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RICO

Boyle v. United States

Issues

Does the United States need to prove the existence of a group with an identifiable structure, that goes beyond the racketeering activities at issue, in order to prove an association-in-fact enterprise under the RICO Act?

 

A jury convicted Edmund Boyle of racketeering and racketeering conspiracy under the Racketeer Influenced and Corrupt Organizations Act ("RICO") and sentenced him to 151 months in prison for his participation in a string of bank robberies. Boyle appealed his conviction to the Second Circuit, arguing that the United States misinterpreted the scope of an "enterprise" under RICO. Boyle argued that RICO did not apply because the United States could not prove that the group of bank robbers was an enterprise if it could not prove the group had a formal, ascertainable structure. The United States argued that the individuals were an enterprise and that they did not need to prove a formal structure existed under RICO. The Second Circuit affirmed the conviction. The Supreme Court granted Boyle's petition to determine a three-way circuit split over what constitutes an enterprise under the RICO statute. The outcome of this case will affect the scope of the RICO Act and will impact the ability of law enforcement to prosecute individuals under the RICO Act.

 

    Questions as Framed for the Court by the Parties

    Does proof of an association-in-fact enterprise under the RICO statute, 18 U.S.C. §§ 1962(c)-(d), require at least some showing of an ascertainable structure beyond that inherent in the pattern of racketeering activity in which it engages an exceptionally important question in the administration of federal justice, civil and criminal, that has spawned a three-way circuit split?

    Indictment and Trial

    In 2003, a New York grand jury indicted Edmund Boyle and eight other men on Racketeering Influenced and Corrupt Organizations ("RICO") Act conspiracy charges, claiming that they all participated in a series of bank robberies as members of an organization called the "Night Drop Crew." See Brief for Petitioner Edmund Boyle at 5-6,

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    Bridge v. Phoenix Bond & Indemnity Co.

    Issues

    In a civil suit brought under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), does the victim have to rely on the fraudulent mailing when considering its actions? If so, does that person have to be the person who brings the lawsuit, or can another person harmed by the same fraud bring a suit?

     

    This case concerns a civil claim under the Racketeer Influenced and Corrupt Organizations Act ("RICO"). Cook County, Illinois auctions tax liens to the publicThe winning bidder pays the back taxes and can then recover the amount of the delinquent taxes from the property owner, along with a penalty. If the taxpayer doesn't pay, the winning bidder gains ownership of the property on which the lien was placedMultiple bidders often tie in the auction, so bidders must submit affidavits that they are not using agents to gain an unfair advantage through relation with other bidders. Phoenix Bond and Indemnity Company ("Phoenix") brought a RICO suit against John Bridge for mail fraud, alleging that he submitted false affidavits which stated that it was unrelated to other bidders. The District Court dismissed the suit, stating that Phoenix was not the party that relied on the fraudulent mailings and therefore lacked standing to sue Bridge. The Court of Appeals reversedThe Supreme Court's decision in this case will determine whether only those parties who were the target of a fraudulent communication can bring a civil suit seeking damages under RICO.

    Questions as Framed for the Court by the Parties

    Whether reliance is a required element of a RICO claim predicated on mail fraud and, if it is, whether that reliance must be by the plaintiff.

    The Treasury Office in Cook County, Illinois conducts an annual auction in which the tax liens of property owners who fail to pay real estate taxes are sold to the public. Brief for Petitioner 3. The buyer of the lien must pay Cook County for any delinquent tax and any outstanding interest on the property. Id.&nbs

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    Hemi Group, LLC v. City of New York

    Issues

    Does loss of taxable revenue constitute an injury to business or property under RICO and was the City’s injury direct enough to meet the direct injury requirement for standing under RICO?

     

    Both the State and the City of New York have enacted laws that require the imposition of taxes on all cigarettes sold or used within their boundaries. The City of New York sued a group of Internet cigarette retailers under the Racketeer Influenced and Corrupt Organizations Act (“RICO”). The City of New York claimed that the retailers had violated federal and state laws in selling cigarettes to New York residents without charging a tax on tobacco products, constituting a form of consumer fraud as well as tax evasion. The District Court for the Southern District of New York dismissed the City's claims, holding that the City did not plead that the Internet retailers were an enterprise as defined by RICO. The Court of Appeals for the Second Circuit vacated the judgment of the lower court and held that the State could hold the retailers liable for its loss of tax revenue. The Supreme Court's decision in this case will affect the ability of Internet sites to sell tobacco products at a discounted price, as well as refine the application of RICO in civil suits.

    Questions as Framed for the Court by the Parties

    Whether city government meets the Racketeer Influenced and Corrupt Organizations Act standing requirement that a plaintiff  be  directly injured in its “business or property” by alleging con-commercial injury resulting from non-payment of taxes by non-litigant third parties.

    The State of New York imposes a tax on all cigarettes sold or used in the State (known as a use tax). See City of New York v. Smokes-Spirits.com, Inc., 541 F.3d 425, 432 (2nd Cir.

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    Additional Resources

    ·      Bloomberg.com, Greg Stohr: New York Suits Over Cigarette Sales Get U.S. High Court Review (May 4, 2009)

    ·      Business Week, Brian Burnsed: Preview of Major Business Cases in Supreme Court’s 2009-2010 Term (Sept. 24, 2009)

    ·      Trade Regulation Talk, John W. Arden & Mark Engstrom: High Court to Consider RICO’s “Business or Property” Requirement (May 22, 2009)

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    Medical Marijuana, Inc. v. Horn

    Issues

    Do economic harms, such as losing employment, qualify as injury to “business or property” under the Racketeer Influenced and Corrupt Organizations Act, if those harms stem from personal injuries, such as ingesting an unwanted drug?

    This case asks the Supreme Court to decide whether economic harms resulting from personal injuries are injuries to “business or property” for the purposes of the Racketeer Influenced and Corrupt Organizations Act (“RICO”). Commercial truck driver Horn ingested Dixie X to alleviate his back pain, after learning from the sellers that it contained no THC, even though it did. After testing positive for THC in a random drug test from his employer, Horn was fired. He then sued the sellers for injury to his business under RICO. Medical Marijuana, Inc. argues that ingestion of an unwanted substance like THC is a personal injury, and that economic damages from such an injury do not turn it into an injury to “business or property.” Horn claims that losing his job because of Medical Marijuana’s alleged fraud is an injury to “business or property.” This case has significant implications for the rights of human trafficking victims, the cost of doing business in consumer products, and the vitality of the hemp industry.

    Questions as Framed for the Court by the Parties

    Whether economic harms resulting from personal injuries are injuries to “business or property by reason of” the defendant’s acts for purposes of a civil treble-damages action under the Racketeer Influenced and Corrupt Organizations Act.

    Respondent, Douglas Horn, was a commercial truck driver for fourteen years before the event leading to this case occurred. Brief for Respondent, Horn at 3–4. In February 2012, he was involved in a trucking accident in which he sustained injuries to his shoulder and back.

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    Yegiazaryan v. Smagin

    Issues

    Can a foreign plaintiff sue under the Racketeer Influenced and Corrupt Organizations Act for injury to intangible property?

    This case asks the Supreme Court to determine whether a foreign party can file a claim under the Racketeer Influenced and Corrupt Organizations Act (“RICO”) when they suffer injury to their intangible property. Respondent Vitaly Smagin alleges that Petitioner Ashot Yegiazaryan violated RICO by injuring his intangible property: a judgment Smagin previously secured against Yegiazaryan in the United States. Yegiazaryan argues that plaintiffs can only bring a RICO claim if the injury underlying such a claim has a domestic, and not foreign, locus. Accordingly, Yegiazaryan contends that the alleged injury to the judgment occurred outside of the United States and therefore is not cognizable under RICO. In contrast, Smagin argues that the injury occurred in the United States and consequently falls under RICO. The Court’s decision will impact the scope of RICO, as well as relations between the United States and other sovereigns.

    Questions as Framed for the Court by the Parties

    Whether a foreign plaintiff states a cognizable civil claim under the Racketeer Influenced and Corrupt Organizations Act when it suffers an injury to intangible property, and if so, under what circumstances.

    In 2010, Respondent Vitaly Smagin, a Russian citizen residing in Russia, obtained an $84 million judgment against Petitioner Ashot Yegiazaryan in an arbitration proceeding in London. Smagin v. Yegiazaryan at 565. Smagin had alleged that Ashot committed fraud against him in relation to a joint real estate investment in Moscow. Id.

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