, 69 L Ed 2d 406, 101 S Ct 3031 and (criticized in United States v Woodruff (1996, ND Cal) 941 F
Supp 910) and (criticized in United States v Sherwood (1996, CA9 Nev) 98 F3d 402, 96 Daily Journal DAR 13022).
Enterprise within meaning of 18 USCS § 1961 includes both ostensibly legitimate businesses availed of for criminal
purposes and wholly corrupt organizations. United States v Sutton (1980, CA6 Ohio) 642 F2d 1001, cert den (1981)
453 US 912, 69 L Ed 2d 995, 101 S Ct 3143, 101 S Ct 3144 and post-conviction relief dismd (2001, CA6 Ohio) 11 Fed
Appx 496.
Completely illegal organization may be enterprise for RICO purposes. United States v Riccobene (1983, CA3 Pa)
709 F2d 214, 13 Fed Rules Evid Serv 564, cert den (1983) 464 US 849, 78 L Ed 2d 145, 104 S Ct 157 and (ovrld in part
as stated in Lauria v AMTRAK (1998, CA3 Pa) 145 F3d 593, 49 Fed Rules Evid Serv 660) and (criticized in Bejerano v
State (2000, Fla App D5) 760 So 2d 218, 25 FLW D 1157) and (criticized in Gross v State (2000, Fla) 765 So 2d 39, 25
FLW S 555) and (criticized in Miskovsky v State (2001) 2001 OK CR 26, 31 P3d 1054).
Series of agreements, which would have constituted multiple conspiracies prior to RICO (18 USCS §§ 1961 et
seq.), can form single "enterprise" conspiracy under RICO. United States v Valera (1988, CA11 Fla) 845 F2d 923, 25
Fed Rules Evid Serv 1294, cert den (1989) 490 US 1046, 104 L Ed 2d 422, 109 S Ct 1953.
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18 USCS § 1961
Application of U.S. Supreme Court decision, which reversed holding that RICO does not apply to wholly illegal
enterprises, did not violate defendant's right to due process, despite claim that he was convicted under unforeseeable
judicial construction of statute, applied retroactively, since Supreme Court held that meaning of term "enterprise" in
RICO statute was so lacking in ambiguity that individuals could not reasonably rely on possible limiting construction of
term to render their conduct non-criminal. United States v Angiulo (1988, CA1 Mass) 847 F2d 956, 26 Fed Rules Evid
Serv 515, cert den (1988) 488 US 852, 102 L Ed 2d 110, 109 S Ct 138 and cert den (1988) 488 US 928, 102 L Ed 2d
332, 109 S Ct 314 and (criticized in United States v Marino (2002, CA1 Mass) 277 F3d 11, 57 Fed Rules Evid Serv
1511).
Definition of "enterprise" includes both legitimate and illegitimate aspects of business, illegitimate activities being
covered by Racketeer Influenced and Corrupt Organizations Act (18 USCS §§ 1961 et seq.). United States v Swiderski
(1978, App DC) 193 US App DC 92, 593 F2d 1246, cert den (1979) 441 US 933, 60 L Ed 2d 662, 99 S Ct 2055, 99 S Ct
2056.
RICO embraces enterprises conducted through pattern of racketeering whether they are facially legitimate or illegal. Hellenic Lines, Ltd. v O'Hearn (1981, SD NY) 523 F Supp 244.
78.--Drugs and narcotics
Evidence of existence of group of individuals associated for purpose of distributing marijuana, which group was
ongoing organization with well-defined structure and continuity of membership and purpose, was sufficient to establish
enterprise. United States v Zielie (1984, CA11 Fla) 734 F2d 1447, 15 Fed Rules Evid Serv 1928, reh den (1984, CA11
Fla) 740 F2d 979 and cert den (1985) 469 US 1189, 83 L Ed 2d 964, 105 S Ct 957 and cert den (1985) 469 US 1216, 84
L Ed 2d 338, 105 S Ct 1192.
In prosecutions for participation in armored drug robberies, 2 murders and prison escape of revolutionary leader,
"enterprise" was proven independent of predicate acts, where government presented evidence of network of safehouses,
continuing strategy and planning sessions, and links among numerous criminal acts. United States v Ferguson (1985,
CA2 NY) 758 F2d 843, cert den (1985) 474 US 841, 88 L Ed 2d 102, 106 S Ct 124 and cert den (1985) 474 US 841, 88 L
Ed 2d 102, 106 S Ct 125 and cert den (1985) 474 US 1032, 88 L Ed 2d 572, 106 S Ct 592.
Evidence in RICO prosecution was sufficient to establish three characteristics of enterprise, namely, common purpose animating participants, continuity of structure and personnel, and ascertainable structure distinct from pattern of
racketeering activity; each defendant shared and to some extent carried out common purpose to import, receive, conceal,
buy, sell, and otherwise deal in narcotics and dangerous drugs, activities of group exhibited pattern of roles and continuing system of authority, and organization made investments in its criminal future. United States v Kragness (1987,
CA8 Minn) 830 F2d 842, 23 Fed Rules Evid Serv 1151 (criticized in United States v Baker (1995, CA9 Mont) 63 F3d
1478, 95 CDOS 7886, 95 Daily Journal DAR 13531).
Unpublished Opinions
Unpublished: Defendant's conviction under 18 USCS § 1962(d) was supported by sufficient evidence because evidence showing coordinated efforts among gang superiors and underlings in service of common goal of protecting geographical territory from incursion by other drug dealers was sufficient to prove that defendant's gang was criminal enterprise within meaning of 18 USCS § 1961(4). United States v Edwards (2007, CA2) 2007 US App LEXIS 1315.
79.--Gambling
In prosecution of defendant for engaging in interstate enterprise through pattern of racketeering activity in violation
of 18 USCS § 1962, indictment alleged required "enterprise" by describing defendant and his partners as "group of individuals associated in fact to defraud in illegal card games persons who had traveled to State of Nevada". United States
v Morris (1976, CA5 Tex) 532 F2d 436.
Circle of jockeys and betters who regularly attempt to profit and do profit from illegal fixing of races constitutes
"enterprise" as defined in 18 USCS § 1961(4). United States v Errico (1980, CA2 NY) 635 F2d 152, cert den (1981)
453 US 911, 69 L Ed 2d 994, 101 S Ct 3142.
Count is sufficient to charge RICO enterprise where it charges that defendants were employed by and associated
with enterprise which was engaged in fixing horseraces by bribery at various racetracks to gain profits therefrom by
wagering on fixed races and that such activities affected interstate commerce. United States v Winter (1981, CA1
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18 USCS § 1961
Mass) 663 F2d 1120, cert den (1983) 460 US 1011, 75 L Ed 2d 479, 103 S Ct 1249 and cert den (1983) 460 US 1011,
75 L Ed 2d 479, 103 S Ct 1250 and cert den (1983) 460 US 1011, 75 L Ed 2d 479, 103 S Ct 1250 and (criticized in
United States v Marmolejo (1996, CA5 Tex) 86 F3d 404) and (criticized in Salinas v United States (1997) 522 US 52,
139 L Ed 2d 352, 118 S Ct 469, 97 CDOS 8996, 97 Daily Journal DAR 14512, RICO Bus Disp Guide (CCH) P 9382,
1997 Colo J C A R 3054, 1997 Colo J C A R 3209, 11 FLW Fed S 251).
Definition of "unlawful debt" clearly contemplates type of gambling debts involved in illegal poker games operated
by defendant, and jury could have concluded beyond reasonable doubt that defendant engaged in extension of credit and
collection of debts for illegal gambling operation, and that these activities were carried out to further interests of organized crime family, to support conviction under 18 USCS § 1962(c). United States v Angiulo (1988, CA1 Mass) 847
F2d 956, 26 Fed Rules Evid Serv 515, cert den (1988) 488 US 852, 102 L Ed 2d 110, 109 S Ct 138 and cert den (1988)
488 US 928, 102 L Ed 2d 332, 109 S Ct 314 and (criticized in United States v Marino (2002, CA1 Mass) 277 F3d 11, 57
Fed Rules Evid Serv 1511).
80.--Prostitution
Organized prostitution activity falls within definition of "enterprise" prescribed in 18 USCS § 1961(4). United
States v McLaurin (1977, CA5 Fla) 557 F2d 1064, reh den (1977, CA5 Fla) 562 F2d 1257 and reh den (1977, CA5 Fla)
562 F2d 1258 and cert den (1978) 434 US 1020, 54 L Ed 2d 767, 98 S Ct 743.
81.--Tax avoidance
Illegal scheme is clearly corrupt enterprise within meaning of 18 USCS § 1961 where scheme effectuated thousands
of unlawful property tax reductions by covertly circumventing procedures concerning applications for assessment reductions in which others were relied on as runners who contacted taxpayers and solicited payments from them in exchange for arranging reduced property tax assessments. United States v Burns (1982, CA7 Ill) 683 F2d 1056, cert den
(1983) 459 US 1173, 74 L Ed 2d 1018, 103 S Ct 821.
Indictment sufficiently establishes separate existence of enterprise where it clearly shows complex, ongoing organization consisting of defendants and companies functioning as continuing unit to devise, promote, and sell fraudulent
tax shelter investments in gold mining operations. United States v Rogers (1986, DC Colo) 636 F Supp 237, affd, remanded (1992, CA10 Colo) 960 F2d 1501, CCH Fed Secur L Rep P 97735, cert den (1992) 506 US 1035, 121 L Ed 2d
689, 113 S Ct 817.
82.--Miscellaneous
Claim that group of individuals associated in fact for purpose of illegally investing fruits of fraud and illegally using mails and wire and allegedly transporting fruits of fraud in interstate commerce, sufficiently alleges RICO enterprise; accordingly, plaintiff Republic of Philippines sufficiently alleged RICO enterprise in civil RICO action claiming
that defendants, former president of Philippines and his wife, arranged to get fraudulently-obtained property out of
Philippines into United States. Republic of Philippines v Marcos (1988, CA9 Cal) 862 F2d 1355, cert den (1989) 490
US 1035, 104 L Ed 2d 404, 109 S Ct 1933.
Enterprise existed under criminal RICO statute in prosecution of former policeman for activity in conspiring to
steal advance copies of civil service examinations and sell them to other policemen so that they could cheat and obtain
promotions; evidence was sufficient to show ongoing association not just series of criminal acts, where government
introduced evidence of 10 efforts to obtain exams, 13 instances of providing exams to applicants, as well as various acts
of possessing exams, making answer sheets, changing scores, and each act involved complainant, tended to illustrate
single consistent method, and each act furnished general scheme. United States v Doherty (1989, CA1 Mass) 867 F2d
47, cert den (1989) 492 US 918, 106 L Ed 2d 590, 109 S Ct 3243.
Although RICO enterprise may be "amoeba-like" structure or loose, informal association, plaintiffs failed to prove
existence of such structure where no admissible evidence was produced to show that person who allegedly planted
bomb ever existed, or that defendants were connected to him. Avirgan v Hull (1991, CA11 Fla) 932 F2d 1572, 20 FR
Serv 3d 754, cert den (1992) 502 US 1048, 116 L Ed 2d 813, 112 S Ct 913 and cert den (1992) 506 US 952, 121 L Ed 2d
330, 113 S Ct 405.
Sufficient evidence supported finding of "enterprise" under 18 USCS § 1961(4) for purposes of defendants' convictions under 18 USCS § 1962(c), (d), part of RICO; evidence showed hierarchical decision-making structure and division
of labor among various players who committed arson, bank fraud, mail fraud, and murder; there was also evidence of
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18 USCS § 1961
common purpose to make money, business relationship, and continuity. United States v Johnson (2006, CA6 Ky) 440
F3d 832, 2006 FED App 97A.
In action in which defendants appealed from judgment of district court convicting them of racketeering, racketeering conspiracy, conspiracy to distribute controlled substances, murder and drug trafficking and sentencing four of defendants to life imprisonment and one defendant to prison term of 262 months, there was no reason to disturb jury's verdict on RICO counts where (1) government had established at trial that defendants functioned as informal organizational
unit of larger organization to enforce collection of drug debts upon orders given to them by others in larger organization; and (2) jury was well within its province to ignore any temporary gaps in leadership or splintering of subgroups in
finding that single criminal enterprise existed during time period alleged in Indictment. United States v Olson (2006,
CA7 Wis) 450 F3d 655.
Auto parts sellers constitute enterprise, despite competition among some of them, where all sellers are engaged in
common purpose of selling alleged counterfeit parts, sellers relied on warehouser for business in business relationships
over several years, and sellers also were engaged in legitimate activities, because sellers were group associated in fact
although not legal entity. Ford Motor Co. v B & H Supply, Inc. (1986, DC Minn) 646 F Supp 975, 1 USPQ2d 1094.
Auto distributors' and dealers' motion to dismiss RICO claims is denied, where plaintiff auto dealer adequately
identified "enterprise" in complaint by claiming that defendants were connected by common interest in falsifying sales
reports to increase their allocation of vehicles, since enterprise may be proved with evidence of group of individuals or
organizations associated in fact who share common purpose and function as continuing unit. Jim Forno's Continental
Motors, Inc. v Subaru Distributors Corp. (1986, ND NY) 649 F Supp 746, 1987-1 CCH Trade Cases P 67427.
Physician's RICO claims are dismissed because there is no "enterprise" despite allegations of "association in fact"
because there is little indication of any decisionmaking structure nor evidence of ongoing organization where
mayor/attorney and others allegedly shared common purpose of harming physician; additionally, no facts are alleged to
show how enterprise is separate from parties and racketeering activity engaged in. Manax v McNamara (1987, WD
Tex) 660 F Supp 657, affd (1988, CA5 Tex) 842 F2d 808, 15 Media L R 1655.
City's RICO claim is defective in part, where city accuses corporation it hired to administer deferred-compensation
plan of securities fraud and other illegal activities, because plan is not valid RICO enterprise under 18 USCS § 1961(4)
since it is neither legal entity nor association in fact. City of Philadelphia v Public Employees Benefit Servs. Corp.
(1994, ED Pa) 842 F Supp 827, CCH Fed Secur L Rep P 98111, RICO Bus Disp Guide (CCH) P 8471.
Where advertisers alleged that newspapers and related individuals reported false circulation figures to independent
auditing company which were then used to charge advertisers inflated rates for advertising, alleged association-in-fact
of newspapers, individuals, and auditing company, which association allegedly had both lawful and unlawful purposes,
did not constitute enterprise since auditing company was itself victim of unlawful purpose and was independent of lawful purpose of circulating newspapers. Crab House of Douglaston, Inc. v Newsday, Inc. (2006, ED NY) 418 F Supp 2d
193.
Where plaintiff workers alleged defendant off-shore drilling servicing companies had each been closely engaged
with defendant labor suppliers for at least three years and each had its own long-standing relationship with labor suppliers for purpose of staffing projects with illegal aliens on ongoing basis, and that over time, each of servicing companies
had regularized their manner of dealing with labor suppliers to point where they worked closely together to fill staffing
needs of each servicing company for fee and that all defendants knew of and participated in illegal worker hiring
scheme to depress wages, allegations were sufficient to allege Racketeer Influenced and Corrupt Organizations Act
"enterprise" under 18 USCS § 1961(4). Cunningham v Offshore Specialty Fabrications, Inc. (2008, ED Tex) 543 F Supp
2d 614 (criticized in Hager v ABX Air, Inc. (2008, SD Ohio) 2008 US Dist LEXIS 23486).
83. Other entities
Real estate business formed by plaintiff was "enterprise" separate from defendants, who ran business while plaintiff
was incarcerated and allegedly used illicit means to obtain ownership interests in enterprise. Jacobson v Cooper (1989,
CA2 NY) 882 F2d 717.
Appellate court reversed summary judgment and remanded for trial issues of fraud, commodities fraud, and breach
of agency relationship, where co-operatives and investor service changed policy on farmers rollover of hedge-to-arrive
contracts, which could reasonably be considered futures contracts. Asa-Brandt, Inc. v ADM Investor Servs. (2003, CA8
Iowa) 344 F3d 738, 62 Fed Rules Evid Serv 422.
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18 USCS § 1961
Where defendants were convicted of conspiracy to murder and murder under 18 USCS § 1959(a)(1), (2), (5), use of
firearm under 18 USCS § 924(c)(1), (2), and murder under 18 USCS § 924(j)(1), (2), evidence was sufficient under 18
USCS § 1959(b)(1), (2), because evidence of defendants' gang's contemporaneous altercation with rival gang was sufficient to permit rational juror to conclude that gang constituted entity engaged in racketeering activity as defined in 18
USCS § 1961 during time period relevant to indictment. United States v Pimentel (2003, CA2 NY) 346 F3d 285, cert den
(2004, US) 160 L Ed 2d 316, 125 S Ct 451.
Business entities may properly be named as defendants as well as jurisdiction-conferring enterprises where allegations suggest that various enterprises were operated by their directors and controlling partners, through pattern of racketeering activity, to detriment of third party. D'Iorio v Adonizio (1982, MD Pa) 554 F Supp 222 (superseded by statute
as stated in A.J. Cunningham Packing Corp. v Congress Financial Corp. (1986, CA3 Pa) 792 F2d 330).
Evidence is sufficient to permit jury to find that "enterprise" existed and that members of enterprise were all linked
together by network of contracts, transactions, and payoffs where evidence showed enterprise consisted of defendants,
other conspirators, partnerships and corporations which defendants and coconspirators controlled or used for purpose of
obtaining unjust enrichment from government contracts for computer services and equipment. United States v Perholtz
(1986, DC Dist Col) 657 F Supp 603.
RICO action charging defendant's real estate business as enterprise which employed several persons and included
partners and corporations sufficiently alleges "enterprise." United States v Weinberg (1987, ED NY) 656 F Supp 1020.
Former employees of brokerage firm fail to properly plead "enterprise" element of RICO claim against firm, where
they allege that in 1982 firm embarked on scheme to recruit them in effort to capture their client bases, and that enterprises involved are (1) their individual client bases and securities brokerage practices, and (2) brokerage firm and individuals who recruited them, because client bases and practices share no common purpose or association and thus cannot
constitute 18 USCS § 1961(4) "enterprise," and even if other "group" is valid "enterprise," it completed its sale goal by
February 1985 when last plaintiff left firm and thus cannot constitute continuing operation contemplated by 18 USCS §
1962(c). Cullen v Paine Webber Group, Inc. (1988, SD NY) 689 F Supp 269.
In manufacturer's suit against service companies and employees regarding their use of computer programs, defendants were entitled to summary judgment as to RICO claims because manufacturer failed to establish fact issue on existence of enterprise under RICO based on testimony regarding "black market" for computer software and equipment.
MGE UPS Sys. v Fakouri Elec. Eng'g, Inc. (2006, ND Tex) 422 F Supp 2d 724.
Unpublished Opinions
Unpublished: Evidence of racketeering enterprise was sufficient for reasonable jury to infer that "Patio Crew" was
enterprise under Racketeer Influenced and Corrupt Organizations Act (RICO) where there was testimony that "Patio
Crew" had core membership that remained constant over 12-year period, established and protected territory in which
only they, or people to whom they gave permission, could sell cocaine and crack cocaine, shared opportunities to distribute cocaine and cocaine base in locations in Texas, Virginia, South and North Carolina, and Connecticut, and adhered to certain rules, including prohibiting cooperation with police and dealing violently with those who did. United
States v Dixon (2006, CA2) 2006 US App LEXIS 4087.
Unpublished: Bank's Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS §§ 1961-1968, claim
against debtor failed, as record did not demonstrate that debtor committed fraud as part of "association-in-fact" under 18
USCS § 1961(4), so bank could not, based on evidence in record, prove "enterprise"; evidence suggested that debtor and
his connection were merely partners in scheme too unsophisticated to be labeled "organized crime," which RICO was
designed to combat. Huntington Nat'l Bank v McCann (In re McCann) (2008, CA5 Tex) 2008 US App LEXIS 4978.
4.Person 84. Generally
"Person", under 18 USCS § 1961(3), is broadly defined to include any individual or entity capable of holding legal
or beneficial interest in property; furthermore, in order to restrict RICO to type of conduct it was intended to proscribe,
RICO person must be one that either poses or has posed continuous threat of engaging in acts of racketeering, which
requirement may not be satisfied if no more is pled than that person has engaged in limited number of predicate racketeering acts. Delta Truck & Tractor, Inc. v J.I. Case Co. (1988, CA5 La) 855 F2d 241, cert den (1989) 489 US 1079,
103 L Ed 2d 836, 109 S Ct 1531.
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18 USCS § 1961
Unincorporated entity was not legal "person" capable of violating RICO, since it was not de facto corporation and
did not have capacity to hold title to property. Fleischhauer v Feltner (1989, CA6 Ohio) 879 F2d 1290, amd (1989,
CA6) 1989 US App LEXIS 13561 and cert den (1990) 493 US 1074, 107 L Ed 2d 1029, 110 S Ct 1122 and cert den
(1990) 494 US 1027, 108 L Ed 2d 611, 110 S Ct 1473.
It would be incongruous to find that, while entity as enterprise cannot be RICO "person," it can be held vicariously
liable for acts of RICO plaintiff; if this were true, all legal enterprises would be found liable under RICO if their employees or agents were involved in perpetrating predicate acts through or against them. Landry v Air Line Pilots Ass'n
Int'l (1990, CA5 Tex) 901 F2d 404.
Political party committee of town is "person" for purpose of RICO claims involving scheme to coerce contribution;
proof of participation by every member is not required. Jund v Hempstead (1991, CA2 NY) 941 F2d 1271.
Member of Chinese gang is "person" as defined by 18 USCS § 1961(3), even if definition restricts reach of statute
to those 21 years of age or older, where gang member was accused of participating in racketeering enterprise for more
than 5 years after his twenty-first birthday. Tsang v United States (1990, SD NY) 749 F Supp 72.
Court dismissed driver's claims against village under Racketeer Influenced and Corrupt Organizations Act (RICO),
18 USCS § 1961 et seq., in driver's action against village and 48 of its present and former officials employees, including
mayors and two judges, alleging that they created scheme under which they purported to enforce traffic and other laws
and collect fines even though village's police power had been transferred to county, because municipality was incapable
of forming requisite criminal intent for RICO liability. Wood v Inc. Vill. of Patchogue (2004, ED NY) 311 F Supp 2d
344.
Plaintiffs' separately identified each defendant in their amended complaint, and through their factual allegations and
information contained in document package, they sufficiently demonstrated how each defendant was integrally involved
in establishing trust, subject of this civil action; thus, there could be no serious doubt that defendants met "person" definition contained in 18 USCS § 1961(3). Williams v Equity Holding Corp. (2007, ED Va) 498 F Supp 2d 831, motion gr,
count dismd, motion to strike gr (2007, ED Va) 2007 US Dist LEXIS 69653.
85. Corporation
Corporation may be a "person" under RICO. Liquid Air Corp. v Rogers (1987, CA7 Ill) 834 F2d 1297, 24 Fed
Rules Evid Serv 254, cert den (1989) 492 US 917, 106 L Ed 2d 588, 109 S Ct 3241 and (ovrld in part as stated in CIB
Bank v Esmail (2004, ND Ill) 2004 US Dist LEXIS 26817) and (ovrld as stated in Equity Residential v Kendall Risk
Mgmt. (2005, ND Ill) 2005 US Dist LEXIS 8273).
Corporation can be held liable under 18 USCS § 1962(a) when it is actually perpetrator or beneficiary, direct or indirect, of pattern of racketeering activity. B.F. Hirsch, Inc. v Enright Refining Co. (1985, DC NJ) 617 F Supp 49.
Complaint sufficiently alleges existence of "persons" under 18 USCS § 1961(3) to withstand motion to dismiss, in
civil RICO action for conspiracy by developer against 3 corporate manufacturers and sellers of mortar additive, even
though corporations argue that they cannot conspire with each other since one corporation wholly owns one of other
corporations and formed third corporation as operating unit, and record does not show whether corporations maintain
common officers and/or directors, have similar marketing images, or have similar trademarks and/or logos, because
exact nature of relationship between corporations is not apparent from pleadings and issues may be more fully considered on motion for summary judgment. Moravian Dev. Corp. v Dow Chemical Co. (1986, ED Pa) 651 F Supp 144.
Acquired corporation is "person" under 18 USCS § 1961(3), and thus may be sued by former shareholder in class
action for participating in allegedly fraudulent takeover of itself, where corporation is alleged to be coconspirator in
scheme, notwithstanding that corporation is itself alleged enterprise under 18 USCS § 1962(d). Barkman v Wabash,
Inc. (1987, ND Ill) 674 F Supp 623.
Corporations taken over by racketeers may not have RICO action against them dismissed, despite argument that
corporations were not perpetrators but were mere pawns of racketeers which used campaign of unfair competition to
gain ground in market for financial printing services, because corporations may be liable under 18 USCS § 1962(a)
when they have benefited from pattern of racketeering activity. Pandick, Inc. v Rooney (1988, ND Ill) 688 F Supp
1288.
86. Governmental unit
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Republic of the Philippines has standing to assert civil RICO claims, since, as governmental body, it is "person"
under 18 USCS § 1961(3), and "foreign nature" of Republic does not deprive it of "statutory personhood." Republic of
Philippines v Marcos (1988, CA9 Cal) 862 F2d 1355, cert den (1989) 490 US 1035, 104 L Ed 2d 404, 109 S Ct 1933.
City is not person for purposes of RICO suit, and therefore discharged police officer's suit for wrongful discharge
under RICO may be maintained only against individual police officials, because city is incapable of forming mens rea
necessary to perform act of racketeering and cannot be liable for punitive damages, applying same policy considerations
of 42 USCS § 1983 cases to RICO actions. Massey v Oklahoma City (1986, WD Okla) 643 F Supp 81 (criticized in
Fox v Maulding (1997, CA10 Okla) 112 F3d 453, RICO Bus Disp Guide (CCH) P 9263).
French government-owned corporation is person for purposes of RICO where corporation was not acting pursuant
to any state directive or engaged in any state action, but rather was acting independently as commercial corporation allegedly to eliminate competition in Asian freight forwarding business in United States. American Bonded Warehouse
Corp. v Compagnie Nationale Air France (1987, ND Ill) 653 F Supp 861.
United States does not have standing to sue for monetary damages under 18 USCS § 1964(c), even though United
States technically falls within definition of RICO "person" under 18 USCS §§ 1961(3) and 1964(c) and seeks recovery
for damages to its own commercial interests, because damage provision of § 1964(c) was closely modelled on that of 15
USCS § 15 and legislative history of and case law interpreting § 15 indicate intent that "carrot" of treble damages remedy be extended only to private parties as incentive to bring civil RICO suits. United States v Bonanno Organized
Crime Family of La Cosa Nostra (1988, ED NY) 683 F Supp 1411, affd (1989, CA2 NY) 879 F2d 20.
Civil racketeering claim is not stated under 18 USCS § 1961(3), where complaint alleges county committed racketeering, because county is "quasi-municipal" corporation and thus, like municipal corporations, not "person"; such corporations are artificial persons unable to form requisite mens rea. Smallwood v Jefferson County Government (1990,
WD Ky) 743 F Supp 502, 54 BNA FEP Cas 1420.
Civil RICO claim against U.S. arising out of judge's 1999 alleged misrepresentation of record, as well as claim alleging U.S., acting through bankruptcy court, engaged in pattern of conduct that included, inter alia, money laundering,
obstruction of justice, bribery, racketeering, theft, fraud, and misrepresentation, is dismissed, because U.S. is not considered "person" that can be sued under 18 USCS §§ 1961(3), 1962, and 1964. Peia v United States Bankr. Courts
(2001, DC Conn) 152 F Supp 2d 226, affd (2003, CA2 Conn) 62 Fed Appx 394, cert den (2003) 540 US 875, 157 L Ed
2d 137, 124 S Ct 223.
Unpublished Opinions
Unpublished: Patent holder's suit against United States Patent and Trademark Office and Food and Drug Administration, alleging unlawful conspiracies in violation of Racketeer Influenced and Corrupt Organizations Act (RICO), 18
USCS § 1961 et seq., was properly dismissed because these government agencies could not be liable under RICO as
United States did not fall within definition of "person" capable of violating RICO under 18 USCS § 1961(3). Pieczenik v
Domantis (2005, CA FC) 120 Fed Appx 317, reh den, reh, en banc, den (2005, CA FC) 125 Fed Appx 283 and cert den
(2005, US) 126 S Ct 382, 163 L Ed 2d 168.
Unpublished: U.S.'s motion for summary affirmance of trial court's dismissal of plaintiff's Racketeer Influenced and
Corrupt Organizations Act (RICO) claims against U.S. and government agencies was granted because established case
law under RICO made it clear that agency of U.S. could not commit crime actionable under RICO, so U.S., as government, could not be liable for criminal acts under RICO, and thus, it could not be liable for damages under civil RICO
provisions. Wolf v United States (2005, CA FC) 127 Fed Appx 499, cert den (2005, US) 126 S Ct 119, 163 L Ed 2d 127,
reh den (2005, US) 126 S Ct 720, 163 L Ed 2d 617.
87. Partnership
RICO claims against brokerage firm partnership and individual partners will not be dismissed because partnership
may be both "enterprise" and "person" under RICO. Bergen v Rothschild (1986, DC Dist Col) 648 F Supp 582, CCH
Fed Secur L Rep P 93143.
88. Relation to "enterprise"
Although solitary entity can not, as matter of law, simultaneously constitute both RICO "person," whose conduct is
prohibited, and entire RICO "enterprise," whose affairs are impacted by RICO person, no reason exists why single enti-
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ty could not be both RICO "person" and one of number of members of RICO "enterprise," as term "person," as defined
at 18 USCS § 1961(3), includes any individual or entity capable of holding legal or beneficial interest in property.
Cullen v Margiotta (1987, CA2 NY) 811 F2d 698, 22 Fed Rules Evid Serv 877, 7 FR Serv 3d 785, cert den (1987) 483
US 1021, 97 L Ed 2d 764, 107 S Ct 3266 and (ovrld as stated in Cruz v Kennedy (1998, SD NY) 1998 US Dist LEXIS
15599) and (ovrld in part as stated in Toys "R" Us, Inc. v Feinberg (1999, CA2 NY) 1999 US App LEXIS 29833) and
(criticized in Weston v AmeriBank (1999, WD Mich) 1999 US Dist LEXIS 20287).
It would be incongruous to find that, while entity as enterprise cannot be RICO "person," it can be held vicariously
liable for acts of RICO plaintiff; if this were true, all legal enterprises would be found liable under RICO if their employees or agents were involved in perpetrating predicate acts through or against them. Landry v Air Line Pilots Ass'n
Int'l (1990, CA5 Tex) 901 F2d 404.
Requirement that "person" and "enterprise" be different entities is not met by mere showing that corporation committed pattern of predicate acts in conduct of its own business. Board of County Comm'rs v Liberty Group (1992,
CA10 NM) 965 F2d 879, CCH Fed Secur L Rep P 96818, RICO Bus Disp Guide (CCH) P 8018, cert den (1992) 506 US
918, 121 L Ed 2d 247, 113 S Ct 329 and (criticized in Morrison Knudsen Corp. v Fireman's Fund Ins. Co. (1999, CA10
Colo) 175 F3d 1221, 1999 Colo J C A R 2720).
For purposes of RICO Act, term "enterprise" was meant to refer to being different from, not same as or part of,
person whose behavior RICO was designed to prohibit, and, failing that, to punish. In re Action Industries Tender Offer (1983, ED Va) 572 F Supp 846, CCH Fed Secur L Rep P 99560.
Corporation that is enterprise for RICO purposes is not person for same purposes, since RICO Act condemns only
criminal acts of persons, not enterprises. Umstead v Durham Hosiery Mills, Inc. (1984, MD NC) 592 F Supp 1269.
Under RICO, person and enterprise must be distinct entities. Tarasi v Dravo Corp. (1985, WD Pa) 613 F Supp
1235.
RICO claims fail against National Bank because bank which was "person" subject to liability cannot also be "enterprise" through which two corporations allegedly effected fraudulent goals. Satellite Financial Planning Corp. v
First Nat'l Bank (1986, DC Del) 646 F Supp 118.
89.--Under 18 USCS § 1962(a), (c), or (d)
Corporation engaging in racketeering activities which is direct or indirect beneficiary of pattern of racketeering activity can be both "person" and "enterprise" under 18 USCS §§ 1962(a) and (d), but not (c); thus, plaintiffs properly
plead that certain defendants as corporations were enterprises under §§ 1962(a) and (d), even if they are same as persons
involved as defendants, although such allegations do not support claim under § 1962(c). United Energy Owners Committee, Inc. v United States Energy Management Systems, Inc. (1988, CA9 Cal) 837 F2d 356, 10 FR Serv 3d 253.
Under 18 USCS § 1962(c), "person" alleged to be engaged in racketeering activity must be entity distinct from "enterprise"; thus, dismissal of RICO claim is proper, where complaint fails to identify defendant, distinct from enterprise,
which conducted enterprise's activities through pattern of racketeering activity. Odishelidze v Aetna Life & Casualty
Co. (1988, CA1 Puerto Rico) 853 F2d 21, 1988-2 CCH Trade Cases P 68167, 11 FR Serv 3d 1410.
Entity functioning as "innocent victim" of racketeering activity and thus able to be 18 USCS § 1962(c) enterprise
may also function as perpetrator of other such activity and thus be person under § 1962(c). Rose v Bartle (1989, CA3
Pa) 871 F2d 331, 13 FR Serv 3d 430 (criticized in Goren v New Vision Int'l (1998, CA7 Ill) 156 F3d 721, RICO Bus
Disp Guide (CCH) P 9555) and (criticized in Montgomery v De Simone (1998, CA3 NJ) 159 F3d 120) and (criticized in
Northern Ind. Gun & Outdoor Shows v City of S. Bend (1998, CA7 Ind) 163 F3d 449).
For violation of 18 USCS § 1962(a), unlike § 1962(c), offender and enterprise need not be separate entity. Busby v
Crown Supply (1990, CA4 Va) 896 F2d 833, 114 CCH LC P 12032 (criticized in Sadighi v Daghighfekr (1999, DC SC)
36 F Supp 2d 279, RICO Bus Disp Guide (CCH) P 9665) and (criticized in Fogie v THORN Ams., Inc. (1999, CA8
Minn) 190 F3d 889, RICO Bus Disp Guide (CCH) P 9748) and (criticized in Lockheed Martin Corp. v Boeing Co.
(2005, MD Fla) 357 F Supp 2d 1350, 18 FLW Fed D 381).
Under 18 USCS § 1962(a) defendant company can be named as both "person" and "enterprise" in indictment
charging company with allegedly receiving proceeds from racketeering activity and then investing them in its own enterprise, because 1962 does not require "person" and "enterprise" to be distinct entities. United States v Freshie Co.
(1986, ED Pa) 639 F Supp 441.
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Corporation accused of claims under § 1962(c) of RICO may not be deemed an "enterprise" and simultaneously be
liable as "person" conducting affairs of enterprise through pattern of racketeering activity. Abelson v Strong (1986, DC
Mass) 644 F Supp 524, CCH Fed Secur L Rep P 93112.
Purposes underlying RICO as well as 18 USCS § 1961(3), (4) definitions of both "person" and "enterprise" to include corporation such as defendant employer indicate Congress's intent that person and enterprise need not be distinct
entities under § 1962(a). Smith v MCI Telecommunications Corp. (1987, DC Kan) 678 F Supp 823.
90.--Particular cases
Savings and loan association was proper plaintiff in civil RICO action against its former president, even though
savings and loan alleged itself to be "enterprise" whose affairs president conducted through pattern of racketeering activity, since 18 USCS § 1964(c) provides that any person injured in his business or property by reason of RICO violation may sue therefor, and 18 USCS § 1961(3) defines "person" to include any individual or entity capable of holding a
legal or beneficial interest in property. Sun Sav. & Loan Ass'n v Dierdorff (1987, CA9 Cal) 825 F2d 187, 8 FR Serv 3d
808.
Group of corporations and individuals charged as RICO enterprise was properly found to exist separate and apart
from defendant individual, and it is immaterial to proof of separate enterprise that only one individual was named as
defendant, since associated-in-fact enterprise need not be conspiracy, with its members sharing as common objective
commission of crime. United States v Feldman (1988, CA9 Cal) 853 F2d 648, cert den (1989) 489 US 1030, 103 L Ed
2d 222, 109 S Ct 1164.
Under RICO, enterprise itself cannot also be person plaintiff charges with conducting illegal enterprise; therefore
bank charged with selling plaintiff's defective housing must be dismissed from suit where complaint does not allege that
bank conducted any other enterprise harmful to plaintiff. Arzuaga-Collazo v Oriental Federal Sav. Bank (1990, CA1
Puerto Rico) 913 F2d 5.
Investor's complaint against brokerage firm and its employees for fraud involving investment in account trading
commodities futures fails to state RICO claim because investor has failed to allege RICO violations by person or persons separate from RICO enterprise. Schofield v First Commodity Corp. (1985, DC Mass) 638 F Supp 4, CCH Fed
Secur L Rep P 92065, affd (1986, CA1 Mass) 793 F2d 28.
Brokerage firm is not liable under 18 USCS § 1961 for alleged excessive dealing by broker in investors' account
because firm cannot be simultaneously "enterprise" and "person" who conducted affairs of enterprise through pattern of
racketeering activity. Frota v Prudential-Bache Secur., Inc. (1986, SD NY) 639 F Supp 1186, CCH Fed Secur L Rep P
92843.
Claim that brokerage firm violated 18 USCS § 1961 is dismissed where investors allege conspiracy between firm
and broker to fraudulently induce investors to purchase speculative options because brokerage house cannot be simultaneously "enterprise" and "person" conducting affairs of enterprise through pattern of racketeering activity; even if
claim was not barred on grounds that firm could not be both "person" and "enterprise," claim would still have to be dismissed because allegation that firm failed to supervise broker and recklessly disregarded his wrongdoing fails to show
that firm played any part in broker's misdeeds. Levine v Merrill Lynch, Pierce, Fenner & Smith, Inc. (1986, SD NY)
639 F Supp 1391, CCH Fed Secur L Rep P 92841.
Claim that individual debtor violated 18 USCS § 1961 is dismissed where creditors allege that debtor fraudulently
borrowed money without intending to pay it back because debtor cannot be simultaneously "person" and "enterprise."
Zahra v Charles (1986, ED Mich) 639 F Supp 1405, CCH Fed Secur L Rep P 92883.
Complaints of investors in lease and service agreements regarding energy conservation devices adequately distinguish between "persons" and "enterprise" involved under 18 USCS § 1961 where each promoter of agreements is "person" and promoters allegedly interacted in common scheme to sell agreements. In re Energy Systems Equipment
Leasing Sec. Litigation (1986, ED NY) 642 F Supp 718, CCH Fed Secur L Rep P 92920.
Bank is not liable under 18 USCS § 1962(c) and doctrine of respondeat superior for alleged conduct of its employee
in RICO action by borrowers who claim bank delivered fraudulent notices overcharging them for interest where bank is
alleged "enterprise," because "person" and "enterprise" must be distinct and bank cannot be liable, as "person," for conducting itself as "enterprise." Haroco, Inc. v American Nat'l Bank & Trust Co. (1986, ND Ill) 647 F Supp 1026.
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Telephone ratepayer's RICO claim against telephone company is dismissed where complaint named company as
both "person" and "enterprise" in scheme to influence utility commission, because 18 USCS § 1962 requires allegations
of existence of enterprise separate and distinct from identified person. H.J., Inc. v Northwestern Bell Tel. Co. (1986,
DC Minn) 648 F Supp 419, affd (1987, CA8 Minn) 829 F2d 648, revd on other grounds, remanded (1989) 492 US 229,
106 L Ed 2d 195, 109 S Ct 2893 and reinstated, on remand (1990, DC Minn) 734 F Supp 879, affd (1992, CA8 Minn)
954 F2d 485, cert den (1992) 504 US 957, 119 L Ed 2d 228, 112 S Ct 2306.
18 USCS § 1961 action against brokerage firm is dismissed where stock purchaser alleges that firm and salesman of
firm were engaged in RICO enterprise and that they had common scheme, plan or motive to defraud stock purchaser
because brokerage firm cannot at same time be person that conducted affairs of enterprise through pattern of racketeering activity and "enterprise" in question. Morris v Gilbert (1986, ED NY) 649 F Supp 1491, CCH Fed Secur L Rep P
93132.
RICO complaint is dismissed where action arose out of termination of lease purchase agreement because lessor
corporation is alleged as both RICO defendant and RICO enterprise and under RICO persons and enterprise must be
different and this rule cannot be circumvented by theory of vicarious liability. Brent Liquid Transport, Inc. v GATX
Leasing Corp. (1986, ND Miss) 650 F Supp 467.
Investment firm can be held liable under 42 USCS § 1962(a) where firm was perpetrator or beneficiary of racketeering activity, since firm can be both "enterprise" and "person" for purposes of § 1962(a). Roche v E.F. Hutton & Co.
(1986, MD Pa) 658 F Supp 315, affd without op (1988, CA3 Pa) 862 F2d 307 and affd without op (1988, CA3 Pa) 862
F2d 310 and affd without op (1989, CA3 Pa) 888 F2d 1382.
RICO action brought by customer of brokerage firm against brokerage firm and two of its officers must be dismissed for failure adequately to allege existence of enterprise, where customer attempted to recover from firm as culpable "person" and alleged that firm was enterprise through which pattern of racketeering activity was conducted, since
rule in Eighth Circuit is that "person" charged with RICO violation may not be same entity alleged to be enterprise;
even if above constituted enterprise, RICO action would still fail since enterprise alleged had no function apart from
fraudulent acts alleged as required by Eighth Circuit. Hanline v Sinclair Global Brokerage Corp. (1987, WD Mo) 652
F Supp 1457, dismd without op (1987, CA8 Mo) 815 F2d 713.
RICO claims against brokerage firm and officers are dismissed, because brokerage firm and its employee are same
entity and thus cannot be both "person" and "enterprise." Ellis v Merrill Lynch & Co. (1987, ED Pa) 664 F Supp 979,
CCH Fed Secur L Rep P 93752, summary judgment den, dismd (1989, ED Pa) 1989 US Dist LEXIS 14720.
Investor adequately states RICO claim against individual broker, but not against brokerage firm, since allegations
of churning and fraudulent misrepresentation by broker are deemed adequate to meet elements of continuity and relationship required to allege pattern of racketeering activity required by 18 USCS § 1961(5), but § 1962(c) draws distinction between "person" alleged to have effected pattern of racketeering activity and "enterprise" that person is associated
with, and investor alleged merely that brokerage firm had abdicated duty to supervise employees, not that firm itself
actively committed alleged racketeering activity. Cruse v Equitable Sec. of New York, Inc. (1987, SD NY) 678 F Supp
1023, CCH Fed Secur L Rep P 93290.
RICO complaint is dismissed as to defendant named as "Bonanno Organized Crime Family," where Family is alleged to exist only as "association in fact" enterprise, because Family cannot constitute RICO "person" capable of violating 18 USCS § 1962(a), (c) or (d) and is not appropriate RICO defendant. United States v Bonanno Organized
Crime Family of La Cosa Nostra (1988, ED NY) 683 F Supp 1411, affd (1989, CA2 NY) 879 F2d 20.
In plaintiff employee's Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq., action against defendants, his employer, Workers Compensation fund, and doctor, alleging that defendants engaged in
fraudulent enterprise to deny him of his workers' compensation benefits, complaint sufficiently alleged "enterprise" as
distinct from "person" because, although complaint failed to expressly denominate each defendant as "person," it could
have been reasonably read to do so implicitly; while one paragraph alleged that defendants' workers compensation officials formed "enterprise" along with doctor, it also alleged that members of enterprise engaged in pattern of racketeering
that was described; thus, complaint alleged that "members of enterprise," rather than enterprise itself, engaged in racketeering activity, so one could reasonably have inferred that they were requisite "persons;" moreover, because 18 USCS
§ 1961(3) defined "person" singularly, rather than collectively, one could reasonably assume that each defendant constituted distinct "person." Moon v Harrison Piping Supply (2005, ED Mich) 375 F Supp 2d 577.
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Hospitals failed to state claim under 18 USCS § 1962(d), part of Racketeer Influenced and Corrupt Organizations
Act (RICO) against corporation that allegedly engaged in fraudulent billing for medical transcription services, as corporation, as alleged RICO "person" under 18 USCS § 1961(3), was not sufficiently distinguished from alleged RICO
enterprise under § 1961(4)--corporation and subsidiary as association-in-fact. S. Broward Hosp. Dist. v MedQuist, Inc.
(2007, DC NJ) 516 F Supp 2d 370, affd (2007, CA3 NJ) 2007 US App LEXIS 29258.
Employees injured in chemical plant explosion failed to state civil claim under Racketeer Influenced and Corrupt
Organizations Act (RICO), 18 USCS § 1964(c), because their allegation that their corporate employer, its subsidiaries,
its insurer, and its law firm conspired to deprive them of workers' compensation benefits failed; their predicate claim
was based on separate lawsuit filed eight years previously, act that was too isolated and discrete to satisfy continuous
threat requirement, which was required to meet definition of RICO "person" under 18 USCS § 1961(3). Bradley v Phillips Petroleum Co. (2007, SD Tex) 527 F Supp 2d 625, motion den, motion den, as moot, dismd (2007, SD Tex) 527 F
Supp 2d 661.
In order for individual to be held liable as "person," under RICO Act, he must have conducted or participated in alleged enterprise's affairs, and must have had some part in directing those affairs; however, plaintiff customer's description of alleged enterprise suggested structure in which individual could not have directed enterprise's affairs, since allegations in complaint indicated that tax preparation company directed business of franchises, and not other way around;
fact that individual may have exerted control over part of enterprise, his own franchises, was not sufficient. Wooley v
Jackson Hewitt, Inc. (2008, ND Ill) 540 F Supp 2d 964.
5.Unlawful Debt 91. Gambling
18 USCS § 1961(6) defining unlawful debt, applies in state that forbids gambling that has no specific statutory proscription of business of gambling. United States v Salinas (1977, CA5 Tex) 564 F2d 688, cert den (1978) 435 US 951,
55 L Ed 2d 800, 98 S Ct 1577.
Where state law defines bookmaking as one means of promoting gambling punishable by sentence up to five years,
bookmaking satisfies requirement of 18 USCS § 1961 that predicate act involving gambling be punishable under state
law by imprisonment for more than one year. United States v Sutera (1991, CA8 Mo) 933 F2d 641.
Credit card companies that had allowed debtors to use credit card to purchase gambling credits on Internet site had
not engaged in collection of unlawful debt under 18 USCS § 1961(6) where neither debtor raised specter of usury and
companies' conduct did not involve any violation of state or federal gambling law. In re Mastercard Int'l Inc. Internet
Gambling Litig. (2002, CA5 La) 313 F3d 257, RICO Bus Disp Guide (CCH) P 10377.
92. Interest
Interest rates based on prime rate do not give rise to "unlawful debt" as defined in 18 USCS § 1961 unless rate is at
least twice usurious rate under state or federal law; thus, consumer loan company's complaint that financier forced it out
of business by charging rate of interest illegal under parties' contract, but which did not allege twice usurious rate, failed
to state valid civil RICO claim for predicate offense of unlawful debt. Blount Financial Services, Inc. v Walter E. Heller & Co. (1987, CA6 Tenn) 819 F2d 151, 1987-1 CCH Trade Cases P 67580 (criticized in United States v Hanley
(1999, CA9 Nev) 190 F3d 1017, 99 CDOS 7389, 99 Daily Journal DAR 9798) and (criticized in System Mgmt., Inc. v
Loiselle (2000, DC Mass) 91 F Supp 2d 401, RICO Bus Disp Guide (CCH) P 9859) and (criticized in System Mgmt.,
Inc. v Loiselle (2000, DC Mass) 112 F Supp 2d 112).
Proof of civil liability for collection of "unlawful debt" under RICO (18 USCS §§ 1961 et seq.) requires showing
that debt was unenforceable because of state or federal laws relating to usury, debt was incurred in connection with
business of lending money at usurious rate, usurious rate was at least twice enforceable rate, and that as a result plaintiff
was injured in its business or property; thus, loan transaction by savings and loan association alleged to violate laws and
regulations addressing only method of loan collection or kind of credit or property that may be given for loan, but not
amount of interest that can be charged, does not violate 18 USCS § 1962 because such transaction does not violate law
relating to usury, and even assuming collection of unlawful debt, claim must fail where there is no allegation that association was in business of making usurious transactions or that it received rate on loan over twice permissible rate.
Sundance Land Corp. v Community First Federal Sav. & Loan Asso. (1988, CA9 Cal) 840 F2d 653, 1988-1 CCH Trade
Cases P 67924.
While respondent "payday loan" customer had only filed state court claims under Georgia Industrial Loan Act,
O.C.G.A. §§ 7-3-1 et seq., Georgia Usury Statute, O.C.G.A. § 7-4-2(a)(2), Georgia Criminal Usury Statute, O.C.G.A. §
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7-4-18(a), Georgia Payday Lending Statute, O.C.G.A. §§ 16-17-1 et seq., Georgia Check Cashing Statute, O.C.G.A. §§
7-1-700 et seq., and Georgia Racketeer Influenced and Corrupt Organizations (RICO) Act, O.C.G.A. §§ 16-14-1 et seq.,
in customer's state court action against petitioners, bank and its affiliates, federal court had federal question subject
matter jurisdiction over petitioners' independent action to compel arbitration in connection with those claims and petitioners' declaratory judgment claim that interest rate was governed by § 521, part of Depository Institutions Deregulation and Monetary Control Act of 1980, 12 USCS § 1831d, codified as § 27, part of Federal Depository Insurance Act,
because facts alleged by customer in its state court complaint could also support federal racketeering action under 28
USCS §§ 1961, 1962 and without binding agreement or court decision, customer could always amend state court complaint to add federal RICO claim under Fed. R. Civ. P. 15; dismissal was reversed. Cmty. State Bank v Strong (2007,
CA11 Ga) 485 F3d 597, 20 FLW Fed C 559.
Civil action based on claim that promissory note from plaintiff seller of shares of corporation to defendant bank is
usurious is properly dismissed, although alleged concealed actual rate is more than twice enforceable rate under New
York's usury laws, because complaint fails to plead facts indicating that defendant bank vice-president acted with bank's
authorization, actual or apparent, or that bank benefited from monies received by bank vice-president, and because
payments made by lender to borrower's accounts for services in negotiating or procuring loan were not basis for establishing usury under law of New York. Kovian v Fulton County Nat'l Bank & Trust Co. (1986, ND NY) 647 F Supp
830.
Borrowers fail to state valid RICO claim against lenders despite lenders' clear violation of state lending laws by
charging excessive points, because RICO "unlawful debt" under § 1961(6) must be at "usurious rate at least twice enforceable rate," and points being only relatively minor component of overall rate of interest, charging of twice allowable
points does not amount to loan of money at twice enforceable rate. Reidy v Meritor Sav., F.S.B. (1989, DC Dist Col)
705 F Supp 39, affd without op (1989, App DC) 281 US App DC 201, 888 F2d 898.
Borrowers' RICO claim against automobile dealer who lent them money must fail, even if dealer, after being approached by owners of gas station he patronized, made loans at usurious rate, because borrowers' failure to establish that
dealer was in "business of lending money" within meaning of 18 USCS § 1961(6) completely defeats their RICO claim.
Robidoux v Conti (1990, DC RI) 741 F Supp 1019.
RICO claim based on alleged collection of unlawful debt must fail, where defendant contends loans plaintiff obtained were business loans and references several portions of record in support of his argument, because plaintiff fails to
go beyond bare allegations of her pleading that loans were consumer loans subject to usury laws she cites for purposes
of showing 18 USCS § 1961(6) "unlawful debts." Nelson v Nationwide Mortg. Corp. (1991, DC Dist Col) 758 F Supp
747.
B.Predicate Acts 93. Generally
Because violation of state law was only class A misdemeanor permitting one year maximum sentence, it does not
fall within RICO's definition of racketeering activity, which requires that predicate state law violation be punishable by
imprisonment for more than one year. United States v Malizia (1983, CA2 NY) 720 F2d 744.
Where objective of conspiracy is not RICO substantive offense, government must prove that defendant agreed to
commission of at least two predicate acts of racketeering, and such acts need not actually occur; defendant need only
agree to commission of such acts. United States v Beale (1991, CA11 Fla) 921 F2d 1412, 32 Fed Rules Evid Serv 783,
cert den (1991) 502 US 829, 116 L Ed 2d 71, 112 S Ct 99, 112 S Ct 100 and cert den (1991) 502 US 894, 116 L Ed 2d
217, 112 S Ct 264.
RICO proscribes use, as predicate act, of any conduct that would be actionable as securities fraud and, where such
claims are unrelated to other predicate acts and share only some participants, claims are insufficient to establish relatedness. Howard v America Online, Inc. (2000, CA9 Cal) 208 F3d 741, 2000 CDOS 2454, 2000 Daily Journal DAR
3307, RICO Bus Disp Guide (CCH) P 9872, cert den (2000) 531 US 828, 148 L Ed 2d 40, 121 S Ct 77.
Witness tampering is actionable under 18 USCS § 1512 only if it takes place in official proceeding, which is defined in 18 USCS § 1515(a)(1) to include only federal proceedings; accordingly, tampering with witness in state judicial
proceeding is not predicate act under Racketeer Influenced and Corrupt Organizations Act, 18 USCS §§ 1961-1968.
Deck v Engineered Laminates (2003, CA10 Kan) 349 F3d 1253, 20 BNA IER Cas 1138.
Dismissal of father's second complaint was proper because his vague and conclusory allegations of fraud failed to
come anywhere near satisfying specificity requirements of Fed. R. Civ. P. 9(b), which required that predicate acts under
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Racketeer Influenced and Corrupt Organizations Act 18 USCS §§ 1961 et seq., based on fraud had to be pled with specificity to provide clear notice of factual basis of predicate acts to defendants. Andrews v Heaton (2007, CA10 Okla) 483
F3d 1070.
18 USCS § 1961 et seq. was designed primarily as additional tool for prevention of racketeering activity which
consists in part of commission of number of other crimes constituting pattern of such activity; Government cannot
charge someone with series of crimes which would constitute pattern of racketeering activity but not with engaging in
such activity or, conversely, only with engaging in racketeering activity without being able to convict with respect to
underlying crimes. United States v Pray (1978, MD Pa) 452 F Supp 788, CCH Fed Secur L Rep P 96463.
Fact that predicate crime may also be actionable under state fraud laws does not make RICO inapplicable. Hellenic Lines, Ltd. v O'Hearn (1981, SD NY) 523 F Supp 244.
Civil RICO plaintiffs fail to make out prima facie showing of pattern of racketeering activity where plaintiffs did
not prove by preponderance of evidence that defendant managing partner committed at least two federal crimes and that
those crimes together formed "pattern" of criminal conduct, since plaintiffs failed to show that defendant committed any
of alleged predicate acts. Stainton v Tarantino (1986, ED Pa) 637 F Supp 1051.
Government successfully showed that civil RICO defendant committed 2 predicate racketeering acts where government showed defendant's guilty pleas in state court to first-degree coercion and fifth-degree conspiracy, because
state-court judgments have collateral estoppel effect in subsequent federal proceeding. United States v Private Sanitation Indus. Ass'n (1992, ED NY) 811 F Supp 808, affd (1993, CA2 NY) 995 F2d 375, RICO Bus Disp Guide (CCH) P
8311.
Government cannot use allegations of counts on which defendants were acquitted as predicate acts to establish
RICO conspiracy and substantive RICO charges, because direct estoppel bars government from relitigating those issues
necessarily decided by jury's partial acquittal, but government is not precluded from proving that agreement to commit
certain crimes, predicate acts, existed, although government may not prove that agreement with evidence of underlying
crime of which jury has already acquitted defendant. United States v Shenberg (1993, SD Fla) 828 F Supp 968, 7 FLW
Fed D 342, app dismd (1996, CA11 Fla) 90 F3d 438, 10 FLW Fed C 164 and subsequent app (1996, CA11 Fla) 89 F3d
1461, 45 Fed Rules Evid Serv 58, 10 FLW Fed C 165, cert den (1997) 519 US 1117, 136 L Ed 2d 847, 117 S Ct 961 and
cert den (1997) 522 US 1014, 139 L Ed 2d 487, 118 S Ct 598, reh den (1998) 522 US 1099, 139 L Ed 2d 885, 118 S Ct
900, subsequent app (1998, CA11 Fla) 146 F3d 871, cert den (1999) 525 US 1112, 142 L Ed 2d 785, 119 S Ct 886.
Court rejected defendants' contentions that investor had failed to sufficiently allege predicate acts, relatedness, or
sufficient pattern of racketeering activity; thus, defendants' Fed. R. Civ. P. 12(b)(6) motion to dismiss investor's claims
under Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1961 et seq., was denied. Gintowt v Tl Ventures
(2002, ED Pa) 239 F Supp 2d 580.
Corporation's 42 USCS § 1983 action against several municipalities alleging violations of Racketeer Influenced and
Corrupt Organizations Act was dismissed for failure to state cause of action because municipalities could not have
formed requisite criminal intent to satisfy predicate offense requirement. Interstate Flagging, Inc. v Town of Darien
(2003, DC Conn) 283 F Supp 2d 641.
Plaintiff's claims under 18 USCS § 1962(b), (c), and (d), part of Racketeer Influence and Corrupt Organization Act
(RICO), 18 USCS §§ 1961-1968, were dismissed because while complaint properly alleged enterprise under 18 USCS §
1961(4), only acts alleged in complaint that qualified as predicate acts were mail fraud, financial institution fraud, and
money laundering, and no allegations suggested that any RICO defendants engaged in activities that constituted "specified unlawful activity" within meaning of money laundering statute, 18 USCS § 1956. Starfish Inv. Corp. v Hansen
(2005, ND Ill) 370 F Supp 2d 759.
94. Arson
Acts of racketeering under RICO include arsons punishable under state law by imprisonment for more than one
year or crimes indictable under federal mail fraud laws or federal laws that prohibit interstate travel with intent to commit arson, and each of those acts constitute separate instance of racketeering activity under RICO. United States v
Starnes (1981, CA7 Ill) 644 F2d 673, cert den (1981) 454 US 826, 70 L Ed 2d 101, 102 S Ct 116 and (criticized in
Truck Ins. Exch. v Kafka (1995, ND Ill) RICO Bus Disp Guide (CCH) P 8873).
95. Bribery
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Generic description of bribery is conduct which is intended, at least by alleged briber, as assault on integrity of
public office or official action; test for determining whether charged acts fit into generic category of predicate offense is
whether indictment charges type of activity generally known or characterized in proscribed category, namely, any act or
threat involving bribery (18 USCS §§ 1961(1) and 1962(c)). United States v Forsythe (1977, CA3 Pa) 560 F2d 1127.
Predicate act of bribery was established where defendant expressly admitted to bribery conspiracy in plea allocution, and where evidence showed $ 800 check together with entry in cash disbursement journal authorizing check, and
trial testimony of government informants. United States v Private Sanitation Indus. Ass'n (1993, CA2 NY) 995 F2d
375, RICO Bus Disp Guide (CCH) P 8311.
Neither misapplication of public funds nor concealment of illicit income is "bribery" within meaning of 18 USCS §
1961(1)(A), part of Racketeer Influenced and Corrupt Organizations Act. United States v Genova (2003, CA7 Ill) 333
F3d 750, reh den (2003, CA7 Ill) 2003 US App LEXIS 16935.
"Bribery" within meaning of 18 USCS § 1961 is limited to payment given in exchange for exercise of governmental
power. United States v Sisk (1979, MD Tenn) 476 F Supp 1061.
RICO indictment based on crimes arising from alleged conspiracy to bribe officials of tourist board to obtain and
retain advertising contract need not be dismissed, where indictment charges violation of 15 USCS § 78dd-2 as basis for
violation of 18 USCS § 1952, which is predicate act for RICO offense charged, because alleged "bootstrapping" of specific statute into general statute into RICO predicate is proper so long as indictee is not convicted and punished under 2
separate crimes for single criminal act. United States v Young & Rubicam, Inc. (1990, DC Conn) 741 F Supp 334.
Mayor's violation of Illinois official misconduct statute in failing to disclose lawyer fee kickback scheme with city
prosecutor's law firm as source of income on his statements of economic interest involved solely acts committed to
conceal bribery, thus they did not constitute act of bribery under either Illinois or federal law and, as such, could not
serve as RICO predicate act; mere filing of false statements concerning mayor's statements of economic interest also did
not constitute bribery for RICO purposes. United States v Genova (2002, ND Ill) 187 F Supp 2d 1015, affd in part and
revd in part, remanded, vacated, in part (2003, CA7 Ill) 333 F3d 750, reh den (2003, CA7 Ill) 2003 US App LEXIS
16935.
96.--State law
Government does not prove that defendant violated state bribery statute and such alleged charge of bribery cannot
serve as basis for offenses for defendant's conviction under Racketeer Influenced and Corrupt Organizations Act (18
USCS § 1962) where government fails to show that defendant, while special bailiff for County Circuit Court, conferred
any pecuniary benefit upon or directed any communication to judge. United States v Cissell (1983, CA6 Ky) 700 F2d
338.
Any state statute proscribing conduct which could be generically defined as bribery can be basis for predicate act
under 18 USCS § 1961, and state statute proscribing unlawful acceptance of payment knowing that it was given to reward past or future favors constitutes statute proscribing bribery under RICO despite fact that state statute does not require corrupt intent or agreement to perform quid pro quo, and despite evidence of separate state statute explicitly prohibiting "bribery"; furthermore, parenthetical clause "relating to bribery" in 18 USCS § 1961(1)(B) describes 18 USCS §
201 but does not limit incorporation of acts indictable under that section as RICO predicate acts. United States v Garner (1987, CA7 Ill) 837 F2d 1404, 24 Fed Rules Evid Serv 476, cert den (1988) 486 US 1035, 100 L Ed 2d 608, 108 S
Ct 2022 and cert den (1988) 487 US 1240, 101 L Ed 2d 945, 108 S Ct 2914 and cert den (1988) 488 US 898, 102 L Ed
2d 232, 109 S Ct 244.
District Court did not commit reversible error by instructing jury in connection with conspiracy count under RICO
(18 USCS §§ 1961 et seq.) on definition and elements of Florida bribery statute but refusing to deliver additional instruction setting out specific elements required to prove state violation when defendant is public official accused of accepting bribe rather than person charged with offering bribe, since references to state law only serve definitional purpose of generally identifying kind of activity made illegal by federal statute. United States v Casamayor (1988, CA11
Fla) 837 F2d 1509, 24 Fed Rules Evid Serv 1001, cert den (1989) 488 US 1017, 102 L Ed 2d 803, 109 S Ct 813.
Racketeering activity under RICO includes any act involving bribery which is "chargeable under state law and
punishable by imprisonment for more than one year"; this language was not intended to incorporate various states' procedural and evidentiary rules, but was meant to define, in more generic sense, wrongful conduct that constitutes predicates for federal racketeering charge; thus, state rules governing double jeopardy and consecutive sentencing do not
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affect generic definition of crime of bribery, and defendant's bribes therefore properly constituted two RICO predicate
acts. United States v Friedman (1988, CA2 NY) 854 F2d 535, 26 Fed Rules Evid Serv 444, cert den (1989) 490 US
1004, 104 L Ed 2d 153, 109 S Ct 1637 and (criticized in United States v Richards (2000, ED NY) 94 F Supp 2d 304) and
(criticized in United States v Saada (2000, CA3 NJ) 212 F3d 210, 53 Fed Rules Evid Serv 1377).
State commercial bribery statute, which prohibits enumerated classes of people from knowingly violating or agreeing to violate duty of fidelity, and requires proof that accused accepted benefit as consideration for violating such duty,
provides sufficient notice that conduct contemplated by alleged conspiracy, involving agreement to accept money in
exchange for awarding public service contracts to certain suppliers, was prohibited so as to serve as predicate acts for
RICO prosecution. United States v Gaudreau (1988, CA10 Colo) 860 F2d 357.
In order to find defendant guilty of underlying act of bribery as proscribed by state statute, it was not necessary for
jury to determine that contractors who paid money to him actually received benefit; it was only necessary to prove that
defendant was public employee, that contractors paid money to him with intent of influencing act related to his public
employment, and that he accepted money knowing that contractors paid it to him in order to influence performance by
him of any act relating to his public employment; accordingly District Court's instruction to jury accurately reflected
elements of state bribery offense, and District Court did not err by failing to direct verdict of acquittal on 18 USCS §
1962(c) racketeering charge. United States v Hocking (1988, CA7 Ill) 860 F2d 769, reh, en banc, den (1988, CA7)
1988 US App LEXIS 17682.
County employees' allegations that criminal proceedings were conducted against them with no legitimate law enforcement purpose by county employees who were members of particular political party at behest of other county employees who were members of party through offers of benefit to political careers and threats to careers are sufficient
bribery allegations under RICO (18 USCS §§ 1961 et seq.) since they constitute conduct proscribed under state law.
Rose v Bartle (1989, CA3 Pa) 871 F2d 331, 13 FR Serv 3d 430 (criticized in Goren v New Vision Int'l (1998, CA7 Ill)
156 F3d 721, RICO Bus Disp Guide (CCH) P 9555) and (criticized in Montgomery v De Simone (1998, CA3 NJ) 159
F3d 120) and (criticized in Northern Ind. Gun & Outdoor Shows v City of S. Bend (1998, CA7 Ind) 163 F3d 449).
720 Ill. Comp. Stat. 5/33-3(c) does not read like definition of bribery, and therefore, may not be used as predicate
offense under Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1961 et seq. United States v Genova
(2003, CA7 Ill) 333 F3d 750, reh den (2003, CA7 Ill) 2003 US App LEXIS 16935.
Indictment properly alleges 19 separate predicate acts of racketeering against judge under 18 USCS § 1962(c)
where complaint alleges (1) one predicate act consisting of instructing attorney to lie to law enforcement officials about
bribery scheme and (2) 18 other specific acts of bribery and official misconduct that track language of applicable state
statutes; additional act is improperly alleged and thus dismissed where act is "catchall" offense spanning 3 years and
multiple acts of bribery by unnamed attorney on unnamed cases. United States v McDonnell (1988, ND Ill) 696 F Supp
356.
Partner's complaint alleges no predicate act of bribery sufficient to support his RICO claims against other partners,
where there is not one single factual allegation of specific bribe paid to any insurance agent at any time, because mere
vague, general, and conclusory allegations of scheme with insurers to divert claims payment checks is insufficient to
plead offense falling under 18 USCS § 1961(1)(A). Zigman v Giacobbe (1996, ED NY) 944 F Supp 147, RICO Bus Disp
Guide (CCH) P 9186.
97. Conspiracy
Under Racketeer Influenced and Corrupt Organizations Act (RICO) (18 USCS §§ 1961 et seq.)--which (1) makes it
unlawful to engage in certain activities through pattern of racketeering (18 USCS §§ 1962(a)-(c)), (2) makes it unlawful
for person to conspire to violate any of provisions of §§ 1962(a)-(c) (18 USCS § 1962(d)), (3) states that cause of action
is available to anyone injured by reason of violation of § 1962 (18 USCS § 1964(c)), and (4) contains exhaustive list of
acts of "racketeering" (18 USCS § 1961(1))--a person injured by overt act done in furtherance of RICO conspiracy does
not have cause of action under § 1964(c) where overt act is not act of racketeering or otherwise unlawful under statute,
as (1) obvious source in common law for combined meaning of §§ 1964(c) and 1962(d) is law of civil conspiracy; (2)
principle that plaintiff could bring suit for civil conspiracy only if he or she had been injured by act that was itself tortious was so widely accepted at time of RICO's enactment in 1970 as to be incorporated in common understanding of
"civil conspiracy"; (3) when Congress established civil cause of action in RICO for person injured by reason of conspiracy, Congress meant to adopt these well-established common-law civil conspiracy principles; (4) consistency with
common law requires that RICO conspiracy plaintiff allege injury from act that is analogous to act of tortious character;
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and (5) this interpretation of § 1962(d) does not render provision meaningless or superfluous because, under such interpretation, plaintiff could, through § 1964(c) suit for violation of § 1962(d), sue coconspirators who might not themselves have violated one of substantive provisions of § 1962. Beck v Prupis (2000) 529 US 494, 146 L Ed 2d 561, 120 S
Ct 1608, 2000 CDOS 3177, 2000 Daily Journal DAR 4285, 16 BNA IER Cas 271, RICO Bus Disp Guide (CCH) P
9869, 2000 Colo J C A R 2188, 13 FLW Fed S 261.
Under Racketeer Influenced and Corrupt Organizations Act (RICO) (18 USCS §§ 1961 et seq.)--which (1) makes it
unlawful to engage in certain activities through pattern of racketeering (18 USCS §§ 1962(a)-(c)), (2) makes it unlawful
for person to conspire to violate any of provisions of §§ 1962(a)-(c) (18 USCS § 1962(d)), (3) states that cause of action
is available to anyone injured by reason of violation of § 1962 (18 USCS § 1964(c)), and (4) contains exhaustive list of
acts of "racketeering," (18 USCS § 1961(1))--a scheme allegedly orchestrated by former officers and directors of corporation to remove individual from company, after individual allegedly discovered that former officers and directors conspired to engage in acts of racketeering and did engage in such acts, is not independently wrongful under any substantive provision of RICO; therefore, injury caused by such act is not sufficient to give rise to cause of action under §
1964(c). Beck v Prupis (2000) 529 US 494, 146 L Ed 2d 561, 120 S Ct 1608, 2000 CDOS 3177, 2000 Daily Journal
DAR 4285, 16 BNA IER Cas 271, RICO Bus Disp Guide (CCH) P 9869, 2000 Colo J C A R 2188, 13 FLW Fed S 261.
Series of conspiracies and failed attempts constitute pattern of racketeering activity within meaning of 18 USCS §
1961 even if no racketeering offense is completed. United States v Brooklier (1982, CA9 Cal) 685 F2d 1208, 11 Fed
Rules Evid Serv 703, cert den (1983) 459 US 1206, 75 L Ed 2d 439, 103 S Ct 1194, 103 S Ct 1195.
Conspiracy to violate state law constitutes act of racketeering; racketeering activity includes conspiracy to commit
murder in violation of state law; gambling conspiracy cannot serve as act of "racketeering activity" where substantive
offense is not indictable under 18 USCS § 1955. United States v Ruggiero (1984, CA2 NY) 726 F2d 913, 14 Fed Rules
Evid Serv 1484, cert den (1984) 469 US 831, 83 L Ed 2d 60, 105 S Ct 118 and (criticized in United States v Marmolejo
(1996, CA5 Tex) 86 F3d 404) and (criticized in Salinas v United States (1997) 522 US 52, 139 L Ed 2d 352, 118 S Ct
469, 97 CDOS 8996, 97 Daily Journal DAR 14512, RICO Bus Disp Guide (CCH) P 9382, 1997 Colo J C A R 3054,
1997 Colo J C A R 3209, 11 FLW Fed S 251).
Conspiracy to gamble falls within 18 USCS § 1961's definition of racketeering activity, and can serve as predicate
act within § 1961 to support conspiracy conviction pursuant to 18 USCS § 1962. United States v Joseph (1986, CA6
Mich) 781 F2d 549.
Conspiracy to commit racketeering offense listed in 18 USCS § 1961(1)(A) may serve as predicate act required to
establish violation of 18 USCS § 1962(c). United States v Manzella (1986, CA5 La) 782 F2d 533, 20 Fed Rules Evid
Serv 196, cert den (1986) 476 US 1123, 90 L Ed 2d 672, 106 S Ct 1991 and reh den, clarified (1986, CA5 La) 790 F2d
1260 and cert den (1986) 479 US 961, 93 L Ed 2d 403, 107 S Ct 457.
Conspiracies to violate narcotics laws, if proven, are properly chargeable as predicate acts of racketeering to satisfy
RICO "pattern" requirement. United States v Benevento (1987, CA2 NY) 836 F2d 60, cert den (1988) 486 US 1043,
100 L Ed 2d 620, 108 S Ct 2035, post-conviction relief den (2000, SD NY) 81 F Supp 2d 490 and (ovrld in part by
United States v Indelicato (1989, CA2) 865 F2d 1370) and subsequent app (1992, CA2 NY) 963 F2d 1522 and (criticized in United States v Jelinek (1995, CA8 Iowa) 57 F3d 655).
Conspiracy to possess and distribute controlled substances can constitute predicate offense for purposes of establishing pattern of racketeering activity under RICO, since 18 USCS § 1961(1)(D) specifically provides that predicate
acts may include any offense "involving . . . buying, selling or otherwise dealing in narcotic or other dangerous drugs,
punishable under any law of the United States." United States v Echeverri (1988, CA3 NJ) 854 F2d 638, 26 Fed Rules
Evid Serv 692 (criticized in United States v Kramer (1992, CA7 Ill) 955 F2d 479, 34 Fed Rules Evid Serv 1365) and
(criticized in United States v Edmonds (1995, CA3 Pa) 52 F3d 1236) and (criticized in United States v Richardson
(1997, CA7 Ill) 130 F3d 765, 48 Fed Rules Evid Serv 254).
Evidence was sufficient to support inference that defendants acted in concert pursuant to mutual agreement where
tape recordings of conversations among defendants supported inference that they were acting together pursuant to conspiratorial agreement; government is not required to present evidence of formal agreement. United States v Ford
(1994, CA7 Ill) 21 F3d 759.
Although establishing that defendant merely associated with conspirators is insufficient to prove membership in
conspiracy, defendant's repeated and requested presence at meetings in which details of conspiracy were discussed confirms that he knew of conspiracy and joined it. United States v Salvatore (1997, CA5 La) 110 F3d 1131, 46 Fed Rules
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Evid Serv 1407, reh, en banc, den (1997, CA5 La) 117 F3d 1419 and cert den (1997) 522 US 981, 139 L Ed 2d 378, 118
S Ct 441 and (ovrld in part on other grounds by Cleveland v United States (2000) 531 US 12, 148 L Ed 2d 221, 121 S Ct
365, 2000 CDOS 8942, 2000 Daily Journal DAR 11849, RICO Bus Disp Guide (CCH) P 9970, 2000 Colo J C A R
6139, 14 FLW Fed S 3).
District court erred in sentencing defendant based on single "underlying racketeering offense" when jury had to
have found that defendant agreed to commit at least two predicate acts under Racketeer Influenced and Corrupt Organizations Act, and case was remanded for resentencing. United States v Corrado (2002, CA6 Mich) 304 F3d 593, 2002
FED App 309P, reh, en banc, den (2002, CA6) 2002 US App LEXIS 23969 and cert den (2003) 537 US 1238, 155 L Ed
2d 207, 123 S Ct 1366.
Conspiracy can properly be charged as predicate act of racketeering under 18 USCS § 1962. United States v Napolitano (1982, SD NY) 564 F Supp 951.
Indictment is sufficient that alleges that conspiracies can be charged as racketeering acts in RICO conspiracy and
are proper predicates under RICO statute, regardless of organized crime family members' argument that Hobbs Act
conspiracies to obstruct commerce by robbery or extortion cannot be charged as racketeering acts in RICO conspiracy
indictment, because Hobbs Act conspiracy predicate falls under 18 USCS § 1961(1)(B), which defines racketeering activity to include "any act which is indictable under 18 USCS § 1951." United States v Santoro (1986, ED NY) 647 F
Supp 153, revd on other grounds, remanded sub nom United States v Davidoff (1988, CA2 NY) 845 F2d 1151 and affd
without op (1989, CA2 NY) 880 F2d 1319.
Defendants' motion to dismiss RICO conspiracy count because it includes conspiratorial acts as predicate offenses
is denied without prejudice to renewal at close of government's case, where such pleading is allowed by plain language
of 18 USCS § 1961(1), but Third Circuit interpretation of § 1962(d) liability requires that government show all RICO
enterprise defendants to have nexus which signals existence of truly unified agreement. United States v Vastola (1987,
DC NJ) 670 F Supp 1244, affd in part and revd in part on other grounds (1990, CA3 NJ) 899 F2d 211, 29 Fed Rules
Evid Serv 1366, vacated, remanded (1990) 497 US 1001, 111 L Ed 2d 744, 110 S Ct 3233, on remand, remanded (1990,
CA3 NJ) 915 F2d 865, cert den (1991) 498 US 1120, 112 L Ed 2d 1178, 111 S Ct 1073.
Independent contractor's civil RICO claim against large corporation must fail, even though he alleges corporation's
employees conspired to utilize his expertise for their own business advantage, then let him go and made disparaging
statements about him and his wife leading to demise of their marriage and his business, because none of his allegations
is sufficient to constitute racketeering activity within meaning of 18 USCS § 1961(1). Toms v Pizzo (1998, WD NY) 4 F
Supp 2d 178, affd without op (1999, CA2 NY) 172 F3d 38, reported in full (1999, CA2 NY) 1999 US App LEXIS 1403.
Sixteen defendants facing serious charges under Racketeer Influenced and Corrupt Organizations Act, 18 USCS §
1961 et seq., including conspiracy to distribute controlled substances and first degree felony murder, were restrained
with stun belts during their capital trial, and court determined that restraint was necessary to preserve safety of victims
and their families in courtroom. United States v Gray (2002, DC Dist Col) 254 F Supp 2d 1 (criticized in Hill v Cambra
(2005, ND Cal) 2005 US Dist LEXIS 4145).
Where alleged Organized Crime Control Act of 1970, Racketeer Influenced and Corrupt Organizations (RICO), 18
USCS §§ 1961 et seq., activities engaged in by bank, which consisted of bank closing plaintiff's checking account at
plaintiff's request and failing to give information to check-clearing company upon plaintiff's request, were routine bank
activities and merely demonstrated that bank was acting like bank, plaintiff's RICO claims against bank were dismissed
for failure to state claim. Pennino v Selig (2003, WD Ark) 258 F Supp 2d 914.
Plaintiff's construed motion to amend plaintiff's Organized Crime Control Act of 1970, Racketeer Influenced and
Corrupt Organizations (RICO), 18 USCS §§ 1961 et seq., complaint was denied, since if allowed to amend complaint,
plaintiff would have included allegations that bank's refusal to give notice of plaintiff's account closure directly to local
check-clearing company caused check-clearing company to falsely report that plaintiff's account remained open and in
good standing, and that bank employee had overheard bank officer comment on plaintiff's problem; these additional
facts would not have caused court to alter its opinion that plaintiff did not have RICO claim of any sort against bank,
and therefore amendment would have been futile. Pennino v Selig (2003, WD Ark) 258 F Supp 2d 914.
Individuals' motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(2), (6), action for alleged violations of Racketeering Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1962(c), was denied because investors' complaint
sufficiently alleged pattern or racketeering activity involving predicate acts of money laundering to maintain 18 USCS §
1962(c) action; further, case warranted discovery and subsequent leave to amend with respect to mail and wire fraud
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allegations that failed to meet specificity requirements of Fed. R. Civ. P. 9(b) despite fact that investors' 18 USCS §
1962(c) claim could not have been premised on alleged predicate acts of securities fraud under 18 USCS § 1964(c),
since complaint did not allege that either individual had ever been convicted of securities fraud, or on conspiracy since
conspiracy did not constitute racketeering activity as defined by 18 USCS § 1961(1). Uviles v RYS Int'l Corp. (2006, DC
Puerto Rico) 443 F Supp 2d 233.
98. Contract fraud
Competitor of defendant partnership in civil RICO action was not victim for purposes of determining whether
partnership defrauded 2 victims and thereby engaged in pattern of racketeering activity, even though competitor was
injured when partnership paid another defendant for participating in fraudulent scheme by setting him up in business,
thereby circumventing noncompetition agreement between partnership and competitor, where circumventing agreement
was not alleged predicate act under RICO. Liquid Air Corp. v Rogers (1987, CA7 Ill) 834 F2d 1297, 24 Fed Rules
Evid Serv 254, cert den (1989) 492 US 917, 106 L Ed 2d 588, 109 S Ct 3241 and (ovrld in part as stated in CIB Bank v
Esmail (2004, ND Ill) 2004 US Dist LEXIS 26817) and (ovrld as stated in Equity Residential v Kendall Risk Mgmt.
(2005, ND Ill) 2005 US Dist LEXIS 8273).
Congress intended federal penalties under RICO (18 USCS §§ 1961 et seq.) to combat extended, widespread, or
particularly dangerous pattern of racketeering, and heightened RICO civil and criminal penalties are reserved for
schemes whose scope and persistence set them above routine; thus, ordinary business contract or fraud disputes will not
lightly be transformed into federal RICO claims. Flip Mortgage Corp. v McElhone (1988, CA4 Va) 841 F2d 531.
Mobile home park lease stating it is "subject" to state law does not misrepresent itself as being in "conformity" to
state law, and letter accompanying lease promising that park will pay for installation of individual gas and water meters
while requiring residents to pay for capital improvement is not misrepresentation where it was not shown that meters
were capital improvements; hence, lease and letter did not constitute RICO predicate acts of mail fraud. Rothman v
Vedder Park Management (1990, CA9 Cal) 912 F2d 315.
Pattern of racketeering activity is not properly alleged under 18 USCS § 1961(1), because claim appears to be one
of ordinary common law contract fraud. Fleet Credit Corp. v Sion (1988, DC RI) 699 F Supp 368, revd on other
grounds, remanded (1990, CA1 RI) 893 F2d 441.
Civil racketeering claim is stated under 18 USCS § 1961(1), where complaint alleges that officers of corporate
condominium owners converted approximately 60 purchase payments on condominiums to other projects instead of
making payments on loans to build condominiums as agreed and additional condominiums remained to be sold, because
additional conversions were likely on unsold units and thus "continuity" component of "racketeering" requirement is
present. Norstar Bank v Pepitone (1990, ED NY) 742 F Supp 1209.
99. Counterfeiting
Prior conviction for counterfeiting may constitute one of requisite 2 predicate offenses for RICO (18 USCS §§ 1961
et seq.), since, in subsequent trial for RICO, government may count, as predicate offense, defendant's prior conviction
for offense falling within definition of "racketeering activity." United States v Erwin (1986, CA5 Tex) 793 F2d 656, cert
den (1986) 479 US 991, 93 L Ed 2d 590, 107 S Ct 589 and subsequent app (2001, CA5 Tex) 277 F3d 727, reh den, reh,
en banc, den (2002, CA5 Tex) 45 Fed Appx 324 and magistrate's recommendation, post-conviction proceeding (2002,
ND Tex) 2002 US Dist LEXIS 18707 and cert den (2002) 537 US 989, 154 L Ed 2d 358, 123 S Ct 433.
Substantive RICO convictions may stand notwithstanding that kidnapping counts involving defendant are no longer
valid predicate acts under state law where jury found numerous other legally sufficient predicate acts to establish pattern
and where kidnapping did not dominate prosecution. United States v Dhinsa (2001, CA2 NY) 243 F3d 635, 55 Fed
Rules Evid Serv 1193, cert den (2001) 534 US 897, 151 L Ed 2d 156, 122 S Ct 219.
100. Drugs and narcotics
Possessing and importing marijuana are 2 separate crimes and 2 separate acts for RICO purposes. United States v
Bascaro (1984, CA11 Fla) 742 F2d 1335, reh den, en banc (1984, CA11 Fla) 749 F2d 733 and cert den (1985) 472 US
1017, 87 L Ed 2d 613, 105 S Ct 3476, 105 S Ct 3477 and cert den (1985) 472 US 1021, 87 L Ed 2d 622, 105 S Ct 3488.
Act of dealing in marijuana may be predicate act of racketeering activity. United States v Tillett (1985, CA4 Va)
763 F2d 628.
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Marijuana trafficking is a predicate act of racketeering activity under RICO statute. United States v Ryland (1986,
CA9 Ariz) 806 F2d 941, cert den (1987) 481 US 1057, 95 L Ed 2d 854, 107 S Ct 2199.
Evidence showing three separate illicit drug schemes, involving different drugs, different supplier, different country, and different United States base of operations, was sufficient to establish RICO pattern of racketeering activity.
United States v Kragness (1987, CA8 Minn) 830 F2d 842, 23 Fed Rules Evid Serv 1151 (criticized in United States v
Baker (1995, CA9 Mont) 63 F3d 1478, 95 CDOS 7886, 95 Daily Journal DAR 13531).
Violations of federal marijuana statutes are within definition of racketeering activity. United States v Castellano
(1985, SD NY) 610 F Supp 1359.
101. Extortion
Each payment is separate act of racketeering within meaning of 18 USCS § 1961 where each payment results from
appellant's initial threats in ongoing extortion scheme. United States v Brooklier (1982, CA9 Cal) 685 F2d 1208, 11
Fed Rules Evid Serv 703, cert den (1983) 459 US 1206, 75 L Ed 2d 439, 103 S Ct 1194, 103 S Ct 1195.
Civil violation of RICO Act is stated by claim of extortion under state law resulting from condominium unit owner's threats to exact money or cause economic harm to condominium developer stemming from nonperformance of
commercial arrangement. Battlefield Builders, Inc. v Swango (1984, CA4 Va) 743 F2d 1060.
Plaintiff failed to prove "collection of unlawful debt" prong of RICO claim where he proved, at most, single, isolated transaction without financial gain; scope of RICO does not extend to occasional usurious transactions by person
not in business of loan sharking. Wright v Sheppard (1990, CA11 Fla) 919 F2d 665.
Complaint, by plaintiff seeking finder-fee commissions from American Indian foundation for 2 properties transferred to foundation, did not state RICO cause of action where plaintiff did not allege threat of continuity or relationship
among predicate acts of same or similar purposes. Anderson v Foundation for Advancement, Educ. & Empl. of Am. Indians (1998, CA4 Va) 155 F3d 500, RICO Bus Disp Guide (CCH) P 9564, 41 FR Serv 3d 981.
Defendant's conviction for one underlying extortion charge on RICO prosecution was vacated where evidence was
insufficient regarding defendant's involvement in extortion of money from victim, whether his supposed extortion was
by threatening victim with physical violence, economic harm, or knowingly exploiting fear that he knew victim harbored. United States v Merlino (2003, CA3 Pa) 349 F3d 144, cert den (2004) 541 US 965, 158 L Ed 2d 409, 124 S Ct
1726.
Direct threats to property or employees of bus company alleged to violate state laws punishing extortion, including
threats against property and threats of bodily harm, qualify as offenses listed in definition of racketeering activity under
18 USCS § 1961(1). Yellow Bus Lines v Drivers, Chauffeurs & Helpers Local Union 639 (1988, App DC) 268 US App
DC 103, 839 F2d 782, 127 BNA LRRM 2607, 108 CCH LC P 10311, 10 FR Serv 3d 423, reh den, en banc (1988, App
DC) 108 CCH LC P 10439 and cert den (1988) 488 US 926, 102 L Ed 2d 328, 109 S Ct 309, 129 BNA LRRM 2672, 110
CCH LC P 10836 and vacated, remanded (1989) 492 US 914, 106 L Ed 2d 583, 109 S Ct 3235, 131 BNA LRRM 3072,
132 BNA LRRM 2160, 112 CCH LC P 11265.
Demand for 10-percent interest in newspaper by attorney representing bank that called in newspaper's loan as retribution for newspaper's failure to cede control to bank loan officer and another person is violation of RICO Act and
illegal interference with commerce by violence or threats, regardless of fact that demand was later reduced to only 5
percent interest. Joseph v Algemene Bank Nederland, N.V. (1984, WD Pa) 592 F Supp 141.
Extortion allegation alleging threat communicated through conduct can be considered as predicate act for civil
RICO claim where under state law threat can be as effectively communicated through conduct as by language. Tryco
Trucking Co. v Belk Store Services, Inc. (1985, WD NC) 608 F Supp 812.
Debtors failed to prove predicate acts of fraud and extortion in action against bank where debtors alleged bank
misrepresented prime rate and extorted new letter of credit agreement, because bank never made affirmative representation about its prime rate and had no duty to do so, and bank did not pressure or threaten to induce economic loss if
debtors did not sign new agreement. Pappas v NCNB Nat'l Bank (1987, MD NC) 653 F Supp 699.
Closely held family corporation and shareholders' RICO claims against bank are dismissed, where restructuring of
bank loan does not constitute "racketeering activity" under West Virginia law despite allegations of extortion and mail
fraud, because there were no threats of injury or benefit extorted, and no scheme to defraud since bank credited corpora-
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tion's account with money previously embezzled by bank officer. Iden v Adrian Buckhannon Bank (1987, ND W Va)
661 F Supp 234, affd in part without op and vacated in part without op (1988, CA4 W Va) 841 F2d 1122.
RICO plaintiff's extortion allegations are infirm, where claimed threats were made in letters from cocounsel stating
that he is holding disputed fees in separate account, that he is available to discuss division of fees, and that his position
is that fees should be split equitably and in accordance with state supreme court rules, because such letters could not
have reasonably put plaintiff in fear so as to amount to predicate act of extortion under 18 USCS §§ 1951 and 1961.
Sutherland v O'Malley (1988, ND Ill) 687 F Supp 392, affd (1989, CA7 Ill) 882 F2d 1196, reh den (1989, CA7) 1989
US App LEXIS 13761.
Former deputy sheriff's RICO claims against prosecutors and other government officials are dismissed where deputy alleged officials demanded he raise money for political party, because demand to raise money, "macing" under state
law, is not racketeering activity. Rose v Bartle (1988, ED Pa) 692 F Supp 521, affd in part and revd in part on other
grounds, vacated, in part on other grounds, remanded (1989, CA3 Pa) 871 F2d 331, 13 FR Serv 3d 430 (criticized in
Goren v New Vision Int'l (1998, CA7 Ill) 156 F3d 721, RICO Bus Disp Guide (CCH) P 9555) and (criticized in Montgomery v De Simone (1998, CA3 NJ) 159 F3d 120) and (criticized in Northern Ind. Gun & Outdoor Shows v City of S.
Bend (1998, CA7 Ind) 163 F3d 449).
Predicate acts of racketeering are alleged under 18 USCS § 1961(1), where complaint alleges landlord caused tenants to be billed for amounts not owed and then attempted to coerce payment or lease extensions on terms more favorable to landlord through vandalism, interference with tenants' ingress and egress, and threats to retaliate, because actions
can be viewed as extortionate. Jordan v Berman (1991, ED Pa) 758 F Supp 269.
Defendant's motion to dismiss or strike RICO charge was denied when there was no basis for dismissing money
laundering or extortion charges against defendant, and these readily sufficed as RICO predicate acts. United States v
Warner (2003, ND Ill) 292 F Supp 2d 1051.
Where property owner alleged that city officials engaged in common scheme to force owners to sell their property,
which would be acquired for development, property owner sufficiently alleged factual basis for predicate acts of extortion under Hobbs Act, 18 USCS § 1951, based on alleged attempts to extort property; defendants' argument that fraud
and conspiracy allegations were not pleaded with sufficient particularity was rejected because property owner did not
allege conspiracy and alleged predicate acts involved extortion, not fraud; however, claim was dismissed for failure to
allege pattern of racketeering activity. Ferluga v Eickhoff (2006, DC Kan) 408 F Supp 2d 1153.
102. Fiduciary duty breach
Real estate developer could not base RICO claim against lender and its officers on single, noncriminal breach of
fiduciary duty, for under no circumstance could breach of fiduciary duty constitute pattern of racketeering activity. La
Vay Corp. v Dominion Federal Sav. & Loan Asso. (1987, CA4 Va) 830 F2d 522, 9 FR Serv 3d 597, cert den (1988) 484
US 1065, 98 L Ed 2d 991, 108 S Ct 1027.
Shareholder failed to establish predicate RICO violation of state law where warrants of stock purchase options to
corporate officers, as contained in proxy statement, provided incentive for continued service and thereby helped guarantee high level of service; there was no fraud in issuance of warrants and court will hold that Directors' business judgment is conclusive that valid consideration was received for warrants where stock rose in value from less than zero to
over $ 30 during officers' tenure. Pinnacle Consultants v Leucadia Nat'l Corp. (1996, CA2 NY) 101 F3d 900, RICO Bus
Disp Guide (CCH) P 9184.
103. Labor and employment
Wrongful termination of employee for refusing to participate in employer's cover-up of illegal bribes to obtain foreign contracts is not predicate act as defined by 18 USCS § 1961 and therefore does not give employee standing because
act was not essential to RICO conspiracy. Reddy v Litton Indus. (1990, CA9 Cal) 912 F2d 291, 116 CCH LC P 10270,
cert den (1991) 502 US 921, 116 L Ed 2d 272, 112 S Ct 332, 91 Daily Journal DAR 12655; Kramer v Bachan Aerospace Corp. (1990, CA6 Mich) 912 F2d 151, 116 CCH LC P 10259.
Union official's multiple convictions for receipt of unlawful labor payments were sufficient to serve as predicate
acts required to prove pattern of racketeering activity under 18 USCS § 1962(c); therefore, reversal of official's mail
fraud conviction had no effect on conspiracy and substantive convictions under RICO. United States v Novak (2006,
CA2 NY) 443 F3d 150, 152 CCH LC P10640.
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18 USCS § 1961
"Racketeering activity" is statutory term which specifically incorporates any acts indictable under number of specified previously existing statutes, including 29 USCS § 186, and fact that labor "racketeering activity" did not come into
existence until passage of Organized Crime Control Act of 1970 (18 USCS §§ 1961 et seq.) does not render statutes
ambiguous, because express provision in 18 USCS § 1961(5) that at least one of acts of racketeering activity must take
place after effective date of statute would be meaningless unless Congress intended that predicate act could be one
which occurred earlier, and this section renders clear purported ambiguity, since on its face Act makes plain what is
confirmed by legislative history that Congress intended Act to apply to offenses made up in part of violations of other
statutes occurring prior to October 15, 1970 and subsequently labeled "racketeering activity;" "racketeering activity"
includes illegal payments and loans to labor organizations or their employees indictable under 29 USCS § 186; "pattern
of racketeering activity" requires at least two acts of racketeering activity within 10 years of each other, one of which
must have occurred after effective date of 18 USCS § 1961. United States v Field (1977, SD NY) 432 F Supp 55, affd
without op (1978, CA2 NY) 578 F2d 1371, cert dismd (1978) 439 US 801, 58 L Ed 2d 94, 99 S Ct 43.
Mass picketing interfering with free movement about job site, accompanied by some harsh words and minor mischief, is neither Hobbs Act nor RICO violation. WSB Electric Co. v Rank & File Committee to Stop 2-Gate System
(1984, ND Cal) 103 FRD 417, 117 BNA LRRM 2994, 40 FR Serv 2d 568.
Summary judgment is denied in RICO claim by publisher against competitor for making payoffs to third-party union stewards to cause union vendors to advance competitor's product where predicate acts are included within violation
of 29 USCS § 186(a)(4) and where competitor contended prohibition extended only to payoffs of its own employees
because subsection simply does not contain any such limitation. Wabash Pub. Co. v Dermer (1986, ND Ill) 650 F Supp
212.
State employee fails to state civil racketeering claim under 18 USCS § 1961(1), where complaint alleges sexual
harassment by her supervisor and attempts by state officials to impede state investigation of her charges, because alleged conduct is not racketeering activity. McKinney v Illinois (1989, ND Ill) 720 F Supp 706, 50 BNA FEP Cas 1625.
Employee's allegations that employer's chief executive officer and other defendants failed to give him commissions
due under his contract and refused to issue stock as part of his compensation did not state claim under 18 USCS § 1961,
since such conduct did not constitute predicate acts under statute. Williams v Waldron (1998, ND Ga) 14 F Supp 2d
1334, affd without op (2001, CA11 Ga) 248 F3d 1180.
Employee's claims that employer's use of illegal immigrants violated Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1961 et seq., were preempted by National Labor Relations Act where alleged injury was depressed wages, employees were employed under terms of union's collective bargaining agreement, and only allegation
that could have showed that employees suffered depressed wages was allegation that employer had not bargained in
good faith pursuant to 29 USCS § 158(d) since there was no allegation or evidence that employer had not paid wages
agreed to in collective bargaining agreement. Baker v IBP, Inc. (2002, CD Ill) 171 BNA LRRM 2355, mod, affd (2004,
CA7 Ill) 357 F3d 685, 174 BNA LRRM 2230, 149 CCH LC P 34813, reh den, reh, en banc, den (2004, CA7 Ill) 2004
US App LEXIS 8689 and cert den (2004, US) 160 L Ed 2d 318, 125 S Ct 412, 175 BNA LRRM 3248 and (criticized in
Williams v Mohawk Indus. (2005, CA11 Ga) 2005 US App LEXIS 10710).
Where defendants allegedly implemented scheme whereby they paid undocumented workers with money skimmed
from sales at companies that they channeled into shell companies, their motions for acquittal on money laundering
count were granted because defendants did not obtain "proceeds" in violation of money laundering statute; term "proceeds" did not contemplate profits or revenue indirectly derived from labor or from failure to remit taxes. United States
v Maali (2005, MD Fla) 358 F Supp 2d 1154, 18 FLW Fed D 349.
104.--Employee's civil RICO claim
Where plaintiff hourly employees alleged that defendant employer and third-party recruiters violated 8 USCS §
1324(a)(1)(A)(iii), (iv), (3)(A), destroyed documents, and harbored illegal aliens hundreds of times to depress wages
and reduce worker's compensation claims, pattern of racketeering activity, enterprise, and employer's engagement in its
operation was sufficiently alleged under 18 USCS §§ 1961(1)(F), 1962(c). Williams v Mohawk Indus. (2005, CA11 Ga)
411 F3d 1252, 177 BNA LRRM 2550, 18 FLW Fed C 643.
Former employee's RICO claim is dismissed where complaint alleged employer harassed and abused employee for
refusal to participate in scheme to defraud employer's customers and caused such emotional distress as to render employee unable to perform gainful employment, because abuse and harassment do not constitute racketeering activity
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18 USCS § 1961
under 18 USCS § 1961(1) and RICO precludes recovery for personal injuries. Kouvakas v Inland Steel Co. (1986, ND
Ind) 646 F Supp 474.
Discharged employee's RICO action fails to allege at least 2 predicate acts of racketeering activity under 18 USCS
§ 1961 where (1) mail or wire communications were not used "in furtherance" of alleged scheme as letter which provided formal notice of discharge and telephone call providing reason for terminating employee could not have facilitated scheme since goal of alleged scheme had already been accomplished when employee had been terminated 6 days
earlier, and (2) employee's complaint failed to allege that false representation or material nondisclosure was reasonably
calculated to deceive him. Penry v Hartford Fire Ins. Co. (1987, ED Tex) 662 F Supp 792, 111 CCH LC P 10992.
State employee fails to state civil racketeering claim under 18 USCS § 1961(1), where complaint alleges sexual
harassment by her supervisor and attempts by state officials to impede state investigation of her charges, because alleged conduct is not racketeering activity. McKinney v Illinois (1989, ND Ill) 720 F Supp 706, 50 BNA FEP Cas 1625.
Termination of employment is not act of racketeering under Racketeer Influenced and Corrupt Organizations Act
(RICO), 18 USCS §§ 1961-1964, so former employee of Federal Home Loan Bank of Topeka (FHLB) lacked standing
to sue for wrongful termination under RICO; employee's allegation of damage to her reputation in process of termination of her employment also failed to confer standing under RICO because although she generally alleged that FHLB
tempered her professional reputation and caused damages to it in terminating her employment, she did not suggest that
this alleged reputational damage constituted "concrete and particularized" injury to legal interest protected by RICO.
Xiangyuan Zhu v Fed. Hous. Fin. Bd. (2005, DC Kan) 389 F Supp 2d 1253.
Unpublished Opinions
Unpublished: Dismissal of private enforcement action for violation of Racketeer Influenced and Corrupt Organizations (RICO) Act, 18 USCS §§ 1961 et seq., was proper because plaintiffs had not pled claim with degree of particularity required by Fed. R. Civ. P. 9(b). Mostowfi v 12 Telecom Int'l, Inc. (2008, CA9 Cal) 2008 US App LEXIS 5380.
105. Litigation threat
Threat by shipowners to bring civil action for alleged purpose of frightening parent corporation into paying or
guaranteeing debts in order to avoid disruption of relationship with bank does not constitute infliction of "fear"; single
threat to file civil action and one instance of travel does not constitute "pattern of racketeering activity." I.S. Joseph Co.
v J. Lauritzen A/S (1984, CA8 Minn) 751 F2d 265.
Actual filing of lawsuits under Freedom of Access to Clinic Entrances Act, 18 USCS § 248, preventing obstruction
of abortion clinics was not predicate offense giving rise to Racketeer Influenced and Corrupt Organizations Act, 18
USCS §§ 1961 et seq. violations, even after lawsuits were withdrawn. Raney v Allstate Ins. Co. (2004, CA11 Fla) 370
F3d 1086, 17 FLW Fed C 571.
In plaintiff's action alleging that police officers and others were liable under civil provisions of Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS §§ 1961-1968, because they fabricated evidence against him to
obtain false conviction, plaintiff had standing to bring action because (1) he sufficiently alleged injury to "business or
property" within meaning of 18 USCS § 1964(c) where harms that he alleged--intentional interference with contract and
interference with prospective business relations--were established torts under state law and where his claimed financial
loss was that he could not fulfill his employment contract or pursue employment opportunities while he was unjustly
incarcerated; and (2) plaintiff properly alleged that his injuries were "by reason of violation of 18 USCS § 1962" because his complaint tracked language of 18 USCS § 1962, he alleged that police department and various subdivisions
were "enterprises" within meaning of 18 USCS § 1961(4), and he alleged acts that seemed to fall within definition of
"racketeering activity," pursuant to § 1961(1), and seem to form "pattern," pursuant to § 1961(5). Diaz v Gates (2005,
CA9 Cal) 420 F3d 897.
Action claiming that satellite television provider violated RICO by mailing demand letters that accused plaintiffs of
illegally accessing provider's satellite television signal was dismissed because RICO and predicate statutes at issue did
not permit maintenance of lawsuit for sending of prelitigation demand to settle legal claims that did not amount to sham.
Sosa v DIRECTV, Inc. (2006, CA9 Cal) 437 F3d 923.
Neither threat of litigation nor use of mails in ordinary course of business are criminal acts which would constitute
predicate acts for RICO purposes. American Nursing Care, Inc. v Leisure (1984, ND Ohio) 609 F Supp 419, CCH Fed
Secur L Rep P 91978.
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106. Mail or wire fraud, generally
Mail fraud under 18 USCS § 1341 is predicate offense under provisions of Racketeer Influenced and Corrupt Organizations Act (18 USCS § 1961(1) and federal money laundering statute (18 USCS § 1956(c)(7)(A)). Cleveland v
United States (2000) 531 US 12, 148 L Ed 2d 221, 121 S Ct 365, 2000 CDOS 8942, 2000 Daily Journal DAR 11849,
RICO Bus Disp Guide (CCH) P 9970, 2000 Colo J C A R 6139, 14 FLW Fed S 3.
Under 18 USCS § 1961(1)(B), racketeering activity is any act indictable under mail fraud statute; "scheme to defraud" is not "act" indictable under mail fraud statute, for though offense of mail fraud has genesis in scheme to defraud,
very gist of crime is use of mails in executing scheme; for this reason each mailing in furtherance of scheme to defraud
is separate offense under mail fraud statute even if there is but one scheme involved; defendant, therefore, has engaged
in five acts of "racketeering activity" as defined in 18 USCS § 1961(1)(B) because defendant committed five separate
acts of mail fraud. United States v Weatherspoon (1978, CA7 Ill) 581 F2d 595 (criticized in Truck Ins. Exch. v Kafka
(1995, ND Ill) RICO Bus Disp Guide (CCH) P 8873).
Telephone call and act of wiring money are 2 separate activities which constitute pattern of racketeering activity as
defined in 18 USCS § 1961 where such is part of ongoing scheme to defraud and extract further cash from person.
United States v Morelli (1981, CA6 Mich) 643 F2d 402, cert den (1981) 453 US 912, 69 L Ed 2d 994, 101 S Ct 3143.
"Racketeering activity" is stated at 18 USCS 1961(1)(B) to specifically encompass any act which is indictable under
18 USCS 1341, relating to mail fraud, and thus where evidence was sufficient to convict defendants on four separate
counts of mail fraud, it is obvious that defendants committed series of acts indictable under 18 USCS § 1341 and participated in pattern of racketeering activity. United States v Garver (1987, CA7 Ind) 809 F2d 1291, 22 Fed Rules Evid
Serv 464.
Government may show that two predicate acts constitute pattern of racketeering activity under 18 USCS § 1962(c)
although they are pleaded in only one count, but two acts of racketeering activity were not shown by allegations that
two phone calls made on same day constituted two violations of statute prohibiting use of communication facility in
furtherance of felony, since defendant neither placed nor answered second phone call, but was merely mentioned during
phone conversation. United States v Jennings (1988, CA6 Ohio) 842 F2d 159.
Fraudulent intent is necessary element to establishing mail or wire fraud as predicate acts of civil RICO action.
Blu-J, Inc. v Kemper C.P.A. Group (1990, CA11 Fla) 916 F2d 637, 31 Fed Rules Evid Serv 653.
Wire and mail fraud claims fail as predicate acts for RICO cause of action where plaintiffs failed to produce evidence that defendant had requisite specific intent to deceive or defraud, that he commingled funds, or that he used mails
or interstate wire communications. Stitt v Williams (1990, CA9 Cal) 919 F2d 516, CCH Fed Secur L Rep P 95647, 18
FR Serv 3d 1320.
Wire fraud was permissible basis for increasing base offense level for violation of 18 USCS § 1956, which refers to
activities constituting violations of § 1961 and does not require full RICO violation as defined by § 1962; if Congress
had wanted to limit offenses to those punishable as RICO violation, it would have cited § 1962 rather than only § 1961.
United States v Taylor (1993, CA9 Wash) 984 F2d 298, 93 CDOS 421, 93 Daily Journal DAR 905 (criticized in United
States v McClendon (1999, CA11 Ga) 195 F3d 598, 13 FLW Fed C 105).
Plain language of 18 USCS § 1956 unambiguously makes mail fraud, as listed in § 1961, specified unlawful activity
under § 1341, whether or not related to drug transactions. United States v Haun (1996, CA6 Tenn) 90 F3d 1096, 45 Fed
Rules Evid Serv 195, 1996 FED App 221P, cert den (1997) 519 US 1059, 136 L Ed 2d 614, 117 S Ct 691 and (criticized
in United States v Reed (1999, CA6 Mich) 167 F3d 984, 51 Fed Rules Evid Serv 551, 1999 FED App 49P).
Allegations of mail fraud and wire fraud are within activities defined by RICO as racketeering activities. Eisenberg v Gagnon (1983, ED Pa) 564 F Supp 1347, CCH Fed Secur L Rep P 99475, vacated, in part on other grounds,
revd, in part, affd, in part (1985, CA3 Pa) 766 F2d 770, CCH Fed Secur L Rep P 92202, 18 Fed Rules Evid Serv 783, 2
FR Serv 3d 980, cert den (1985) 474 US 946, 88 L Ed 2d 290, 106 S Ct 342, 106 S Ct 343 and (criticized in Rothwell v
Chubb Life Ins. Co. of Am. (1998, DC NH) 191 FRD 25).
Each of 14 separate mailings alleged in mail fraud indictment is separate racketeering offense, and 2 or more such
mailings can qualify as pattern of racketeering. United States v Beatty (1984, ED NY) 587 F Supp 1325.
False statements made in correspondence mailed between attorneys in context of pending litigation which is outside
scope of mail fraud statute (18 USCS § 1341) may not be predicate for civil RICO action under 18 USCS § 1964.
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Spiegel v Continental Illinois Nat'l Bank (1985, ND Ill) 609 F Supp 1083, affd (1986, CA7 Ill) 790 F2d 638, 4 FR Serv
3d 1190, cert den (1986) 479 US 987, 93 L Ed 2d 582, 107 S Ct 579.
Under 18 USCS §§ 1961 et seq. mailing must be "in furtherance of the scheme," meaning it must be at least "incidental to an essential part of the scheme," and mailings, such as regular, accurate, and truthful reports of transactions,
which conflict with purposes of scheme do not meet this test; under § 1964, use of telephone constitutes wire fraud if
use is for "purpose of executing" scheme to defraud, or at least "in furtherance of the scheme." Evanston Bank v ContiCommodity Services, Inc. (1985, ND Ill) 623 F Supp 1014.
RICO defendants' alleged scheme to defraud Food and Drug Administration (FDA) in order to obtain right to export certain heart valves is not mail fraud under 18 USCS § 1341, where FDA does not have cognizable property interest
in granting export approval, and thus FDA scheme cannot be second criminal scheme necessary to create "pattern" of
racketeering activity. Medical, Inc. v Angicor, Ltd. (1988, DC Minn) 677 F Supp 1000.
Only one predicate act of wire fraud is properly alleged in civil racketeering action under 18 USCS § 1961(5),
where complaint alleges inducement to transfer money by wire in furtherance of scheme to defraud but otherwise alleges only instructions to transfer and telephone conversations in general; actual transfers, as opposed to instructions to
transfer, are required, and telephone calls must be identified by speakers, dates, and times. La Roe v Elms Sec. Corp.
(1988, SD NY) 700 F Supp 688, CCH Fed Secur L Rep P 94061.
Substantive civil RICO and RICO conspiracy claims survive but alleged violation of New York's prohibition on
schemes to defraud does not constitute RICO predicate act, because plain language of 18 USCS § 1961(1)(A) does not
include generic fraud offenses prohibited by state statute. State Wide Photocopy, Corp. v Tokai Fin. Servs. (1995, SD
NY) 909 F Supp 137, RICO Bus Disp Guide (CCH) P 8889.
Shareholder alleged that corporate officers and directors engaged in pattern of racketeering conduct in alleged looting scheme, and other practices, including more than two predicate acts of mail fraud, consisting of payments to insiders, and at least one predicate act of obstruction of justice committed by one individual defendant in allegedly making
false statements to instant court in related salvage action; shareholder also alleged that corporation and its shareholders
were injured by Racketeering Influenced and Corrupt Organizations Act (RICO) violation because mail fraud was being
used to loot company and misrepresentation to court thwarted court's administration of salvor rights and its ability to act
as guardian to ensure artifacts would be properly handled; accordingly, RICO claim was close enough to what was required that it could not be said to be "wholly insubstantial and immaterial," and it was at least arguable and nonfrivolous, even if shareholder ultimately could not prevail on merits; thus corporate officers and directors could not defeat
service of process under RICO's nationwide service of process provisions. D'Addario v Geller (2003, ED Va) 264 F
Supp 2d 367, subsequent app, remanded (2005, CA4 Va) 2005 US App LEXIS 3233.
Shareholder alleged that corporate officers and directors engaged in pattern of racketeering conduct in alleged looting scheme, and other practices, including more than two predicate acts of mail fraud, consisting of payments to insiders, and at least one predicate act of obstruction of justice committed by one individual defendant in allegedly making
false statements to instant court in related salvage action; shareholder also alleged that corporation and its shareholders
were injured by Racketeering Influenced and Corrupt Organizations Act (RICO) violation because mail fraud was being
used to loot company and misrepresentation to court thwarted court's administration of salvor rights and its ability to act
as guardian to ensure artifacts would be properly handled; accordingly, RICO claim was close enough to what was required that it could not be said to be "wholly insubstantial and immaterial," and it was at least arguable and nonfrivolous, even if shareholder ultimately could not prevail on merits; thus corporate officers and directors could not defeat
service of process under RICO's nationwide service of process provisions. D'Addario v Geller (2003, ED Va) 264 F
Supp 2d 367, subsequent app, remanded (2005, CA4 Va) 2005 US App LEXIS 3233.
Non-disclosure of material fact by itself is insufficient to establish fraudulent intent under Racketeer Influenced and
Corrupt Organizations Act, 18 USCS § 1961 et seq. Waddell & Reed Fin., Inc. v Torchmark Corp. (2004, DC Kan) 223
FRD 566, findings of fact/conclusions of law, judgment entered (2004, DC Kan) 337 F Supp 2d 1243.
Defendant's indictment for violation of Racketeer Influenced and Corrupt Organizations Act (RICO) was not subject to dismissal based on defendant's argument that honest services fraud under 18 USCS § 1346 was not RICO predicate act; section 1346 effectively operates as "definitional clause" for mail and wire fraud violations under 18 USCS §§
1341 and 1343, and 18 USCS § 1961(1) identifies mail and wire fraud statutes as predicate acts. United States v Black
(2006, ND Ill) 469 F Supp 2d 513.
107.--Aiding and abetting
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18 USCS § 1961
Aiding and abetting mail fraud is indictable under 18 USCS § 1341, and hence is predicate act under 18 USCS §
1961(1)(b), although conspiracy to commit mail fraud is not itself indictable under 18 USCS § 1341, and so is not itself
predicate act under 18 USCS § 1961(1)(b). Fireman's Fund Ins. Co. v Plaza Oldsmobile, Ltd. (1985, ED NY) 600 F
Supp 1452.
Liquidation trustee was subject to sanctions for failing to make reasonable inquiry of witnesses that he listed for trial regarding claims for aiding and abetting under Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1961
et seq., and Colorado Organized Crime Control Act, § 18-17-101 et seq., prior to close of discovery, and for failing to
make accurate disclosures and to supplement disclosures, which prejudiced opponents; opponents were allowed to depose witnesses that would actually testify at trustee's expense. Sender v Mann (2004, DC Colo) 225 FRD 645.
108.--Intrastate communication
Purely intrastate communication is beyond reach of wire-fraud statute and cannot therefore constitute RICO predicate act; thus, RICO claim must be dismissed, where 2 phone calls described in complaint were made between telephones within one city and there was no allegation that interstate communications occurred in connection with issuance
of securities. Smith v Ayres (1988, CA5 Tex) 845 F2d 1360, CCH Fed Secur L Rep P 93784, 11 FR Serv 3d 580.
109.--Specificity of pleadings
Civil RICO complaint which alleges mail fraud as predicate offense but does not charge that defendant made any
representation to plaintiff known at time to be false falls short of specificity requirements for pleading of fraud. Flowers v Continental Grain Co., Wayne Poultry Div. (1985, CA8 Ark) 775 F2d 1051.
Fraud alleged in civil RICO complaint for mail fraud must state with particularity the false statement of fact made
by defendant which plaintiff relied on, and facts showing plaintiff's reliance on defendant's false statement of fact.
Blount Financial Services, Inc. v Walter E. Heller & Co. (1987, CA6 Tenn) 819 F2d 151, 1987-1 CCH Trade Cases P
67580 (criticized in United States v Hanley (1999, CA9 Nev) 190 F3d 1017, 99 CDOS 7389, 99 Daily Journal DAR
9798) and (criticized in System Mgmt., Inc. v Loiselle (2000, DC Mass) 91 F Supp 2d 401, RICO Bus Disp Guide
(CCH) P 9859) and (criticized in System Mgmt., Inc. v Loiselle (2000, DC Mass) 112 F Supp 2d 112).
Rule requiring party to allege fraud with particularity requires specificity in pleading RICO predicate acts of mail
and wire fraud, but dismissal should not be automatic once District Court determines that rule was not satisfied; if, for
example, it appears likely from specific allegations that defendant used interstate mail or telecommunications facilities
and particular information as to such use is likely in defendant's exclusive control, court should make second determination whether claim as presented warrants allowance of discovery and, if so, should thereafter provide opportunity to
amend defective complaint. New England Data Services, Inc. v Becher (1987, CA1 RI) 829 F2d 286, 9 FR Serv 3d
312.
Civil RICO actions establishing fraud must be pleaded with greater particularity than other pleadings, since FRCP
9(b) requires detailed allegations of that offense, and allegations regarding mail and wire fraud that did not indicate
identity of speakers who made certain representations, or of persons who received information, were insufficient to
meet particularity requirement. Saporito v Combustion Eng'g (1988, CA3 NJ) 843 F2d 666, 9 EBC 2623, vacated, remanded (1989) 489 US 1049, 103 L Ed 2d 576, 109 S Ct 1306, 10 EBC 2000.
Allegations forming basis of RICO claim that correspondence and other communications concerning particular
scheme took place through means or instrumentalities of interstate commerce, including without limitation, the mails,
together with affidavit showing that defendants corresponded by mail with investors with regard to scheme, sufficiently
plead mail fraud and satisfy Rule 9(b) of FRCP requiring fraud to be pleaded with particularity. Durham v Business
Management Associates (1988, CA11 Ala) 847 F2d 1505, CCH Fed Secur L Rep P 93808, 11 FR Serv 3d 713 (criticized in United States ex rel. Wilkins v North Am. Constr. Corp. (2000, SD Tex) 101 F Supp 2d 500).
Complaint failed to meet specificity standards for pleading RICO predicate acts, and failed to meet requirement,
under FRCP 9(b), that circumstances constituting fraud be stated with particularity, where allegations based on mail and
wire fraud were entirely general and contained no specifics of time, place, or nature of alleged communications. Alan
Neuman Productions, Inc. v Albright (1988, CA9 Cal) 862 F2d 1388, 13 FR Serv 3d 1390, cert den (1989) 493 US 858,
107 L Ed 2d 124, 110 S Ct 168.
Developer's action under Racketeer Influenced & Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq.,
failed to state claim because complaint, which referred to two alleged frauds committed in 2003 as establishing requisite
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pattern of racketeering activity, was not sufficient in that allegations concerning one of them--newspaper story--failed to
state claim of fraud. Threadbare was word for allegation that article in newspaper injured developer and was therefore
actionable. Limestone Dev. Corp. v Vill. of Lemont (2008, CA7 Ill) 520 F3d 797.
RICO (18 USCS §§ 1961 et seq.) claim need not allege time, place, and date of various wire and mail fraud violations if it otherwise provides precision and some measure of substantiation of fraud allegations. Van Dorn Co., Central
States Can Co. Div. v Howington (1985, ND Ohio) 623 F Supp 1548, 4 FR Serv 3d 1199.
Pleadings under 18 USCS § 1964 must be sufficiently particular to show indictability of alleged offender, since
RICO (18 USCS §§ 1961 et seq.) statute is based upon criminality, making plaintiff's complaint wholly inadequate
where allegations of mail and wire fraud did not specify dates or contents of alleged mail and wire transmissions, and
otherwise did not show with sufficient particularity indictability of defendants. Grant v Union Bank (1986, DC Utah)
629 F Supp 570.
Defendant is not engaged in pattern of racketeering for purposes of RICO claim where allegations of mail and wire
fraud are not well pleaded and allegations of transportation and sale of stolen goods under 18 USCS §§ 2314 and 2315,
respectively, seem to be part of single alleged criminal episode broken up for pleading purposes and no threat of "continuity plus relationship" exists. Ichiyasu v Christie, Manson & Woods International, Inc. (1986, ND Ill) 637 F Supp
187.
Former employee's RICO claim against corporation is dismissed, where plaintiff relocated from California to Maryland, loaned money and personally guaranteed loans to corporation from father and sister and others--in exchange for
allegedly unkept promises of 25 percent of outstanding stock in corporation, employment as "number 2" manager at
corporation for at least 2 years, and reimbursement of relocation costs--because plaintiff's securities fraud claims have
been dismissed and plaintiff has not alleged single fact to show circumstances of purposefully fraudulent use of mails or
wires, and thus claimed predicate acts of mail and wire fraud are insufficiently pled under FRCP Rule 9(b). Johnson v
Computer Technology Services, Inc. (1987, DC Dist Col) 670 F Supp 1036, CCH Fed Secur L Rep P 93350.
Amended complaint sufficiently pleads elements of mail and wire fraud RICO claim against individual defendant,
regardless of whether or not plaintiff could charge civil fraud on these facts, where complaint alleges in great detail that
defendant knowingly used mails and wires to obtain financing, to send contracts and checks, and to distribute proceeds
of schemes to defraud plaintiff of real estate opportunities, because allegations set forth all elements necessary under 18
USCS §§ 1341 and 1343 with particularity required by Rule 9(b). GLM Corp. v Klein (1988, SD NY) 684 F Supp 1242.
Civil racketeering claim is stated under 18 USCS § 1961(5), where complaint alleges number of predicate acts of
mail fraud related to 30 fraudulent limited partnership offerings, because "pattern" of racketeering activity is alleged,
even though only 3 limited partnerships have been sold. Parnes v Mast Property Investors, Inc. (1991, SD NY) 776 F
Supp 792, CCH Fed Secur L Rep P 96475.
Civil RICO claims against all defendants except hospital's director of surgery must be dismissed with prejudice,
where plaintiff doctor alleges generally that director has conspired with others to harass and exclude him from hospital's
vascular surgery division, because, given paucity of involvement by most of these defendants in any wrongdoing, much
less pleading with particularity how they committed mail fraud, court declines to allow plaintiff to replead. Wasserman
v Maimonides Medical Ctr. (1997, ED NY) 970 F Supp 183.
Fed. R. Civ. P. 9(b) requires that when plaintiffs allege that defendants have violated Racketeer Influenced and
Corrupt Organizations Act, 18 USCS § 1961 et seq., plaintiffs must allege predicate acts with particularity. Tarter v
United Wis. Life Ins. Co. (2002, ED La) 28 EBC 2150.
In landowners' suit against pork processor alleging violations of Racketeer Influenced and Corrupt Organizations
Act (RICO), 18 USCS § 1961 et seq., landowners failed to sufficiently allege causation of injury, RICO enterprise, pattern of racketeering activity, or predicate acts of mail and wire fraud. Andersen v Smithfield Foods, Inc. (2002, MD Fla)
207 F Supp 2d 1358, RICO Bus Disp Guide (CCH) P 10313, 15 FLW Fed D 401, affd (2003, CA11 Fla) 353 F3d 912,
57 FR Serv 3d 671, 17 FLW Fed C 129.
Minority shareholders' mail and wire fraud claims under 18 USCS § 1961 et seq. against corporate entities and executive who created them were facially insufficient as they gave insufficient details of who sent allegedly fraudulent
communications, how and when they were sent, who received them, or how they furthered fraudulent scheme, nor were
predicate acts meeting pattern requirement of Racketeer Influenced and Corrupt Organizations Act, 18 USCS § 1961 et
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seq., pled with particularity. Kirwin v Price Communs. Corp. (2003, MD Ala) 274 F Supp 2d 1242, CCH Fed Secur L
Rep P 92490, affd in part and revd in part (2004, CA11 Ala) 391 F3d 1323, 18 FLW Fed C 67.
Where plaintiff consumers in proposed class action admitted that named consumers did not have grounds for any
relief against defendant law firm under RICO because they suffered no injury to their business or property, and instead
argued absent class members would be able to do so, named consumers, who pleaded mail and wire fraud as predicate
acts to show violation of RICO, could not provide required facts to plead fraud as against class members with particularity, as was required by Fed. R. Civ. P. 9(b), and thus, it was appropriate to dismiss RICO claim for failure to state
claim. Godfredson v JBC Legal Group, P.C. (2005, ED NC) 387 F Supp 2d 543.
Consumers who brought action alleging violations of Racketeer Influenced and Corrupt Organizations Act (RICO),
18 USCS § 1961, by companies and individuals who sold debt management plans met pleading specificity requirements
for predicate acts of mail and wire fraud because allegations gave specific or approximate date of communication, name
of defendant or defendant's employee communicating with plaintiff, and described in some detail contents of communication. Baker v Family Credit Counseling Corp. (2006, ED Pa) 440 F Supp 2d 392.
Citizens' complaint and more definite statement did not meet particularity requirements set forth in Fed. R. Civ. P.
9(b) with regard to Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS §§ 1961 et seq., claims of
mail and wire fraud because nowhere did citizens identify with particularity individual defendants who committed alleged fraudulent acts; other RICO claims failed because citizens failed to specify investment injury under 18 USCS §
1962(a), failed to show that defendants acquired or maintained solid waste district entity through racketeering or unlawful debt collection under § 1962(b), failed to provide explicit details of alleged racketeering activities for claim under § 1962(c), and failed to allege conspiracy under § 1962(d). Masterson v Meade County Fiscal Court (2007, WD Ky)
489 F Supp 2d 740.
Unpublished Opinions
Unpublished: U.S. Court of Appeals for Sixth Circuit's holding in Central Distributors that plaintiffs must plead reliance in order to establish standing in civil case under Racketeer Influenced and Corrupt Organizations Act does not
conflict with Sixth Circuit's holding in Daniel and U.S. Supreme Court's holding in Neder that government need not
prove reliance in criminal mail fraud prosecutions. Chaz Constr., LLC v Codell (2005, CA6 Ky) 137 Fed Appx 735.
Unpublished: Although district court did not err in requiring disadvantaged business enterprises (DBE) to plead reliance as to their civil claim under Racketeer Influenced and Corrupt Organization Act against state officials who allegedly engaged in fraudulent administration of DBE program, district court's denial of DBE's Fed. R. Civ. P. 15(a) motion
to amend was erroneous because amendments were not futile. Chaz Constr., LLC v Codell (2005, CA6 Ky) 137 Fed
Appx 735.
Unpublished: District court properly dismissed count two--RICO claim--on basis of Fed. R. Civ. P. 9(b) as allegations primarily rested upon predicate acts of mail fraud, wire fraud, and fraud on financial institution and so were to be
pled with particularity. Lesavoy v Gattullo-Wilson (2006, CA2 NY) 2006 US App LEXIS 5480.
Unpublished: Where business owners alleged that city officials committed Racketeer Influenced and Corrupt Organizations Act, 18 USCS §§ 1961-1968, violations by using their city positions for their own benefit through pattern of
criminal behaviors, including wire and mail fraud, claims were properly dismissed because business owners failed to
describe any specific acts of fraud. Leeds v City of Muldraugh (2006, CA6 Ky) 2006 US App LEXIS 7522.
Unpublished: District court properly dismissed Racketeering Influenced and Corrupt Organizations Act (RICO)
counts in plaintiff's complaint because complaint alleged that wire fraud and mail fraud constituted predicate acts for
defendants' RICO, 18 USCS § 1961(1), violations, and plaintiff failed to plead those allegations with particularity required by Fed. R. Civ. P. 9(b) by failing to provide details regarding harm he suffered personally. Silverstein v Percudani (2006, CA3 Pa) 2006 US App LEXIS 30048.
110.--Particular cases
Mailing of customer account statements "helped to lull customers into sense of security" by furthering impression
that enterprise was legitimate business, and without such statements customers might have closed their accounts sooner
and discovered that they were victims of fraud; thus, even though mailings were only tangentially related to scheme,
they were sufficient to satisfy mailing element of RICO. United States v Biesiadecki (1991, CA7 Ill) 933 F2d 539, 33
Fed Rules Evid Serv 48.
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District Court did not err in denying defendant's motion to dismiss money laundering counts on ground that money
laundering statute (18 USCS § 1957) requires money to have been derived from "specified unlawful activity" and that
this phrase does not include offense of wire fraud with which he was charged; 18 USCS § 1961 specifically lists wire
fraud as "specified unlawful activity" within meaning of money laundering statute. United States v Hare (1995, CA8
Mo) 49 F3d 447, 41 Fed Rules Evid Serv 1009, reh den (1995, CA8 Mo) 1995 US App LEXIS 7619 and cert den (1995)
516 US 879, 133 L Ed 2d 143, 116 S Ct 211 and (criticized in United States v Stein (2005, ED Pa) 2005 US Dist LEXIS
11141).
Dismissal of Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS §§ 1961 et seq., action based
on mail and wire fraud was affirmed because complaint contained no allegations of reliance by employees on misrepresentations by defendants regarding handling of their worker's compensation claims, and, under law of Sixth Circuit, this
omission was fatal to their RICO claims. Brown v Cassens Transp. Co. (2007, CA6 Mich) 492 F3d 640, 2007 FED App
257P.
Plaintiffs sufficiently allege pattern of racketeering activity where they assert that defendants mailed monthly
statements and other documents to plaintiffs and used telephone wires to communicate with plaintiffs in carrying out
churning scheme. Roche v E.F. Hutton & Co. (1984, MD Pa) 603 F Supp 1411, CCH Fed Secur L Rep P 92241.
Complaint properly states predicate offense for RICO claim where bond buyers allege conspiracy to commit fraud,
commission of fraud by use of telephone and mail, and intent to commit fraud, because even though no specifics were
alleged about individual telephone or mail communications, complaint sufficiently apprised defendants of predicate
offense of mail fraud which is basis of civil RICO claim. Kronfeld v First Jersey Nat'l Bank (1986, DC NJ) 638 F
Supp 1454, CCH Fed Secur L Rep P 92898 (criticized in United States ex rel. Atkinson v Pa. Shipbuilding Co. (2000,
ED Pa) 2000 US Dist LEXIS 12081).
Purchaser who alleged series of misrepresentations and omissions constituting securities fraud, interstate transport
of stolen property and mail fraud arising from purchase of undivided interest in coal mining operation sufficiently alleged RICO pattern of racketeering activity where (1) defendants allegedly committed several acts to entice purchaser to
enter transaction even though there may have been only one transaction or scheme intended in case, and (2) defendants
allegedly committed racketeering acts inducing individuals other than purchaser to invest in operation. Penturelli v
Spector Cohen Gadon & Rosen (1986, ED Pa) 640 F Supp 868, CCH Fed Secur L Rep P 93113.
Allegations by automobile manufacturer against dealer, charging check-kiting scheme and bankruptcy fraud, state
sufficient predicate acts under 18 USCS § 1343 and RICO. Stamps v Ford Motor Co. (1986, ND Ga) 650 F Supp 390.
University has sufficiently alleged at least two predicate acts of racketeering activity where (1) university alleged
that defendants unlawfully used mail to send false and fraudulent bids, invoices and bills in violation of 18 USCS §
1341 and (2) university alleged defendants violated Travel Act (18 USCS § 1952) by placing false and fraudulent invoices in mail depositories. Temple University v Salla Bros., Inc. (1986, ED Pa) 656 F Supp 97.
Civil RICO counterclaim is dismissed with prejudice after 2 amendments to attempt to state claim, where alleged
predicate acts of mail and wire fraud are insufficiently pled under Rule 9(b), since particular use of wires to further or
conceal anticompetitive acts is not specified, and alleged obstruction of Bureau of Alcohol, Tobacco and Firearms investigation by destroying or concealing documents lacks allegation of bribery necessary to plead predicate act of 18
USCS § 1510 violation, because remaining, doubtful allegation of money-laundering in violation of 18 USCS § 1956,
which probably did not become effective until after alleged criminal activity took place, is insufficient to constitute
"pattern" of racketeering activity required by 18 USCS § 1961(5). Pearlstine Distributors, Inc. v Freixenet USA, Inc.
(1988, DC SC) 678 F Supp 133.
Indictment characterizing conduct of alleged RICO enterprise as consisting of operating illegal landfill and illegal
transferring, storing, and disposing of medical and infectious waste is adequate, because properly stated allegations of
mail or wire fraud are not invalidated as 18 USCS § 1961(1) predicate acts simply because enterprise is accused of violations of environmental laws as well. United States v Paccione (1990, SD NY) 738 F Supp 691.
Corporate shareholders did not have right to bring RICO action pursuant to 18 USCS §§ 1961 et seq., where, although shareholders' option to purchase country club complex contained provision that property would not be further
encumbered, developer entered into secret transactions to raise capital which further encumbered property, and shareholders alleged that developer was involved in mail fraud to carry out scheme, because shareholders were injured in
business or property only through injury to corporation, and any losses would be shared proportionally by other shareholders. Schrag v Dinges (1993, DC Kan) 825 F Supp 954, RICO Bus Disp Guide (CCH) P 8367.
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Partial judgment on pleadings was granted to defendants because there was no "predicate act" to constitute racketeering activity on which to base plaintiff's claims for violations of 18 USCS § 1962(c),(d); there were no allegations of
mailings as to certain alleged misrepresentations, and as for mailings to third parties, causal link between alleged mail
fraud and purported fraudulent activity was too attenuated to sustain liability under Racketeer Influenced and Corrupt
Organizations Act. Nolan v Galaxy Sci. Corp (2003, ED Pa) 269 F Supp 2d 635.
Portions of Racketeer Influenced and Corrupt Organizations Act indictment were stricken, as allegations of false
lien scheme involving seized vehicles did not amount to mail fraud under 18 USCS § 1341; claims that defendant placed
false liens on seized vehicles to prevent their forfeiture under 18 USCS § 982(a)(1) and 21 USCS § 853(a) due to involvement in money laundering or drug offenses alleged deprivation of intangible right not covered under 18 USCS §
1341. United States v Hosseini (2006, ND Ill) 436 F Supp 2d 963.
Wire fraud claim by plaintiffs, who alleged they were defrauded with regard to loans to and investments in defendant corporation, was insufficient to serve as predicate act under RICO Act because plaintiffs did not allege that any wire
communications occurred in interstate commerce; all parties were residents of state. Defazio v Wallis (2007, ED NY)
500 F Supp 2d 197.
In action in which plaintiffs, successors of subsidiaries of parent company, asserted claims against defendants,
banks and accounting firms, for aiding and abetting fraud by parent company insiders and violating federal and New
Jersey Racketeer Influenced and Corrupt Organizations Acts based on predicate acts of mail and wire fraud, plaintiffs
failed to adequately plead proximate cause because even if defendants helped to conceal parent company's true financial
condition plaintiffs did not adequately allege that it was foreseeable that proceeds paid to subsidiary as part of
sale-leaseback transaction would be looted by parent company insiders; plaintiffs' allegation that accounting firm had
knowledge of insiders' fraud did not satisfy Fed. R. Civ. P. 9(b) because plaintiffs did not allege that accounting firm
stood to benefit from aiding insiders' fraud and allegations that accounting firm failed to confirm that parent company
would pay reimbursement credits did not raise inference that firm recklessly disregarded substantial possibility that
parent company was being looted. In re Parmalat Sec. Litig. (2007, SD NY) 501 F Supp 2d 560.
111.--Financial institutions
Consumer loan company's complaint of mail fraud against financier in civil RICO action failed to allege facts sufficient to support claims; sending financial statement misconstruing prime rate provided by terms of contract between
parties may have been breach of contract, but did not amount to mail fraud, and financier's decision to charge interest
rate based on bank's advertised prime rate rather than rate bank charged its best customers as required under contract
could not have been reasonably calculated to deceive business entity such as consumer loan company, since financier
was separate and distinct entity from bank and in no better position than loan company to obtain information about
bank's prime rate. Blount Financial Services, Inc. v Walter E. Heller & Co. (1987, CA6 Tenn) 819 F2d 151, 1987-1
CCH Trade Cases P 67580 (criticized in United States v Hanley (1999, CA9 Nev) 190 F3d 1017, 99 CDOS 7389, 99
Daily Journal DAR 9798) and (criticized in System Mgmt., Inc. v Loiselle (2000, DC Mass) 91 F Supp 2d 401, RICO
Bus Disp Guide (CCH) P 9859) and (criticized in System Mgmt., Inc. v Loiselle (2000, DC Mass) 112 F Supp 2d 112).
Plaintiffs' amended complaint in civil RICO action is sufficiently detailed to satisfy particularity requirement of
FRCP, Rule 9(b), purpose of which is to provide defendant with notice of substance of plaintiff's claim in order that
defendant may prepare responsive pleading, where fraud count specifies parties and participants to alleged fraud, representations made, nature in which statements are alleged to be misleading or false, time, place, and content of representations, fraudulent scheme, fraudulent intent of defendants, reliance on fraud, and injury resulting from fraud, and where
plaintiffs also identified fraudulent loan documents and attached copies of them to complaint, although plaintiffs omitted identities of borrowers who received sub-prime loans, which information was in hands of the defendant. Michaels
Bldg. Co. v Ameritrust Co., N.A. (1988, CA6 Ohio) 848 F2d 674, 1988-1 CCH Trade Cases P 68013.
Debtors' RICO claim against bank officers for allegedly creating and then dishonoring de facto line of credit in
commercially unreasonable manner is dismissed, where alleged predicate offenses comprising pattern of racketeering
activity were mailings of over 300 overdraft notices and banking statements which supposedly convinced debtors they
had unusual de facto line of credit through bank's honoring of overdraft checks despite negative balance of up to $
310,000 or more, because such mailings did not further allege fraudulent scheme and thus did not constitute mail fraud,
and without sufficient pleading of predicate offenses no violation of 18 USCS § 1962 can be found. H.G. Gallimore,
Inc. v Abdula (1987, ND Ill) 652 F Supp 437.
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Corporation's 18 USCS § 1962 RICO complaint must be dismissed for failure to properly plead predicate offenses,
where corporation alleges that defendant bank knew or should have known that checks it honored were stolen and
should have mailed corporation certain account statements, because (1) 18 USCS § 1341 mail fraud pleading requires
alleged use of mails and nonuse of mails is insufficient, and (2) 18 USCS § 2315 criminalizes only "knowing" receipt of
stolen property and not mere negligent acceptance of stolen checks. P.M.F. Services, Inc. v Grady (1988, ND Ill) 681
F Supp 549.
112.--Insurance
Each mailing by insured to insurer of false statements of value of insured's goods and mailing of false insurance
claim could constitute violation of mail fraud statute, and thus met RICO predicate act requirement. Albany Ins. Co. v
Esses (1987, CA2 NY) 831 F2d 41 (ovrld in part by United States v Indelicato (1989, CA2) 865 F2d 1370) and (ovrld as
stated in Advanced Magnetics v Bayfront Partners (1994, SD NY) CCH Fed Secur L Rep P 98343) and (ovrld as stated
in Jenkins v Sea-Land Serv. (1994, SD NY) 1994 US Dist LEXIS 11477).
Misrepresentation by defendants of obligation to issue insurance for reinsurance company, in absence of allegations
of criminal enterprise or mail-fraud scheme, is not violation of RICO Act. River Plate Reinsurance Co. v Jay-Mar
Group, Ltd. (1984, SD NY) 588 F Supp 23.
Complaint in insured's civil RICO action against insurer and its parent corporation, alleging mail and wire fraud
and common-law fraud in connection with insured's and parent's failure to pay and delay in paying claims against insured under policy and fidelity bonds issued by insurer, failed to satisfy particularity requirements for pleading fraud,
where complaint gave rambling account of insurer's and parent's refusal on 3 occasions to promptly compensate insured,
insured did not provide text of policies or quote from any document or writing allegedly sent in furtherance of fraudulent scheme, insured failed to specify nature of allegedly false documents filed by insurer and parent with public agencies, and complaint did not indicate nature of allegedly false representations. Avnet, Inc. v American Motorists Ins. Co.
(1987, SD NY) 115 FRD 588.
Plaintiffs failed to raise genuine issue of material fact as to existence of mail or wire fraud violations as RICO
predicate acts, where they testified that defendant insurance company told them that they had to take polygraph examinations to avoid denial of their insurance claims, since defendants were not being deceptive concerning company's practices, and testimony thus supported contract or insurance law claim, but not claim for fraud. Marcial v Coronet Ins.
Co. (1988, ND Ill) 122 FRD 529, affd (1989, CA7 Ill) 880 F2d 954.
Cause of action is not alleged under 18 USCS § 1964 where there is no pretense of alleging pattern of racketeering
activity; furthermore, mere making of claim under insurance policy, even if willfully exaggerated, is not tantamount to
racketeering activity which would be basis for assertion of treble damage claim. Ebnan Antique Rugs & Tapestries,
Inc. v New York Marine Managers, Inc. (1984, Sup) 128 Misc 2d 84, 488 NYS2d 534.
113.--Tax returns
Mailing fraudulent state sales tax return qualifies as racketeering activity under RICO (18 USCS § 1961). Illinois
Dep't of Revenue v Phillips (1985, CA7 Ill) 771 F2d 312 (ovrld in part as stated in CIB Bank v Esmail (2004, ND Ill)
2004 US Dist LEXIS 26817).
Mailing of fraudulent tax returns was indictable as mail fraud and could therefore serve as predicate act for RICO
purposes, despite defendant's claim that racketeering charges based on such mailing were improper because Congress
deliberately omitted tax fraud from list of predicate acts that may give rise to RICO violations. United States v Busher
(1987, CA9 Hawaii) 817 F2d 1409.
114.--Trade practices
Claim that competitors of wholesale appliance distributor used United States mails and interstate telephone calls on
2 or more occasions in furtherance of fraudulent scheme to obtain products from distributor's supplier by misrepresenting area in which products would be sold, and then to sell products in distributor's exclusive territory, sufficiently
pleaded mail and wire fraud as "racketeering activity" under 18 USCS § 1961 to support civil RICO action. Schreiber
Distrib. Co. v Serv-Well Furniture Co. (1986, CA9 Cal) 806 F2d 1393.
Claim in civil RICO action by wholesale appliance distributor that defendant competitors fraudulently obtained
single appliance shipment from distributor's supplier which they sold in distributor's exclusive territory, but which failed
to set forth facts establishing threat of continuing racketeering activity, referred to isolated event and was insufficient to
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allege pattern of racketeering activity within meaning of 18 USCS § 1961, although it sufficiently alleged relationship
between predicate acts of mail and wire fraud and fraudulent scheme to evade distributor's exclusive distributorship
agreement with supplier. Schreiber Distrib. Co. v Serv-Well Furniture Co. (1986, CA9 Cal) 806 F2d 1393.
Predicate illegal acts need not be part of different criminal episodes to constitute "pattern of racketeering activity"
under RICO; thus, ceramic tile dealers claiming 24 separate acts of mail and wire fraud by tile manufacturer sufficiently
alleged pattern of racketeering activity to support RICO claim, even though illegal acts related to single fraudulent
scheme. California Architectural Bldg. Prods., Inc. v Franciscan Ceramics, Inc. (1987, CA9 Cal) 818 F2d 1466, cert
den (1988) 484 US 1006, 98 L Ed 2d 650, 108 S Ct 698.
Plaintiff publisher's civil RICO complaint claiming that defendant competing publisher and others committed mail
and wire fraud in soliciting plaintiff's advertising customers through misrepresentation that defendant was connected
with plaintiff failed to allege pattern of racketeering activity; although predicate acts were sufficient in number and were
sufficiently related in allegedly furthering defendant's efforts to gain competitive advantage over plaintiff, all that resulted was a single, nonrecurring scheme to defraud single entity by taking unfair competitive advantage in quite narrow
business context. Eastern Pub. & Advertising v Chesapeake Pub. & Advertising (1987, CA4 Md) 831 F2d 488, 4
USPQ2d 1637, 1987-2 CCH Trade Cases P 67773, vacated, remanded (1989) 492 US 913, 106 L Ed 2d 582, 109 S Ct
3234.
Plaintiff in civil RICO action based on alleged predicate acts of mail and wife fraud failed to plead fraud with sufficient particularity, where complaint stated only that at some point during 4-year period, someone employed by defendant misrepresented to someone employed by plaintiff that plaintiff would be exclusive distributor for defendant and
would receive price benefits from defendant, and there was no indication of who made alleged misrepresentations, to
whom such misrepresentations were made, or when and where they were made. Antilles Trading Co., S.A. v Scientific-Atlanta, Inc. (1986, ND Ga) 117 FRD 447.
Isolated criminal episode, though accomplished through number of fraudulent acts, does not evidence threat of continuing criminal activity, thus where plaintiff alleged that defendants committed number of mail and wire fraud violations in furtherance of scheme to obtain and market under different name certain computer information, those specified
acts alone failed to establish required "pattern of racketeering activity" because only one criminal episode was involved,
alleged scheme to illegally market plaintiff's computer program under different name. Fleet Management Systems, Inc.
v Archer-Daniels-Midland Co. (1986, CD Ill) 627 F Supp 550.
Pleading of predicate acts for RICO claim must meet particularity requirements of Federal Rules of Civil Procedure, Rule 9(b), where acts are based in fraud; thus motion to dismiss was granted where complaint failed to allege particular means of presumed mail or wire fraud, there were no specifics as to times, people, or documents involved in
false orders, and there was no indication of even vaguest sort as to when alleged bribes or extortion demands occurred
and who made them to whom; absence of persons, dates, and mediums in attempted allegations of fraud, bribery, and
extortion is fatal in civil RICO action under § 1964. Gregoris Motors v Nissan Motor Corp. (1986, ED NY) 630 F
Supp 902, 1988-2 CCH Trade Cases P 68295.
Complaint does not allege racketeering by Cadillac repair service that allegedly charged customer by stated hourly
rate multiplied by number of hours manufacturer's manual states repairs should take, instead of number of hours repairs
actually took, where wire fraud claim is based on repair service's response to plaintiff's two telephone calls to ask
whether repairs to his vehicle were completed, because calls are "totally incidental" to complained of scheme and cannot suffice as having "furthered the scheme." Wolin v Hanley Dawson Cadillac, Inc. (1986, ND Ill) 636 F Supp 890.
Complaint properly sets forth pattern of racketeering activity where freight forwarding company alleged French
corporation performed several acts of mail and wire fraud, over 4- to 6-month time period, to effectuate single scheme
to eliminate forwarder and others from Asian freight forwarding business in United States. American Bonded Warehouse Corp. v Compagnie Nationale Air France (1987, ND Ill) 653 F Supp 861.
Investors in device to convert natural gas to liquid natural gas properly allege predicate acts of mail and wire fraud
so as to properly allege "racketeering activity" under 18 USCS § 1961(1) in civil RICO action against promoters, where
complaint alleges (1) falsely positive factual representations about merits and track record of gas conversion program,
which--when communicated in context of packaged investment offering including ready financing--induced investors to
invest, (2) promoters who used mails and wires knew of false representations or recklessly disregarded representations,
and (3) use of mails and wires facilitated execution of underlying scheme to defraud, notwithstanding that securities
fraud claims against firm that rendered accounting services to principal promoter were dismissed, since investors may
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prove firm had knowledge of scheme and used mails that furthered plan, even if mailings did not contain fraudulent
statements. In re Gas Reclamation, Inc. Sec. Litigation (1987, SD NY) 659 F Supp 493, CCH Fed Secur L Rep P
93217 (criticized in Silverman v Ernst & Young, LLP (1999, DC NJ) 1999 US Dist LEXIS 17703).
Automobile dealer fails to establish violation of RICO (18 USCS § 1962(c)) where he alleges that automobile supplier conspired to establish enterprise to acquire dealer's franchise, meeting "enterprise" requirement of § 1962(c), but
fails to allege adequately both predicate acts of racketeering activity and pattern of racketeering activity, since allegations of mail fraud under 18 USCS § 1341 and of wire fraud under 18 USCS § 1343 are not stated with sufficient particularity to pass test of FRCP 9, and even if predicate acts had been made out, dealer failed to allege "continuity plus relationship" required to establish pattern of racketeering activity. Cemar, Inc. v Nissan Motor Corp. (1988, DC Del) 678
F Supp 1091, 1988-1 CCH Trade Cases P 67922.
RICO claims are not dismissed for failure to plead sufficient number of indictable predicate acts, even though instant complaint is dismissed without prejudice for other pleading deficiencies, because claims that former employees
breached fiduciary duties by misappropriating confidential and proprietary business information and funds could potentially state violations of mail and wire fraud statutes and support valid RICO claims upon repleading. Celpaco, Inc. v
MD Papierfabriken (1988, DC Conn) 686 F Supp 983.
115. Mail theft
RICO claim of owners of accounts receivable corporation is dismissed, where complaint alleges defendant misrepresented himself to postal officials as employee of corporation in order to gain access to corporation's mailbox and to
steal corporation's checks without its knowledge or that of check forwarders, because based on these allegations, defendant committed mail theft under 18 USCS § 1708 instead of mail fraud under 18 USCS § 1341, and mail theft is not
predicate act or racketeering activity under 18 USCS § 1961. Haskin v Corporacion Insular De Seguros (1987, DC
Puerto Rico) 666 F Supp 349.
116. Malicious prosecution
Plaintiff's allegation of malicious prosecution by defendants does not constitute predicate act for purposes of RICO
violation because recognizing it is predicate act would severely undermine settled state policy of discouraging such actions and provide malicious prosecution plaintiffs with unprecedented access to federal courts. Von Bulow v Von Bulow (1987, SD NY) 657 F Supp 1134 (criticized in Livingston Downs Racing Ass'n v Jefferson Downs Corp. (2002, MD
La) 257 F Supp 2d 819, RICO Bus Disp Guide (CCH) P 10410, 2003-1 CCH Trade Cases P 73946).
117. Murder
Murder and conspiracy to murder may both be predicate acts under 18 USCS § 1961 and, although state law precludes conviction on both counts, defendant is "chargeable" under state law with 2 separate predicate acts and thus with
engaging in racketeering activity under 18 USCS § 1961. United States v Licavoli (1984, CA6 Ohio) 725 F2d 1040, 14
Fed Rules Evid Serv 1782, cert den (1984) 467 US 1252, 82 L Ed 2d 840, 104 S Ct 3535.
Defendant's motion to preclude Government from offering into evidence at his trial for murder in aid of racketeering lyrics found on another individual's computer was denied because they were not unduly prejudicial, were relevant to
determining whether criminal enterprise existed and whether it was engaged in racketeering activity under 18 USCS §
1959 and 18 USCS § 1961(1), and were not hearsay but were statements made by co-conspirator during course of and in
furtherance of conspiracy involving defendant. United States v Wilson (2006, ED NY) 493 F Supp 2d 460.
118. Obscenity
Bookstore owner's challenge to constitutionality of adding state and federal offenses involving obscenity to 18
USCS § 1961(1) definition of "racketeering activity" is summarily denied, where owner contends that RICO, as applied
to obscenity, is facially overbroad and vague, impermissibly chills protected expression, and authorizes unlawful prior
restraint on expression, because challenge is really to underlying criminal obscenity laws or to portions of RICO already
declared constitutional by Supreme Court, and sweeping RICO pretrial restraint powers are susceptible of constitutional
applications. Alexander v Thornburgh (1989, DC Minn) 713 F Supp 1278, dismd without op (1989, CA8 Minn) 881
F2d 1081.
119. Obstruction of justice
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Civil RICO complaint by plaintiff brokerage employee against defendant brokerage arising from termination of
plaintiff's employment, assertedly to prevent plaintiff from reporting to authorities defendant's predicate acts of mail,
wire, and securities fraud, would not be construed as containing elements of obstruction of justice as additional predicate acts, where such obstruction was nowhere mentioned in complaint, which had been pending for more than 2 years
after filing of defendant's motion to dismiss without a request by plaintiff for leave to amend, and claim was presented
for first time at appellate oral argument. Pujol v Shearson/American Express, Inc. (1987, CA1 Puerto Rico) 829 F2d
1201.
Obstruction of justice consisting of alleged erasure of tape-recorded telephone meeting and submission of altered
tape in state-court proceedings could not constitute predicate act for claim under 18 USCS § 1961(1), as act did not relate to proceeding in federal court. Bologna v Allstate Ins. Co. (2001, ED NY) 138 F Supp 2d 310, RICO Bus Disp
Guide (CCH) P 10051, 2001-1 CCH Trade Cases P 73253.
Partial judgment on pleadings was granted to defendants because there was no "predicate act" to constitute racketeering activity on which to base plaintiff's claims for violations of 18 USCS § 1962(c),(d); allegations that amounted to
run-of-the-mill litigation disputes did not rise to level of obstruction of justice. Nolan v Galaxy Sci. Corp (2003, ED Pa)
269 F Supp 2d 635.
Where plaintiff aviation company, which alleged that it was induced into entering into fixed based operations contract on false misrepresentations by defendants, town, its airport commission, and members of commission, asserted that
obstruction of justice was alleged predicate act for its Racketeer Influenced and Corrupt Organizations Act claim, and
that defendants filed false reports with federal and state agencies to improperly obtain funds, although obstruction of
justice was racketeering activity under 18 USCS § 1961(1)(B), term referred to interferences with court proceedings as
set forth in 18 USCS § 1503, and because nothing in allegations suggested that any defendant engaged in interference
with any court proceeding, claim failed. Barry Aviation, Inc. v Land O'Lakes Mun. Airport Comm'n (2005, WD Wis)
366 F Supp 2d 792.
120. Patent infringement
Court of Appeals for Federal Circuit applies Federal Circuit law to issues pertaining to patent law, including determination whether party's conduct before Patent and Trademark Office qualifies as predicate racketeering act for RICO.
Univ. of W. Va. v Van Voorhies (2002, CA FC) 278 F3d 1288, 61 USPQ2d 1449, RICO Bus Disp Guide (CCH) P
10235.
Patent infringement does not constitute "racketeering activity" as defined in § 1961. Michod v Walker Magnetics
Group, Inc. (1987, ND Ill) 115 FRD 345, 4 USPQ2d 1815.
121. Perjury
Although there may be tension between congressional decision to omit perjury as RICO predicate act, but to include mail fraud which has been furthered by perjury, court will not carve out new exception for mail fraud involving
state court perjury. United States v Eisen (1992, CA2 NY) 974 F2d 246, 36 Fed Rules Evid Serv 580, cert den (1993)
507 US 998, 123 L Ed 2d 178, 113 S Ct 1619 and cert den (1993) 507 US 1029, 123 L Ed 2d 467, 113 S Ct 1840, application den sub nom United States v Napoli (1993, ED NY) 1993 US Dist LEXIS 9149.
Perjury is not RICO (18 USCS §§ 1961 et seq.) predicate act, and claim must be dismissed where perjury was only
predicate act properly alleged. Rand v Anaconda-Ericsson, Inc. (1985, ED NY) 623 F Supp 176, CCH Fed Secur L Rep
P 92330, affd (1986, CA2 NY) 794 F2d 843, CCH Fed Secur L Rep P 92827, 1986-1 CCH Trade Cases P 67183, cert
den (1986) 479 US 987, 93 L Ed 2d 582, 107 S Ct 579.
122. Robbery
"Racketeering activity" as defined in 18 USCS § 1961 includes state crime of robbery. United States v Aleman
(1979, CA7 Ill) 609 F2d 298, cert den (1980) 445 US 946, 63 L Ed 2d 780, 100 S Ct 1345.
Defendant police officers' acts of taking drugs and money from drug dealers was properly considered robbery,
which constitutes RICO predicate offense, rather than larceny, which is not predicate offense, where defendants handcuffed their victims and detained them in police cars, sufficient acts to satisfy force element of robbery under state law.
United States v Gonzalez (1994, CA11 Fla) 21 F3d 1045, 40 Fed Rules Evid Serv 1134, 8 FLW Fed C 251.
123. Securities fraud
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District Court properly dismissed civil RICO claim for failure to sufficiently allege pattern of racketeering activity,
where allegations were based on rescission of securities transaction underlying federal securities fraud claim which District Court properly dismissed because such conduct did not amount to fraud. Forkin v Rooney Pace, Inc. (1986, CA8
Mo) 804 F2d 1047, CCH Fed Secur L Rep P 92982.
Purchaser-seller standing requirement applicable to causes of action under § 10b-5 of Securities Exchange Act does
not apply to RICO claims based upon predicate acts alleged to be securities fraud under § 10b-5. Securities Investor
Protection Corp. v Vigman (1990, CA9 Cal) 908 F2d 1461, CCH Fed Secur L Rep P 95395, revd on other grounds,
remanded (1992) 503 US 258, 117 L Ed 2d 532, 112 S Ct 1311, 92 CDOS 2460, 92 Daily Journal DAR 4030, CCH Fed
Secur L Rep P 96555, 6 FLW Fed S 89, remanded, on remand (1992, CA9) 964 F2d 924, 92 CDOS 4264, 92 Daily
Journal DAR 6741.
Although 18 USCS § 1961 defines racketeering activity as including any offense involving fraud in sale of securities, such section is not alternative and cumulative remedy for private plaintiffs alleging security frauds or misrepresentations in context of real estate transactions where if facts as alleged are true, plaintiffs then are able to state causes of
action under other appropriate federal statutes. Adair v Hunt International Resources Corp. (1981, ND Ill) 526 F Supp
736, CCH Fed Secur L Rep P 98474, 33 FR Serv 2d 679.
Securities fraud claim under 18 USCS § 1961 is not stated in absence of allegations of prior criminal convictions of
defendants or special racketeering injury. Rush v Oppenheimer & Co. (1984, SD NY) 592 F Supp 1108, CCH Fed Secur L Rep P 91639, vacated, on reh on other grounds (1984, SD NY) 596 F Supp 1529 and revd on other grounds
(1985, CA2 NY) 779 F2d 885, CCH Fed Secur L Rep P 92406 (criticized in Southern Sys. v Torrid Oven, Ltd. (2000,
WD Tenn) 105 F Supp 2d 848) and (criticized in Uwaydah v Van Wert County Hosp. (2002, ND Ohio) 246 F Supp 2d
808) and (criticized in Raymond James Fin. Servs. v Saldukas (2003, Fla App D2) 851 So 2d 853, 28 FLW D 1863).
For purposes of RICO, 18 USCS § 1962(c), "racketeering activity" includes any act indictable under 18 USCS §
1341, 18 USCS § 1343, or securities fraud. Federal Deposit Ins. Corp. v Kerr (1986, WD NC) 637 F Supp 828, CCH
Fed Secur L Rep P 92842.
Complaint is dismissed where corporate stockholder did not allege predicate acts in that stockholder did not plead
multiple defendant securities fraud scheme with sufficient particularity. Limited, Inc. v McCrory Corp. (1986, SD NY)
645 F Supp 1038, CCH Fed Secur L Rep P 92861.
Condominium unit sales are not "investment contracts" and therefore not securities transactions for purposes of
racketeering activity under RICO claim, where purchasers bought units from developer as residences and as investments, but there were no collateral agreements involving rental or other activity, and thus purchasers had nothing more
than normal real estate investment. Dumbarton Condominium Asso. v 3120 R Street Associates Ltd. Partnership
(1987, DC Dist Col) 657 F Supp 226, CCH Fed Secur L Rep P 93221.
Civil racketeering claim is not stated under 18 USCS § 1961(1)(D), where predicate offenses of securities fraud are
based on state securities laws, because federal violation is required for racketeering activity. Gatti v National Bank of
Commonwealth (1988, WD Pa) 696 F Supp 153.
Civil racketeering claim is stated under 18 USCS § 1961(1), where complaint alleges that multiple schemes were
engaged in to defraud securities investors, because "continuity" component of "pattern" requirement is satisfied, notwithstanding that alleged activity stopped upon discovery after only a few weeks' duration, since future activity may
still have been threatened, depending on why activity was discontinued. Morrow v Black (1990, ED NY) 742 F Supp
1199, CCH Fed Secur L Rep P 95690.
Allegation of noncompliance with Regulation A, 15 USCS § 77c(b), cannot count as RICO predicate act, where §
77c(b) provides issuers of certain securities with exemption from general registration requirements of federal securities
laws, contingent on meeting technical requirements of detailed regulations, because failure to meet requirements simply
results in suspension of registration exemption and noncriminal violation of law does not fall within statutory definition
of "racketeering activity" at 18 USCS § 1961(1). Koulouris v Estate of Chalmers (1992, ND Ill) 790 F Supp 1372.
124.--Churning
Complaint which simply alleges garden variety securities fraud claim of churning of securities account is insufficient to state a claim under 18 USCS §§ 1961 et seq. Divco Constr. & Realty Corp. v Merrill Lynch Pierce Fenner &
Smith, Inc. (1983, SD Fla) 575 F Supp 712, CCH Fed Secur L Rep P 91430.
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Investor's claim will be dismissed for failure to allege predicate acts upon which pattern of racketeering activity
could be found where investor's claims arising from churning of commodities were not securities and could not be made
predicate acts, and alleged wrongful deposits of funds could not be asserted as predicate acts under RICO, as they had
prescribed. Romano v Merrill Lynch, Pierce, Fenner & Smith, Inc. (1986, ED La) 638 F Supp 269, CCH Fed Secur L
Rep P 92923, affd (1987, CA5 La) 834 F2d 523, CCH Fed Secur L Rep P 93693, 9 FR Serv 3d 1318, cert den (1988)
487 US 1205, 101 L Ed 2d 883, 108 S Ct 2846.
125.--Particular cases
Investor whose stock declined in value after disclosure that corporation paid bribe to obtain subcontracts failed to
allege that he was injured "by reason of" racketeering activity for purposes of civil RICO action, since inflated value of
stock before disclosure was not by reason of bribery, but by reason of nondisclosure which did not constitute securities
fraud actionable under RICO. Roeder v Alpha Industries, Inc. (1987, CA1 Mass) 814 F2d 22, CCH Fed Secur L Rep P
93187.
Requisite predicate acts necessary to establish pattern of "racketeering", defined in 18 USCS § 1961, inter alia, as
"extortion", "wire fraud", "mail fraud", or "fraud in the sale of securities", are absent, despite allegations that defendant
shareholders failed to file shareholders' derivative suit and that defendants' proxy solicitations involved wire fraud, mail
fraud, and "extortive acts", since neither proxy solicitation nor derivative suit constitutes "sale" of securities, record
does not support mail fraud, which requires use of mail with false or fraudulent pretenses for specific purpose of causing pecuniary loss, allegation of wire fraud is unsupported since there is no evidence of interstate wire communication,
and proposed shareholder derivative suit was neither served nor filed, was not catalyst for corporate action, and accordingly was not extortionate act. First Pacific Bancorp, Inc. v Bro (1988, CA9 Cal) 847 F2d 542, CCH Fed Secur L Rep
P 93773.
Complaint did not sufficiently allege pattern of racketeering activity where 3 of 4 alleged predicate acts concerned
misstatements and omissions in proxy statement which were insufficient for liability under securities laws and therefore
could not provide basis for liability under RICO (18 USCS §§ 1961 et seq.). Berg v First American Bankshares, Inc.
(1986, App DC) 254 US App DC 198, 796 F2d 489, CCH Fed Secur L Rep P 92833.
Plaintiffs adequately alleged predicate offense involving securities fraud where they stated claim for conspiracy
with and aiding and abetting dealer in government securities in its securities fraud violations, since phrase, "any offense
involving" in definition of "racketeering activity" under 18 USCS § 1961 has been held to be broad enough to include as
predicate act of racketeering conspiracy to commit offenses enumerated in § 1961 and "aiding and abetting" such offenses, including securities fraud. First Federal Sav. & Loan Asso. v Oppenheim, Appel, Dixon & Co. (1986, SD NY)
629 F Supp 427, CCH Fed Secur L Rep P 92505.
Complaint fails to allege predicate acts of fraud with required particularity where decedent's estate alleged that other shareholders used mails and telephone in connection with scheme to defraud decedent, because estate failed to allege
what misrepresentations were made, what was concealed, or any other circumstance surrounding alleged fraud, and thus
court could not determine that claim is stated. Estate of Dearing v Dearing (1986, SD W Va) 646 F Supp 903, CCH
Fed Secur L Rep P 93128.
No RICO claim is stated where alleged predicate acts of securities, wire, and mail fraud were alleged in conclusory
fashion and did not specify which defendants used mail or wire services, what was transmitted, when transmitted, or to
whom sent, and thus predicate acts of fraud are not stated with requisite particularity. Andreo v Friedlander, Gaines,
Cohen, Rosenthal & Rosenberg (1986, DC Conn) 651 F Supp 877, CCH Fed Secur L Rep P 93214.
Mail fraud, wire fraud, and RICO claims of professional football team's nonvoting stockholders must fail, where
court has already determined immateriality of omissions from proxy statement, and alleged misleading statements made
to one stockholder are unsupported since that stockholder did not testify at trial, because no materially misleading
statements or omissions have been shown upon which to base finding of liability under 18 USCS §§ 1341 or §§ 1343,
and circumstances surrounding one corporate merger here could not constitute "pattern" of racketeering activity within
meaning of 18 USCS § 1961(5). Pavlidis v New England Patriots Football Club, Inc. (1986, DC Mass) 675 F Supp
688, CCH Fed Secur L Rep P 93807.
Plaintiff's amended complaint alleges "related but distinct" schemes to satisfy RICO pattern of racketeering activity, where (1) allegations regarding sales of debentures, including "cover-up" in proxy solicitations and underlying allegations of mail, wire and securities fraud, may be classified as single scheme, and (2) allegations regarding sales of automatic teller machines, fees from Canadian corporation, public offering of stock, and market manipulation of common
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stock point to 4 separate schemes. Komm v McFliker (1987, WD Mo) 662 F Supp 924, 2 BNA IER Cas 467 (criticized
in Faust v Ryder Commer. Leasing & Servs. (1997, Mo App) 954 SW2d 383, 13 BNA IER Cas 226).
Investor adequately alleges predicate acts of racketeering activity, where he states that insurance company, insurance broker and insurance consultants intentionally used or foresaw use of mails in furtherance of scheme to induce
investors, with promises of insurance coverage, to put money and metals into precious metal marketer's "Buy Back,
Redelivery, Rebate Program," because statements allege mail fraud and securities fraud violations. Connors v Lexington Ins. Co. (1987, ED NY) 666 F Supp 434, CCH Fed Secur L Rep P 93384.
Investors' complaint against insurance company is dismissed to extent it attempts to plead securities fraud "aider
and abetter" liability under 15 USCS § 78j(b) and, consequently, RICO claim under 18 USCS § 1962, where complaint
alleges insurance company provided surety bond that enabled partnership to obtain financing in order to set up allegedly
fraudulent tax shelter program but alleges no other specific facts to buttress investors' conclusion that company was
aware and knew of partnership's intended illegalities, because liberal use of catchwords and tracking of statutory language is not sufficient Rule 9(b) pleading of fraud as basis for § 78j(b) liability for substantial assistance in achieving
securities fraud violation, nor is it sufficient Rule 9(b) pleading of wire, mail or securities fraud as racketeering activity
predicate for RICO violation. Harrison v Enventure Capital Group (1987, WD NY) 666 F Supp 473, CCH Fed Secur L
Rep P 93753.
Securities fraud claims and RICO claim predicated thereon are dismissed, where plaintiff purchased yacht and entered into agreement whereby seller would harbor, charter, and maintain yacht for fee, because investment in yacht and
management agreement fails to exhibit horizontal commonality required to meet common enterprise prong of test for 15
USCS §§ 77b or 78c investment contract "security," therefore investment is not covered by securities laws and there is
no "racketeering activity" on which to base RICO claim under 18 USCS § 1962. Deckebach v La Vida Charters, Inc.
(1987, SD Ohio) 666 F Supp 1049, CCH Fed Secur L Rep P 93387, affd (1989, CA6 Ohio) 867 F2d 278, CCH Fed
Secur L Rep P 94182.
Dismissal of counts of securities fraud in plaintiffs' RICO action under 18 USCS § 1962(b)-(d) arising from broker's
management of discretionary commodity futures trading accounts results in dismissal of RICO claim where there are no
predicate acts upon which to base RICO count. Poindexter v Merrill Lynch, Pierce, Fenner & Smith (1988, ED Mich)
684 F Supp 478, CCH Fed Secur L Rep P 93902.
Under Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq., "in connection" requirement of 18 USCS § 1961(1)(D) for securities fraud is extremely broad and only requires proof of fraudulent
scheme in which securities transactions and breaches of fiduciary duty coincide; therefore, where investor sued accounting firm under RICO, claims were barred by Private Securities Litigation Reform Act of 1995 (PSLRA), 18 USCS
§ 1964(c), because investor alleged single fraudulent scheme that included firm's tax preparation advice as well as securities investments and related transactions, and because tax preparation advice was made in connection with securities
investments and could not be separated for purposes of PSLRA bar. Jacoboni v KPMG LLP (2004, MD Fla) 314 F Supp
2d 1172, accepted, in part, rejected, in part, motion gr, objection sustained, in part (2004, MD Fla) 314 F Supp 2d 1172,
CCH Fed Secur L Rep P 92709, 17 FLW Fed D 617.
126. Tax fraud
State revenue department's RICO claims against alleged retail tax cheater may proceed after proper amendment,
where gasoline retailer is accused of filing fraudulent tax returns, because tax fraud is indictable offense under mail
fraud statute and thus is adequate allegation of 18 USCS § 1961(1) "racketeering activity." Illinois ex rel. Hartigan v
Flisk (1988, ND Ill) 702 F Supp 189.
127. Other
Sanctions under RICO (18 USCS §§ 1961 et seq.) were not intended to extend to fraudulent commercial transactions affecting interstate commerce. Delta Truck & Tractor, Inc. v J.I. Case Co. (1988, CA5 La) 855 F2d 241, cert den
(1989) 489 US 1079, 103 L Ed 2d 836, 109 S Ct 1531.
Bank investor's failure to inform plaintiff, potential purchaser of land, that real estate appraisal was needed for purchase of land, resulting in failure of real estate option transaction, may have been in breach of state law in aid of RICO
enterprise, but such breach does not transform act into RICO predicate act. Marriott Bros. v Gage (1990, CA5 Tex)
911 F2d 1105, reh den (1990, CA5) 1990 US App LEXIS 18746 and (criticized in Wagh v Metris Direct, Inc. (2003,
CA9 Cal) 363 F3d 821, 2003 CDOS 9693).
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License to do business as hazardous waste contractor obtained by RICO enterprise cannot be considered property
acquired by fraud for purpose of RICO conspiracy. United States v Paccione (1991, CA2 NY) 949 F2d 1183, 34 Fed
Rules Evid Serv 621, cert den (1992) 505 US 1220, 120 L Ed 2d 900, 112 S Ct 3029.
Fraud in settlement agreement constitutes predicate act for purpose of alleging substantive RICO violation; clause
in agreement providing sole remedial procedures for "inaccuracies" in agreement does not apply where plaintiff is
seeking remedy for fraudulent inducement to sign agreement. Turkish v Kasenetz (1994, CA2 NY) 27 F3d 23, RICO Bus
Disp Guide (CCH) P 8582.
Alleged predicate act, settlement agreement between bank and borrowers arranging payments on defaulted loan,
portions of which were credited to loan securing other, foreclosed property owned by borrowers, was nothing more than
"hardball financing" and did not rise to level of fraud. Wisdom v First Midwest Bank (1999, CA8 Mo) 167 F3d 402,
RICO Bus Disp Guide (CCH) P 9648, reh, en banc, den (1999, CA8) 1999 US App LEXIS 3590.
Although keeping purchaser asset and income-free while wife and her business prospered prevented seller from
collecting valid obligations that were owed by purchaser, scheme did not defraud banks that did business with wife and
her business and, thus, there was no bank fraud; without bank fraud there was no predicate act for purposes of Racketeer
Influenced and Corrupt Organizations Act, 18 USCS § 1961 et seq., and those claims were properly dismissed. Bressner
v Ambroziak (2004, CA7 Ill) 379 F3d 478.
Class action suit by legal workers of Georgia rug manufacturer adequately stated state law RICO claim under
O.C.G.A. § 16-14-4(a) because, under 18 USCS § 1961(1)(F), term "racketeering activity" included manufacturer's
widespread pattern of fraud under 18 USCS § 1546, i.e., misuse of visas, permits, and other documents to hire illegal
aliens in order to depress hourly wages of its workers. Williams v Mohawk Indus. (2006, CA11 Ga) 465 F3d 1277, 180
BNA LRRM 2710, 153 CCH LC P 10735, 19 FLW Fed C 1078.
Application of 18 USCS § 1962 to common law business fraud permitting treble damages is within intended scope
of statute. B.F. Hirsch, Inc. v Enright Refining Co. (1983, DC NJ) 577 F Supp 339, 38 UCCRS 444, affd in part and
vacated in part on other grounds (1984, CA3 NJ) 751 F2d 628.
Taken as whole, allegations that defendant offering memoranda misrepresented that partnerships had obtained
leasehold rights to coal properties in time to qualify for favorable tax treatment and misrepresented extent of coal deposits to be mined by partnerships, and other omissions and misstatements including misappropriation of funds by one
defendant and felony conviction of another defendant plead circumstances constituting fraud with sufficient particularity to satisfy Federal Rules of Civil Procedure 9(b). Morley v Cohen (1985, DC Md) 610 F Supp 798, CCH Fed Secur
L Rep P 92277.
Pro se litigant who filed suit against multiple defendants alleging improprieties in foreclosure sale and enforcement
of tax liens on piece of real property does not allege fraud, type of injury and pattern to invoke 18 USCS §§ 1961, 1962,
and 1964. Elmore v McCammon (1986, SD Tex) 640 F Supp 905, 86-2 USTC P 9668, 58 AFTR 2d 5520.
Publisher's RICO claim must be dismissed for failure to allege pattern of racketeering activity, where allegations
were that competing publication, over period of several years, printed fraudulent statements concerning its circulation
and dominance of physical therapy news market, because complaint merely alleges one continuous act of exaggeration
or puffing which does not rise to level of serious crime RICO act was designed to eliminate. Forum Publications, Inc.
v P.T. Publishers, Inc. (1988, ED Pa) 700 F Supp 236.
Ousted shareholder of family companies fails to state RICO claim against brother and sister who summarily prevented him from performing his duties as corporate officer and then created new companies and merged them with old
companies to buy out shareholder by force, where shareholder alleges siblings' scheme comprised acts of mail and securities fraud and other illegal acts, because other illegal acts alleged amount at best to state law civil wrongs, acts of mail
and securities fraud are questionably pled and do not fulfill pattern requirement, and alleged actions of brother and sister
cannot amount to racketeering activity within meaning of 18 USCS § 1961. Ferdinand Drexel Inv. Co. v Alibert (1989,
ED Pa) 723 F Supp 313, CCH Fed Secur L Rep P 94942, affd without op (1990, CA3 Pa) 904 F2d 694, cert den (1990)
498 US 856, 112 L Ed 2d 120, 111 S Ct 154.
Civil racketeering claim is not stated under 18 USCS § 1961(1), where complaint alleges that (1) real estate purchasers fraudulently represented that they had received loan commitment and thus convinced vendor to compromise its
purchase money mortgage rights and (2) scheme lasted for 8 months, because finite scheme does not satisfy "continuity" requirement of "racketeering" element. Ruby Dev. Corp. v Charrim Dev. Corp. (1990, ED NY) 742 F Supp 1213.
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Alleged violations of Lanham Act (15 USCS §§ 1051 et seq.) and Federal Trade Commission Act (15 USCS §§ 41
et seq.) cannot satisfy requirements for allegations of RICO predicate acts, since those statutes are not among those
listed under 18 USCS § 1961(1). Katzman v Victoria's Secret Catalogue (1996, SD NY) 167 FRD 649, RICO Bus Disp
Guide (CCH) P 9073, reh den (1996, SD NY) 939 F Supp 274 and affd (1997, CA2 NY) 113 F3d 1229, reported in full
(1997, CA2 NY) RICO Bus Disp Guide (CCH) P 9313.
Operator of aviation business failed to state claim against town, its airport commission, and other defendants for violation of Racketeer Influenced and Corrupt Organizations Act (RICO), as operator's fraud claims did not constitute
racketeering activity as defined in 18 USCS § 1961(1); claims that defendants made false claims to government did not
satisfy § 1961(1) definition. Barry Aviation, Inc. v Land O'Lakes Mun. Airport Comm'n (2003, WD Wis) 219 FRD 457,
revd, remanded (2004, CA7 Wis) 377 F3d 682.
N.Y. Penal Law §§ 190.65(1)(a), 155.40, 175.35, 190.26 do not constitute predicate act for purposes of civil liability under 18 USCS § 1961(A)(1). Wood v Inc. Vill. of Patchogue (2004, ED NY) 311 F Supp 2d 344.
City and its employees and officials were awarded summary judgment on RICO claims brought by secretary of
city's public safety civil service commission, as tort allegations arising from investigation into secretary's handling of
hostile work environment complaints did not constitute predicate acts under 18 USCS § 1961(1). Harris v City of Seattle
(2004, WD Wash) 315 F Supp 2d 1112.
"Fraudulent transfers," as defined by Uniform Fraudulent Transfer Act, are not criminal offenses identified as
"racketeering activity" in 18 USCS § 1961(1). Webster Indus. v Northwood Doors, Inc. (2004, ND Iowa) 320 F Supp 2d
821.
Assuming that victim of alleged sexual abuse by priest was able to state claim under Racketeer Influenced and
Corrupt Organizations Act (RICO), 18 USCS §§ 1961-6818, claim still would have failed because there was no causal
connection between predicate act and any alleged injury; allegations best set forth malicious prosecution claim--arising
from dismissal of charges of extortion filed by priest, after settlement had been reached but never paid, against victim
that were later dismissed--and victim's loss of schooling and other opportunities flowed from that non-RICO conduct
supporting malicious prosecution claim, and not from mail fraud. Hall v Tressic (2005, ND NY) 381 F Supp 2d 101.
Neither of alleged predicate acts alleged (mail fraud and scheming to defraud) amounted to properly pleaded violation of 18 USCS § 1962; while "scheming to defraud" was element of cause of action for mail fraud, it was not among
state law acts that fell within definition of "racketeering activity" in 18 USCS § 1961(1)(A), and plaintiffs were unable
to demonstrate that defendant's mailing of fraudulent invoices was proximate cause of their alleged injuries (damages
claimed by plaintiffs arose from defendant's alleged negligence in handling their litigation). Kirk v Heppt (2006, SD NY)
423 F Supp 2d 147.
In RICO action by foreign government against companies that dumped coal ash in foreign country, two predicate
acts--violations of Foreign Corrupt Practices Act and Travel Act--alleged by foreign government were not considered
predicate acts. Dominican Republic v AES Corp. (2006, ED Va) 466 F Supp 2d 680.
In government's prosecution of 25 codefendants in connection with ongoing criminal gambling enterprise that existed from 1964 until 2004, offense of conspiracy to money launder under 18 USCS § 1956(h) was predicate act under
18 USCS § 1961(1) and was properly charged as such under 18 USCS § 1962(d) enterprise conspiracy. United States v
Battle (2006, SD Fla) 473 F Supp 2d 1185, 20 FLW Fed D 395, motion den sub nom United States v Nunez (2006, SD
Fla) 2006 US Dist LEXIS 86077.
Medical device manufacturer and medical clinic were entitled to Fed. R. Civ. P. 12(b)(6) dismissal of consumer/patient's action arising from alleged nationwide conspiracy for purpose of monopolizing sale and controlling prices of
medical equipment; alleged antitrust violations were not predicate acts under 18 USCS §§ 1961-1968. Roberson v Medtronic, Inc. (2007, WD Tenn) 494 F Supp 2d 864.
Unpublished Opinions
Unpublished: Although former employee showed that but for alleged witness tampering, which resulted in his arrest, revocation of his parole, and his re-incarceration, he would not have lost his job, employee's civil Racketeer Influenced and Corrupt Organizations claim under 18 USCS § 1964(c) against union attorney, employee's parole officer, and
union's recording secretary failed because employee did not show that alleged 18 USCS § 1512 violations proximately
caused his termination; employee was terminated by his employer because he failed to show up for work, not because
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18 USCS § 1961
named defendant committed predicate act by illegally influencing someone in attorney's chain of command at employer
to fire him; thus, employee failed to show that he was injured by "racketeering activity" under 18 USCS § 1962(c)-(d) as
defined in 18 USCS § 1961(1). Breslin v Brainard (2005, CA3 Pa) 128 Fed Appx 237.
Unpublished: Allegations that defendants schemed to, and did, remove president of insurance cooperative from his
post so they could convert cooperative into stock corporation so bank could buy corporation, allegedly for defendants'
benefit, failed to establish that defendants committed any predicate--criminally-punishable--acts necessary for claim
under Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq; further, where nothing in
record indicated president was anything other than at-will employee removeable under N.Y. Bus. Corp. Law § 716(a),
RICO claim failed because there was no injury to business or property. Lerwick v Kelsey (2005, CA2 NY) 150 Fed Appx
62.
Unpublished: Other than robbery in 2004, owner did not specify which of city and its officials many alleged offenses qualified as predicate acts under Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS §§ 1961
et seq. Simply listing litany of offenses allegedly committed by city and its officials, without any specification as to
which acts qualified as 18 USCS § 1961 predicate acts and also occurred within time frame required to satisfy 18 USCS
§ 1961(5), was insufficient to state RICO claim; therefore, RICO claims were properly dismissed. Dalton v City of Las
Vegas (2008, CA10 NM) 2008 US App LEXIS 12522.