Articles Posted in RICO

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Being served with a lawsuit is stressful for any business owner. Being served with a civil Racketeer Influence and Corrupt Organization (RICO) Act lawsuit — with its ominous-sounding title and the risk of possibly owing triple damages(!) — can be eminently more stress-inducing. Before having a panic attack, however, keep in mind that many civil RICO claims are bogus, improperly pled, or both. That doesn’t mean you should not take it seriously; quite the opposite. Rather, it means that, with the help of a knowledgeable Atlanta civil RICO lawyer, you have the possibility of getting that RICO claim dismissed before trial.

There are many very specific pleading requirements that civil RICO imposes, which means you may have multiple areas of attack within your motion to dismiss, as a recent 11th Circuit Court of Appeals RICO case demonstrates.

The plaintiff, in that case, was a Florida-based “assisted living and senior care services company” that ran a website through which service providers would connect with seniors in need of care.

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Non-lawyers often associate the Racketeer Influenced and Corrupt Organizations (RICO) Act with mobsters and gangs. RICO’s reach spans far beyond that, though. The statute allows for civil actions, making a federal RICO claim a potentially powerful weapon in a business dispute. Pleading requirements for federal civil RICO are complex, however, creating many traps for the inexperienced. If you or your company is on the receiving end of one of these weaponized RICO claims, get in touch with a knowledgeable Atlanta civil RICO lawyer, who can review your case, and perhaps dispatch that RICO claim before a trial even begins.

Some years ago, the federal First Circuit Court of Appeals in Boston described civil RICO claims as “the litigation equivalent of a thermonuclear device.” That’s partly because civil RICO claims offer plaintiffs the potential of recovering large sums via the treble (in other words, triple) damages. Sometimes, these claims are a means to an end, such hopefully forcing a defendant to agree to a settlement.

As a pair of recent cases illustrate, there are numerous ways a plaintiff’s federal civil RICO claim can fail. In a Missouri federal court, a bank accused the heirs of a famous 20th Century American painter of violating the RICO law. The judge noted a glaring weakness in the bank’s case, which dealt with the required “pattern of racketeering activity,” according to NPR in Kansas City.

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A recent federal appellate decision could amount to something very important to businesses that may need to pursue, or defendant against, a Racketeer Influenced and Corrupt Organizations (RICO) Act claim. The ruling potentially represents a broadening of what kind of causal linkage is direct enough to meet the causation requirement of a RICO claim, which is important because any broadening of that requirement could make for a boon to those considering pursuing a RICO case. While substantial aspects of RICO law are well-settled, some areas continue to evolve to one degree or another, which is why it always pays to have a truly knowledgeable Atlanta civil RICO lawyer on your side who’s fully up-to-date on all the changes in the law.

The RICO case that spawned the new federal court decision involved the business of high-dollar bankruptcy advice and consulting. After one company (“M”) successfully defeated the other company (“A”) in securing several of these clients, A sued M.

The crux of A’s case was that M was able to beat A for clients, in part, by “knowingly and repeatedly filing disclosure statements in the Bankruptcy Court containing incomplete, misleading, or false representations concerning conflicts of interest” and thereby rigging the process. M also allegedly erected a “pay-to-play” scheme where it arranged meetings between its clients and certain bankruptcy lawyers in exchange for exclusive referrals from those attorneys.

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If you follow enough civil RICO cases, you’ll notice that many plaintiffs’ RICO claims lack merit, sometimes obviously so. Of course, even when the RICO claim that a plaintiff has aimed at your business is one of those claims long on bluster and short on merit, they are still potentially harmful to you and your business. It is vital to take the case seriously and get that claim thrown out as soon as possible to minimize the damage it can do to you. To get that done, make sure you have an experienced Atlanta civil RICO attorney on your side.

A case that unfolded in Miami last year was the rare civil RICO case to make mainstream headlines. The defendant was a famous superstar baseball player-turned-TV-broadcaster. The plaintiff was the player’s former brother-in-law.

The player and the plaintiff’s sister married in 2002. Not long afterward, the two men formed a real estate business that owned apartments purchased for a total of $300 million, according to a TheRealDeal report.

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Civil RICO cases are a very special kind of civil lawsuit. More than a lot of other kinds of civil lawsuits (like, say, an auto accident case,) RICO cases involve numerous technical statutory pleading requirements, any one of which can be fatal to the plaintiffs’ case if not met to the precision required by the law and the rules of procedure. That’s why, whether you’re the plaintiff or the defendant in a civil RICO case, it is so important to have an experienced Atlanta civil RICO attorney handling your case. Whether it is recognizing (and fixing) the imperfections in your case, or identifying (and exploiting) the potentially fatal holes in your opponent’s case, the right legal counsel can help you achieve the outcome you need.

In a lot of cases, the outcome turns upon factual things. (“Did XYZ Corporation have discriminatory motives for engaging an adverse employment action against its employee, John Doe?” or “Did Jane Roe suffer injuries because James Poe negligently failed to yield the right of way?”)

RICO cases aren’t always like that. A lot of them get resolved because the plaintiff did something wrong in the pleading stage, and that error triggers a dismissal of the case, as was the case in one dispute recently addressed by the 11th Circuit Court of Appeals.

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If you operate a business long enough, you’re almost certain to be sued at some point. Sometimes, those civil suits may present scary and intimidating causes of action, such as accusing you and your business of engaging in racketeering activity. While they may seem unnerving to you, they are often, in the eye of an experienced Atlanta civil RICO lawyer, clearly insufficient. With the right legal team on your side, you may very possibly be able to get these kinds of insufficient claims dismissed at the outset.

Fans of the TV medical drama House may remember a recurring bit based upon the disease lupus. When the younger doctors would (frequently) suggest that a particularly confounding case was lupus, Dr. House almost always rejected the diagnosis by stating either “it’s not lupus” or “it’s never lupus.” Many times, a RICO claim in a civil lawsuit is a bit like a lupus diagnosis on House. To the less familiar, a set of facts might seem to point in that direction. The more experienced, however, recognize why it’s not.

A recent RICO case from the world of sports, reported by ESPN, makes for a good illustration. B.B., the plaintiff, was a star high school player who was recruited to play at a major Atlantic Coast Conference university. At that time, many observers believed that B.B. would eventually be selected in the first round of the NBA draft when he entered the professional basketball ranks.

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If you have a business in Georgia, you have likely been sued or eventually will be sued. If you receive a complaint that alleges that you violated racketeer influenced and corrupt organizations (RICO) laws, it may be easy to say… that is completely ridiculous! Indeed, it may well be. However, even if you fervently believe the plaintiff’s arguments are unserious, this lawsuit is something that you should treat with the utmost seriousness. That starts with getting in touch with an experienced Georgia civil RICO lawyer.

There are a couple of very big reasons why you should be extremely proactive after you’ve been sued in a RICO case, even if the claim seems blatantly inadequate. First, any claim existing against your business is something that can cost you money, so the sooner it is dispatched, the better for your business. Secondly, if you can demonstrate the depth of the claim’s facial insufficiency to the court, you may have open an opportunity to recover compensation of your own through an award of sanctions.

As to how that’s done, a recent RICO case from here in North Georgia makes for a good illustration. The plaintiff, R.W., was a Georgia real estate developer. In 2010, his bank approached him about restructuring some of his commercial loans. The developer agreed to the plan, which called for him to pledge his and his mother’s homes as collateral. Eight months later, the bank foreclosed on both homes.

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While Georgia’s Racketeer Influenced and Corrupt Organizations Act is modeled upon the federal RICO Act, it has some very clear differences that make Georgia’s RICO law more expansive than its federal counterpart. Even still, Georgia’s RICO law is limited in scope and, in many cases where it’s asserted as a claim, the alleged wrongdoing doesn’t fall within the narrow goalposts the law erects. If your ordinary business dispute has spun up into a claim of Georgia RICO violations by the other side, make sure you have an Atlanta RICO attorney experienced in handling these cases and in getting the claim dismissal or other positive outcome you need.

There are actually several ways that a civil claim under Georgia’s RICO law can come up short. For one thing, O.C.G.A. Section 16-14-4(a) requires that a RICO plaintiff prove that the defendant, by use of a “pattern of racketeering activity” or the proceeds from that activity, obtained “an interest in or control of any enterprise, real property, or personal property of any nature, including money.”

This last requirement was what felled one businessman’s recent RICO claim. That businessman, L.D., was someone who, according to some news reports, frequently acted as an intermediary between college football players and professional football agents.

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As a businessperson, you must face many challenges. One of the challenges your corporate entity may encounter is the disgruntled shareholder. Fortunately, the law limits what disgruntled shareholders can do by prohibiting them from undertaking a direct lawsuit (limiting them only to shareholder derivative suits) in many, though not all, situations. Whether you are a shareholder of a corporation needing to defend itself against an improper direct action or are a shareholder who needs to take legal action, you are someone who should retain the services of an experienced Atlanta business attorney to help you navigate your case.

Here’s an example from right here in the Metro Atlanta area. T.C., P.S. and K.W. were the three corporate shareholders of a suburban Atlanta-based mortgage lender. Each had a 1/3 interest in the company. After several years, the business failed, and the lender ceased operations.

T.C. subsequently filed a direct lawsuit against the other two shareholders, along with a number of corporate structures that P.S. and K.W. controlled, alleging that the defendants were liable for breach of fiduciary duty, unjust enrichment and violations of Georgia’s RICO Act.

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Most people associate the word ”racketeering” with the Mafia or other organized crime entities. However, the Racketeer Influenced and Corrupt Organization Act (RICO), both the federal and Georgia versions, span more than just situations involving organized crime. People can bring civil RICO lawsuits for a variety of reasons. The law is often overused, but any civil RICO claim is something your business should take very seriously because, if the plaintiff succeeds, your business could be forced to pay “treble damages,” which means a plaintiff’s award that is triple the amount of damages actually proved. Fortunately, there are many ways that a skilled Georgia civil racketeering attorney can defeat an improper civil RICO case launched against your business.

If you are on the defendant side of a civil RICO lawsuit, you should know that there are a significant number of pleading and proof requirements the law imposes on plaintiffs. This gives your knowledgeable attorney many opportunities to obtain a summary judgment that throws out the RICO claim before it ever makes it to trial.

As an example, we can look at a federal court case that started right here in North Georgia. The plaintiff, R.C., was a customer who bought a puppy at a Kennesaw pet store. She paid $2,400 for her Shih Tzu after receiving paperwork certifying that the dog was healthy. The dog wasn’t. A veterinarian diagnosed the puppy with parvovirus, which is often fatal in puppies.

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