Section 1962 - Prohibited activities

59 Analyses of this statute by attorneys

  1. Examining the Intersection of RICO Claims and the SCA: A Case Study

    Whitcomb Selinsky, PCJoe WhitcombJanuary 3, 2024

    inistrator upheld his decision. Subsequently, some defendants appealed the Administrator's ruling to the Deputy Secretary of Labor. While the Deputy Secretary ruled against the contractors in one contract, he kept the matters at issue for the other contracts.Administrative review also took place for two service contracts, namely T–2 and T–34/44. During this review, Dyncorp submitted performance requests that proposed rates for classifications not included in the wage determinations. The Administrator increased wage rates for several classifications and directed Dyncorp to apply the adjusted rates. Dissatisfied with the Administrator's determination, Dyncorp petitioned the Board of Service Contract Appeals for a review of the decision. The Navy intervened in the appeal, opposing the Administrator's proposed rates.Claims for Relief in Service Contracts CaseOn November 17, 1989, the appellants initiated an action consisting of five counts. The first four counts are based on a claim under 18 U.S.C. § 1962, a part of the Racketeer Influenced and Corrupt Organizations (RICO) Act that targets organized crime and racketeering activities. This law prohibits actions commonly associated with criminal organizations, such as fraud, bribery, and illegal schemes carried out by individuals or groups within these organizations.The appellants sought damages equivalent to three times the amount of backpay wages and benefits payable by the defendants as a result of decisions made by the Department of Labor. These counts allege mail and wire fraud, claiming that contracts were entered into with improper classifications and the use of the postal service to facilitate these contracts.Count V of the action presents a common law claim for "fraud and deceit," seeking damages equal to the disparity between the wages and fringe benefits paid and what the plaintiffs would have received if the Wage Determinations incorporated in the contract were disclosed.The defendants responded by filing a motion to dismiss

  2. Yegiazaryan v. Smagin: RICO Becomes a Tool for Foreign Plaintiffs to Collect on Arbitration Awards in the U.S.

    Shearman & Sterling LLPAugust 4, 2023

    the possibility of treble damages and recovery of litigation costs.Foreign plaintiffs may be able to increase their odds of having a “domestic injury” by confirming the relevant arbitration award in the United States and receiving a US judgment. However, other factors will also impact the inquiry, such as where the racketeering activity was directed from and targeted at, as well as the location of the defendant. Ultimately, whether there is a “domestic injury” for purposes of RICO will need to be analyzed on a case-by-case basis.Footnotes[1] Yegiazaryan v. Smagin, 599 U. S. ____, *14 (2023). [2] Smagin v. Yegiazaryan, No. 2:14-CV-09764, (C.D. Cal. Feb 04, 2015) (order granting stay of proceedings and preliminary injunction). [3] Smagin v. Yegiazaryan, 37 F.4th 562, 565 (9th Cir. 2022), cert. granted, 143 S. Ct. 645 (2023), and cert. granted sub nom. CMB Monaco v. Smagin, 214 L. Ed. 2d 382, 143 S. Ct. 646 (2023), and aff'd and remanded, 599 U. S. ____ (2023). [4] 18 U.S.C. §1964(c)[5] 18 U.S.C. §1962(c). [6] 18 U.S.C. §1962(d). [7] 18 U.S.C. § 1964(c). [8] RJR Nabisco, Inc. v. European Community, 579 U.S. 325, 346 (2016). [9] Id. at 354. [10] Humphrey v. GlaxoSmithKline PLC, 905 F.3d 694, 701, 707 (3d Cir. 2018). [11] Bascunan v. Elsaca, 927 F.3d 108, 119 (2d Cir. 2019); see also Bascunan v. Elsaca, 874 F.3d 806 (2d Cir. 2017). [12] Armada (Singapore) PTE Ltd. v. Amcol Int'l Corp., 885 F.3d 1090, 1093–95 (7th Cir. 2018), abrogated by Yegiazaryan v. Smagin, 599 U. S. ____ (2023). [13] Smagin v. Compagnie Monegasque De Banque, No. 220CV11236RGKPLA, 2021 WL 2124254, *4 (C.D. Cal. 2021), rev'd and remanded sub nom. Smagin v. Yegiazaryan, 37 F.4th 562 (9th Cir. 2022), cert. granted, 143 S. Ct. 645 (2023), and cert. granted sub nom. CMB Monaco v. Smagin, 214 L. Ed. 2d 382, 143 S. Ct. 646 (2023), and aff'd and remanded, 599 U. S. ____ (2023). [14] Smagin v. Yegiazaryan, 37 F.4th 562, 567 (9th Cir. 2022), aff'd and remanded, 599 U. S. ____ (2023). [15] Id. at 568. [16] Id. at 570 (emphasis a

  3. RICO class actions: D. Conn. rules that legal entity must have or share a common fraudulent purpose to qualify as a RICO enterprise

    Kilpatrick Townsend & Stockton LLPJames Bogan IIIMay 30, 2023

    The named plaintiffs in Negron were at one time insured under employee health insurance plans administered by Cigna Health and Life Insurance Company (“Cigna”). Seeking to represent themselves and putative classes, they alleged that Cigna overcharged them for prescription drugs, and that it carried out this scheme through its contracts with separately-incorporated pharmacy benefits managers (“PBMs”), which functioned as intermediaries between Cigna and a designated network of retail pharmacies.They asserted a federal RICO claim against Cigna under 18 U.S.C. § 1962(c), which requires proof that a RICO defendant (1) conducted (2) an enterprise (3) through a pattern (4) of racketeering activity. They further asserted that Cigna conducted two RICO enterprises, consisting of two of these separate PBMs. But the plaintiffs did not claim that the PBMs participated in or even knew about the alleged illegal activity. Instead, they asserted that the PBMs were “unwitting accomplices” to the RICO scheme. Negron, 2023 WL 2639610, at *3.Cigna moved for summary judgment on the Section 1962(c) claim. Even though the district court had denied a prior motion to dismiss the RICO claim, it granted the motion for summary judgment. In doing so, the district court examined rulings from other jurisdictions concerning the requirements for proving a “legal entity” (as opposed to an association-in-fact) RICO enterprise. Some courts require that the legal entity share a common fraudulent purpose. Some simply analyze whether the legal entity has a common purpose with the RICO

  4. A RICO Claim in an Ordinary Business Dispute? Not So Fast, Says the Commercial Division

    Farrell Fritz, P.C.Viktoriya LiberchukJune 7, 2022

    But RICO has a civil component as well that provides plaintiffs with a private right of action to sue for injuries to their business or property. To establish a civil RICO claim, a plaintiff must show “(1) a violation of the RICO statute, 18 USC § 1962; (2) an injury to business or property; and (3) that the injury was caused by the violation of Section 1962” (Daskal v Tyrnauer,, 961 NYS2d 357 [Sup Ct, Kings County 2012], aff’d,123 AD3d 652, 998 NYS2d 412 [2d Dept 2014]).Among other activities prohibited by RICO, Section 1962(c) prohibits a person from conducting the affairs of an enterprise through a pattern of racketeering.

  5. Federal racketeering conviction counts as prior drug offense under § 961.41(3g)(c)

    Wisconsin State Public DefenderMay 1, 2014

    But the state alleged–and the trial court found–Guarnero was a second or subsequent drug offender, which enhanced the offense to a Class I felony. (¶¶1, 4). A defendant is a second or subsequent offender under § 961.41(3g)(c) if, at any time prior to being convicted in the present case, he was “convicted of any felony or misdemeanor under this chapter orunder any statute of the United Statesor of any staterelating to controlled substances, …” The prior conviction used to enhance Guarnero’s penalty was his conviction in a federal RICO prosecution, where he and 48 others were charged with being members and associates of the Latin Kings. According to the count in the indictment to which Guarnero pleaded guilty, the defendants conspired to violate 18 U.S.C. § 1962(c) by conducting and participating in an enterprise that included engaged in acts of violence, including murder, attempted murder, robbery, extortion, and distribution of controlled substances. (¶2).Guarnero argues RICO is not a “statute … relating to controlled substances” and so can’t be used to enhance his sentence.

  6. RICO: A Primer

    Freeman LawJanuary 19, 2022

    tion of Section 1962(c), a plaintiff must prove the following elements:Existence of an enterprise;The enterprise engaged in, or its activities affected, interstate or foreign commerce;The defendant was employed by or was associated with the enterprise;The defendant conducted or participated, either directly or indirectly, in the conduct of the affairs of the enterprise; andThe defendant participated in the affairs of the enterprise through a pattern of racketeering activity or collection of unlawful debt.Section 1962(d)Under Section 1962(d), it is a violation to conspire to commit any of the three substantive RICO offenses.To prove a violation of Section 1962(d), a plaintiff must prove the following elements:The existence of an enterprise (or that an enterprise would exist);That the enterprise was (or would be) engaged in, or its activities affected (or would affect), interstate or foreign commerce; andThat each defendant knowingly agreed that a conspirator would commit a violation of 18 U.S.C. § 1962(c).The Supreme Court held that to establish a RICO conspiracy offense under Section 1962(d), there is no requirement that the defendant “himself committed or agreed to commit the two predicate acts requisite for a substantive RICO offense under § 1962(c).” The Supreme Court explained:A conspiracy may exist even if a conspirator does not agree to commit or facilitate each and every part of the substantive offense.

  7. Case Watch Update: A Deeper Dive into Crimson Galeria Limited Partnership v. Healthy Pharms, Inc.

    Burns & Levinson LLPGregory PaonessaSeptember 27, 2018

    Century Bank provides banking services to Healthy Pharms and, according to the Plaintiffs, does so “knowing that [Healthy Pharms] intends to operate a marijuana business.” Plaintiffs bring one count against Century Bank for alleged violation of 18 U.S.C. § 1962(d), which makes it “unlawful for any person to conspire to violate any of the [substantive RICO provisions].” As explained in the prior post, the court left ultimate resolution of the pending motions to dismiss open-ended, granting 30 days’ leave to allow the Plaintiffs to file an amended complaint, based on the fact that Healthy Pharms opened and began operating after Plaintiffs’ original complaint was filed.

  8. E.D. Texas rules that fraudulent overcharge theory supplies standing for civil RICO class action

    Kilpatrick Townsend & Stockton LLPJames Bogan IIIFebruary 28, 2020

    Accepting the plaintiffs’ allegations as true, the district court ruled that the Earl plaintiffs’ overcharge theory constituted an economic injury satisfying Article III’s injury-in-fact requirement. Accordingly, the district court ruled that the Earl plaintiffs could proceed on their federal RICO claims under 18 U.S.C. § 1962(c) (conducting or participating in the conduct of a RICO enterprise’s affairs through a pattern of racketeering activity) and 18 U.S.C. § 1962(d) (RICO conspiracy). Earl, 2019 WL 759385, at *10.

  9. Notes from RICO Class Action Wars Against Pharmaceutical Companies

    Kilpatrick Townsend & Stockton LLPMarch 7, 2019

    It identified 23 defendants and sorted them into 7 different groups. As for the civil RICO claims, the complaint alleged a claim under 18 U.S.C. § 1962(c), as well as a claim for RICO conspiracy under 18 U.S.C. § 1962(d). The defendants moved to dismiss, including for lack of standing and for failure to state a claim.

  10. Eleventh Circuit Holds That a Corporation Is Not Distinct From Its Agents For Purposes of a RICO Enterprise, Following Sister Circuits

    Sheppard, Mullin, Richter & Hampton LLPJeff KernSeptember 16, 2016

    RICO makes it “unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt.” 18 U.S.C. § 1962(c). The complaint contained the general assertion that plaintiffs “were harmed in that they relied to their detriment on Spirit’s conduct and, as a result, needlessly incurred excessive and unconscionable [Passenger Usage Fees].”