Articles Posted in RICO

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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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