United States District Court for the Southern District of New York · 2000-09-14
Case and law context
Role: applied; posture: civil; lenders sue borrowers, title agent, title insurer and attorney; defendants' 12(b)(6) motions to dismiss the two RICO counts (119, 120) granted with prejudice; 118 state-law claims dismissed without prejudice; result: claimant-lost; claim: (a),(c),(d)
Instances and excluded annotation blocks
| Case | Element | Holding and scope | Variant | Exact source quotations |
|---|---|---|---|---|
| /f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000 | Defendant employed by or associated with the enterprise (§ 1962(c)) | not_reached Excluded from merits counts applied / merits claim: (a),(c),(d) | Unspecified variant | No source quotation recorded for this block. |
| /f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000 | But-for and proximate causation ("by reason of", 18 U.S.C. § 1964(c)) | not Counted merits instance applied / merits basis: pleaded; claim: (a),(c),(d); count: § 1962(a) claim; subject: count=§ 1962(a) claim Under (a) the "by reason of" injury must come from the use/investment of racketeering income, not from the predicate acts themselves (Ouaknine, 2d Cir.). | investment-injury-rule/injury-flows-from-predicate-acts-not-investment | Elsewhere, they make it quite clear that the injury they have allegedly suffered — the supposed non-collectability of their various mortgages and loans — resulted, not from the investment of any money in a RICO enterprise, but rather because of the various predicate actsSource: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [17649:17920] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.they fail to state a cause of action under 18 USC § 1962(a). Thus, Plaintiffs’ RICO claims must be dismissed.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [21640:21749] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139. |
| /f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000 | Conduct or participate in the conduct of enterprise affairs (§ 1962(c) operation or management test) | satisfied Counted merits instance applied / merits basis: pleaded; claim: (a),(c),(d); party: Michael Sichenzia, Lisa Sichenzia, Patrick Cottrell (the borrowers); subject: party=Michael Sichenzia, Lisa Sichenzia, Patrick Cottrell (the borrowers) Satisfied only on this element; the (c) claim against them still fails on enterprise, injury and predicate acts. The court states no supporting facts beyond the general narrative. | operation-or-management/principals-of-scheme | Liability under § 1962(c) requires a showing that each defendant employed by or associated with the enterprise “conduct or participate, directly or indirectly, in the conduct of [the] enterprise’s affairs”.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [29389:29595] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.Reading the allegations of the complaint most generously to the Plaintiffs, there are allegations sufficient to charge Michael and Lisa Sichenzia and Patrick Cottrell with leading, running, managing or directing any of the alleged enterprise.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [32388:32630] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139. |
| /f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000 | Conduct or participate in the conduct of enterprise affairs (§ 1962(c) operation or management test) | not Counted merits instance applied / merits basis: pleaded; claim: (a),(c),(d); party: Betty Grahn and Denise Grahn (relatives of a borrower); subject: party=Betty Grahn and Denise Grahn (relatives of a borrower) | operation-or-management/peripheral-relatives-notary-and-later-purchaser | The only allegations against Betty and Denise Grahn are that Betty Grahn purchased two of the parcels several months after the Plaintiffs made the loans, and that Denise Grahn notarized the signatures of other defendants.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [33056:33277] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.But there is no allegation that the other Defendants were leaders or managers of the enterprise.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [32631:32727] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139. |
| /f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000 | Conduct or participate in the conduct of enterprise affairs (§ 1962(c) operation or management test) | not Counted merits instance applied / merits basis: pleaded; claim: (a),(c),(d); party: title agent (Artesian defendants), title insurer (Old Republic), attorney (DeEsso); subject: party=title agent (Artesian defendants), title insurer (Old Republic), attorney (DeEsso) Reves: providing services that help the scheme (title work, recording, legal opinions) is not directing the enterprise's affairs. | operation-or-management/outside-service-providers | The specific allegations of the complaint identify what they did as, in essence, failing to record mortgages and other instruments affecting the loans made by Plaintiffs, wrongfully issuing priority of title insurance, offering false documents for filing, and engaging in various acts of negligence and breach of duty.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [34115:34433] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.He represented various of the Sichenzia defendants and/or Artesian (it is not clear which, or whether the client differed in different deals) in connection with some of the loan transactions at issue.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [5809:6009] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.In addition, the mere fact that a defendant may have aided in the alleged scheme to defraud, even if that aid was intentional, does not give rise to liability under § 1962(c).Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [31621:31796] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.None of those pages and pages of contentions remotely suggests how this transformed the non-Sichenzia Defendants into leaders, managers or directors of the enterprise of which they are not even alleged to be membersSource: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [34434:34649] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139. |
| /f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000 | Conduct or participate in the conduct of enterprise affairs (§ 1962(c) operation or management test) | not Counted merits instance applied / merits basis: pleaded; claim: (a),(c),(d); party: the corporate/LLC defendants owned by the borrowers; subject: party=the corporate/LLC defendants owned by the borrowers | operation-or-management/shell-entities-of-principals | all of which are entities that were or are owned by the Sichenzias and/or Mr. Cottrell.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [4095:4182] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.The business entities named by the Plaintiffs in their § 1962(c) claim, as opposed to the individual defendants, cannot possibly “lead, run, manage or direct” the affairs of the alleged enterprise, or, for that matter, act “intentionally” at all, since corporations can act only through their individual officers, directors or agents (who are not explicitly identified).Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [33448:33818] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139. |
| /f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000 | Conspiracy to violate § 1962(a), (b), or (c) (§ 1962(d)) | not Counted merits instance applied / merits basis: pleaded; claim: (a),(c),(d); count: § 1962(d) claim (Claim 120); theory: derivative of the dismissed (a) and (c) claims; subject: count=§ 1962(d) claim (Claim 120); theory=derivative of the dismissed (a) and (c) claims | derivative-of-substantive-claim/substantive-counts-deficient | Plaintiffs’ substantive claims under 18 U.S.C.1962(a) and (c) fail to state a cause of action, and have been dismissed. As a result, Plaintiffs’ claim under section 1962(d) sounding in conspiracy to violate sections 1962(a) and (c) must also be dismissed.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [44002:44257] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.Therefore, the purported Section 1962(d) claim (Claim 120) also must fail as a matter of law.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [44779:44872] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139. |
| /f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000 | Conspiracy to violate § 1962(a), (b), or (c) (§ 1962(d)) | not Excluded from merits counts applied / alternative basis: pleaded; claim: (a),(c),(d); count: § 1962(d) claim (Claim 120); theory: each defendant's own agreement to commit two predicate acts; subject: count=§ 1962(d) claim (Claim 120); theory=each defendant's own agreement to commit two predicate acts Applies the pre-Salinas Second Circuit rule that each conspirator must personally agree to commit two predicates. | agreement/conclusory-no-facts-of-knowing-agreement | In addition, the Section 1962(d) claim fails as against every defendant because the complaint does not allege that each defendant agreed to commit two or more predicate acts.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [44873:45047] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.Here, Plaintiffs’ Amended Complaint and Civil RICO Statement are devoid of any factual allegation whatsoever to indicate that any of the moving defendants were aware of the alleged scope of the purported enterprise, or that they specifically agreed to further the alleged scheme through the commission or facilitation of any racketeering activity.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [47289:47636] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139. |
| /f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000 | Enterprise (§ 1961(4)): legal entity or association-in-fact | not Counted merits instance applied / merits basis: pleaded; claim: (a),(c),(d); party: alleged enterprise of the three borrowers (later adding the title-agent defendants); count: § 1962(c) claim (Claim 119); subject: party=alleged enterprise of the three borrowers (later adding the title-agent defendants); count=§ 1962(c) claim (Claim 119) "Would the enterprise still exist with the predicate acts removed?" test. Members' separate individual businesses do not count; the group as a whole needs a common link beyond the fraud. Pre-Boyle strictness. | association-in-fact/no-existence-apart-from-fraud-scheme | Plaintiffs originally alleged that Michael Sichenzia, Lisa Sichenzia and Patrick Cott-rell were the only “members” of the enterprise.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [6795:6928] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.In the case at bar, the Plaintiffs unequivocally stated, at section 5(b)(B) of their original Civil RICO Statement, that “[t]he purpose of the enterprise was to obtain monies from the Plaintiffs under false pretenses.”Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [24799:25017] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.There is no allegation in the Amended Complaint or the Civil RICO Statement of what activity, if any, the alleged enterprise ever engaged-in other than the alleged predicate acts.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [25039:25218] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.Additionally, Plaintiffs fail to allege any chain of command of the enterprise, or how, if at all the alleged “members” functioned as an integrated group or directed the affairs of the alleged enterprise apart from the predicate acts themselves.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [25432:25677] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.Further, in a fraud-based RICO claim, if the sole purpose of the alleged enterprise is to perpetrate the alleged fraud, there can be no enterprise for RICO purposes.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [24274:24439] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.The test is whether the predicate acts differed from the usual and daily activities of the enterprise itself.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [26136:26245] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.Plaintiff identifies no purpose of the enterprise except to engage in the racketeering activity, no group (as opposed to individual) activity other than the racketeering activity, and no on-going structure except the conduct of racketeering.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [28099:28340] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.As the Plaintiffs failed to allege the existence of an enterprise that has any existence separate and apart from the purported predicate acts, they fail to state a claim under 18 U.S.C. § 1962(c), and their Claim 119, brought under that provision must be dismissed as a matter of law.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [28846:29130] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139. |
| /f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000 | Civil RICO injury to business or property (18 U.S.C. § 1964(c)) | not Counted merits instance applied / merits basis: pleaded; claim: (a),(c),(d) Fraudulently-induced-loan injury is unripe until foreclosure/guaranty/title-insurance remedies are tried and leave a deficiency (First Nationwide v. Gelt Funding). | not-ripe/secured-lender-has-not-exhausted-collateral-remedies | Plaintiffs admit in their Amended Complaint, as well as their Civil RICO Statement, that each and every loan was secured by a mortgage and note, most of which bind the individual Sichenzia defendants personally.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [10627:10838] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.They also admit that each mortgage was insured through defendants Old Republic and/or Artesian Abstract. However, Plaintiffs have made no effort to enforce those rights prior to instituting this action.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [10839:11041] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.However, nowhere do Plaintiffs allege that they made any effort whatsoever to recover their alleged losses, or even any part of such losses, by seeking to enforce any of their admitted contractual rights.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [14868:15072] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.Because the Plaintiffs have not exhausted the bargained-for remedies, which they admit are available to them, they have not satisfied RICO’s requirement of alleging damages that are clear and definite.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [11255:11456] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.As Plaintiffs cannot allege “clear and definite” damages to their business or property, they lack standing under RICO, and their RICO causes of action must be dismissed.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [16721:16890] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139. |
| /f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000 | Use or investment of racketeering income in an enterprise (§ 1962(a)) | not Counted merits instance applied / merits basis: pleaded; claim: (a),(c),(d); count: § 1962(a) claim; subject: count=§ 1962(a) claim | investment-injury/no-allegation-of-any-investment | Plaintiffs admit, at Section 8(b) of their Amended Civil RICO Statement, that they have no idea whether any alleged income was ever invested by any defendant at all, let alone that it was invested in the alleged enterprise and that they were injured as a result of that investment.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [17367:17648] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.In the instant case, neither Plaintiffs’ Amended Complaint nor their Civil RICO Statement sets forth a single allegation relating to any investment whatsoever made by any Defendant, in the alleged enterprise or anywhere else, much less that the Plaintiffs were damaged or injured as a result of such investment.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [20368:20679] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.Because injury by reason of investment of racketeering income in an enterprise is the very foundation of a § 1962(a) claim, Plaintiffs’ allegations are insufficient as a matter of law.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [18192:18376] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.This sweepingly general allegation that the defendants either “retained” or “disposed of’ any income they received plainly fails to allege the required: (I) investment, (2) of any income, (3) in an enterprise.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [21176:21385] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139. |
| /f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000 | Pattern of racketeering activity (§ 1961(5)): at least two predicate acts with relatedness and continuity | not_reached Excluded from merits counts applied / merits claim: (a),(c),(d) | Unspecified variant | No source quotation recorded for this block. |
| /f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000 | Culpable person (§ 1961(3)) distinct from the enterprise under (c) | not_reached Excluded from merits counts applied / merits claim: (a),(c),(d) | Unspecified variant | No source quotation recorded for this block. |
| /f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000 | Mail or wire fraud predicate (18 U.S.C. §§ 1341, 1343) | not Counted merits instance applied / merits basis: pleaded; claim: (a),(c),(d); party: the borrower (Sichenzia) defendants; count: mail and wire fraud predicates; subject: party=the borrower (Sichenzia) defendants; count=mail and wire fraud predicates State-law rule (NY: no fraud claim for a promise never intended to be kept absent separate duty / collateral misrepresentation / special damages) imported to defeat the federal mail-fraud predicate. | scheme-to-defraud/breach-of-contract-dressed-as-fraud | As against the Sichenzia Defendants, Plaintiffs assert that they were defrauded into entering into contracts (mortgages, loans, etc.) that the counterparty never intended to honor.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [36249:36429] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.The Plaintiffs claim that the mortgages are “false and invalid” because “the Sichenzias and Cottrell closed on the mortgage loans prior to the date they obtained title to the properties”.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [38081:38268] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.It is fundamental that a Plaintiff who contends that the counterparty to a contract never intended to perform the terms of that contract may only prevail in an action for fraud under limited circumstances:Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [35413:35618] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.Plaintiffs fail to identify any legal duty owed to the Plaintiffs by any of the Sichen-zia Defendants that is separate from the duty to perform under the mortgages and notes as required by Cougar.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [37370:37566] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.Without making any legally sufficient allegation of fraud, Plaintiffs cannot allege mail fraud.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [38473:38568] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139. |
| /f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000 | Mail or wire fraud predicate (18 U.S.C. §§ 1341, 1343) | not Counted merits instance applied / merits basis: pleaded; claim: (a),(c),(d); party: the title-agent (Artesian) defendants; subject: party=the title-agent (Artesian) defendants Two failures: Rule 9(b) particularity for the letters; Schmuck "incident to an essential part of the scheme" for transmitted policies (many sent by courier, not mail/wire). | use-of-mails/mailing-not-incident-to-essential-part-of-scheme | Plaintiffs allege, in their complaint and RICO Statement, that Artesian “accomplished” the fraudulent scheme by mailing or faxing copies of one defective mortgage, as well as certain letters and satisfactions of mortgages, to the Plaintiffs.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [39079:39320] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.The allegations concerning the letters can be quickly dismissed, as the contents thereof are not set forth with specificity, nor are any misrepresentations identified with the specificity required by Fed.R.Civ.P. 9(b).Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [39381:39599] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.Plaintiff does not explain how the act of transmission was incidental to an essential part of the alleged fraudulent scheme to withhold and fail to file instruments so as to defeat Plaintiffs’ priority liensSource: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [39765:39972] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139. |
| /f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000 | Civil aiding and abetting a RICO violation (rejected as a private cause of action) | not Counted merits instance applied / merits basis: law; claim: (a),(c),(d); party: relatives, shell entities, title insurer, attorney, and part of the claims against the title agent; theory: aiding and abetting a RICO violation / 18 U.S.C. § 2; subject: party=relatives, shell entities, title insurer, attorney, and part of the claims against the title agent; theory=aiding and abetting a RICO violation / 18 U.S.C. § 2 | secondary-liability/no-private-action-for-aiding-and-abetting-rico | it would appear that the only allegations against (1) the Sichenzia defendants other than Lisa and Michael Sichenzia and Cottrell, (2) Old Republic, (3) DeEsso, and (4) certain allegations against the Artesian defendants are allegations of aiding and abetting.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [41566:41826] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.Courts in this District have long held that there is no private right of action for aiding and abetting a RICO violation.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [41827:41948] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.As this Court does not recognize a private right of action for aiding and abetting a RICO violation, Plaintiffs’ causes of action against the all defendants, insofar as they are based on either “aiding and abetting” or 18 U.S.C. § 2, must be dismissed.Source: docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [43656:43908] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139. |
Court interpretations recorded from this case
interpretation
In addition, the mere fact that a defendant may have aided in the alleged scheme to defraud, even if that aid was intentional, does not give rise to liability under § 1962(c).
/f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000
In addition, the mere fact that a defendant may have aided in the alleged scheme to defraud, even if that aid was intentional, does not give rise to liability under § 1962(c).Source:
docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [31621:31796] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.Reves v. Ernst & Young establishes the "operation or management" test: defendant must have some part in directing the enterprise's affairs (including lower-rung participants acting under upper management's direction, or outsiders exerting control via bribery). Merely furnishing professional services is insufficient.
interpretation
It is fundamental that a Plaintiff who contends that the counterparty to a contract never intended to perform the terms of that contract may only prevail in an action for fraud under limited circumstances:
/f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000
It is fundamental that a Plaintiff who contends that the counterparty to a contract never intended to perform the terms of that contract may only prevail in an action for fraud under limited circumstances:Source:
docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [35413:35618] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.Most common civil RICO predicate; subject to Rule 9(b) particularity and resistance from courts where plaintiffs attempt to dress up an ordinary breach of contract as mail/wire fraud.
interpretation
Because injury by reason of investment of racketeering income in an enterprise is the very foundation of a § 1962(a) claim, Plaintiffs’ allegations are insufficient as a matter of law.
/f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000
Because injury by reason of investment of racketeering income in an enterprise is the very foundation of a § 1962(a) claim, Plaintiffs’ allegations are insufficient as a matter of law.Source:
docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [18192:18376] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.Under § 1962(a), the defendant must have received income from a pattern of racketeering (or unlawful debt collection in which the person participated as a principal under 18 U.S.C. § 2) and used or invested that income in an enterprise; civil § 1962(a) requires "investment injury" distinct from harm caused by the predicate acts themselves.
interpretation
Plaintiffs’ substantive claims under 18 U.S.C.1962(a) and (c) fail to state a cause of action, and have been dismissed. As a result, Plaintiffs’ claim under section 1962(d) sounding in conspiracy to violate sections 1962(a) and (c) must also be dismissed.
/f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000
Plaintiffs’ substantive claims under 18 U.S.C.1962(a) and (c) fail to state a cause of action, and have been dismissed. As a result, Plaintiffs’ claim under section 1962(d) sounding in conspiracy to violate sections 1962(a) and (c) must also be dismissed.Source:
docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [44002:44257] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.Note tension in older or lower-court civil opinions (e.g. Goldfine) that sometimes recite a requirement that each defendant agreed to commit two predicates; Salinas controls in criminal and modern civil cases, though civil § 1962(d) still requires a viable underlying § 1962(a)-(c) violation and an overt act that is itself a RICO predicate under Beck v. Prupis (529 U.S. 494 (2000)).
interpretation
Because the Plaintiffs have not exhausted the bargained-for remedies, which they admit are available to them, they have not satisfied RICO’s requirement of alleging damages that are clear and definite.
/f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000
Because the Plaintiffs have not exhausted the bargained-for remedies, which they admit are available to them, they have not satisfied RICO’s requirement of alleging damages that are clear and definite.Source:
docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [11255:11456] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.Damages must be concrete, clear, and definite (not speculative or unripe pending exhaustion of contractual/collateral remedies), and must be domestic under RJR Nabisco v. European Community (579 U.S. 325 (2016)).
interpretation
Courts in this District have long held that there is no private right of action for aiding and abetting a RICO violation.
/f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000
Courts in this District have long held that there is no private right of action for aiding and abetting a RICO violation.Source:
docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [41827:41948] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.Following Central Bank of Denver (511 U.S. 164 (1994)), most courts hold that 18 U.S.C. § 1964(c) does not authorize private civil aiding-and-abetting liability under § 1962(c) (though criminal aiding and abetting under 18 U.S.C. § 2 applies, and § 1962(a) expressly cross-references 18 U.S.C. § 2).
interpretation
Because injury by reason of investment of racketeering income in an enterprise is the very foundation of a § 1962(a) claim, Plaintiffs’ allegations are insufficient as a matter of law.
/f-supp-2d/118/0392-01 — United States District Court for the Southern District of New York · 2000
Because injury by reason of investment of racketeering income in an enterprise is the very foundation of a § 1962(a) claim, Plaintiffs’ allegations are insufficient as a matter of law.Source:
docroot/ir/caselaw/f_supp_2d_118.jsonl#/f-supp-2d/118/0392-01; Unicode character offsets [18192:18376] (end exclusive); SHA-256 7a6992301d8f07cdcfefb2ba1333ee88e7724e88e90a83145c93f1937232b139.Express statutory safe harbor in § 1962(a) for open-market passive investment purchases totaling <1% of any class of voting/non-voting securities without power to elect a director. Note verbatim typo in statute text ("any pattern or racketeering activity").