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LawHelpNow
LawHelpNow, Attorney/Lawyer
Category: Criminal Law
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Would this satisfy RICO pattern continuity requirement

Customer Question

Would this satisfy the continuity requirement for a RICO pattern? Defendants (controlling members of a legitimate enterprise) maliciously induce plaintiff into a contract with promises of performance which defendants know they will not fulfill. Plaintiff suffers losses over a 2-year period resulting from mail, wire and bank fraud. Plaintiff learns of fraud and terminates contract. Thereafter, defendants embezzle funds belonging to plaintiff held in escrow by defendants, and knowingly over bill plaintiffs for charges related to the contract (billing for services never rendered and excessive billing of expenses supposedly related to the contract). Plaintiff disputes the billing but defendants continue mailing verification of the charges to plaintiff, and demand payment or threaten litigation and/or negative reporting to credit bureaus. It is my belief that the original contract fraud creates a 2-year closed ended continuity, however it probably would be insufficient alone because there is one victim and one fraud scheme with no proof that this is the "normal business practice" of defendants. However, the billing after the contract ended includes extortion, threatening to report negative information for 7 years to credit bureaus, and threatening litigation intended to result in a judgment (the case is under North Carolina law, judgments are good for 10 years, but can be renewed every decade until satisfied). Each future act of reporting to a credit bureau, or verifying the debt after plaintiff disputes it with the credit bureau, would amount to mail or wire fraud and extortion. Likewise, filing of a lawsuit, or renewing the judgment after 10 years would amount to mail or wire fraud and extortion. Would a case plead like this likely survive a Rule 12(b)(6) motion?
Submitted: 3 years ago.
Category: Criminal Law
Expert:  LawHelpNow replied 3 years ago.

Hello and thanks for choosing Just Answer®.


I am a licensed attorney and will be glad to try and assist you. To provide you with accurate information, could you please clarify these points:


  1. Seeing your mention of North Carolina law, could you specify if you mean substantively, procedurally, or both (in other words, will the case be filed in state or federal court)?
  2. Noting your inquiry is posted in the criminal law forum, could you explain if this would be a criminal prosecution or a civil lawsuit (just a bit unsure on account of the mention of a Rule 12(b)(6) motion)?

 

Once I hear back from you, I will be glad to let you know my answer. There may be some delay as I am assisting other customers or am away from my computer. Please rest assured, however, that I will get back to you as soon as possible. Due to the late hour, this may be tomorrow (Saturday). However, I will not forget about you and will be back in touch with you then.



Thanks!

Customer: replied 3 years ago.
1. U.S. District Court, E.D.N.C.

2. Civil, the posting in the criminal law section was error, and the system would not let me correct it.
Expert:  LawHelpNow replied 3 years ago.
Thanks so much for choosing this forum to pose your important legal question. I will do my best to give you some honest and accurate guidance as I answer your question.

 

  1. I am a licensed attorney with criminal law and civil litigation experience. I will be glad to try and answer your questions. I hope that the following information will be helpful to you, but please just write back if you have any follow-up questions or need clarification after reviewing the following information.
  2. Thank you for taking the time to write back and supply the additional information as requested, which was helpful to my analysis of your inquiry. Just as an aside, I thought you might be interested in reading this rather creative pro se complaint filed in North Carolina: No. 2:99-cv-44-T
  3. "Would this satisfy the continuity requirement for a RICO pattern?" Yes -- it would satisfy both state and federal elements defining a Racketeer Influenced and Corrupt Organizations case, actually. State law essentially follows the federal approach, which is rather expansive in scope and nature. I would refer you to the North Carolina Racketeer Influenced and Corrupt Organizations Act, N.C. Gen. Stat. §§ 75D-1 to -14 and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 to 1968.
  4. "Would a case plead like this likely survive a Rule 12(b)(6) motion?" Yes -- in my estimation it absolutely would survive such an attack. As the underling facts you have presented surely do adequately set forth the elements of such a claim, your filing would certainly state a claim upon which relief could indeed be granted. Being rather familiar with the standard of the rule and interpretative appellate case law, I would not see any problems surviving such a motion under these circumstances. Federal Rules of Civil Procedure 12(b)(6)
  5. I hope that makes sense, but please do not hesitate to write back if needed. I shall be signing off soon to attend to some other professional obligations. Please rest assured, however, that I will be sure to check for any updated posts from you when I return to this online forum.

 

I hope that this information has been helpful to you. If we can be of any further assistance please free to use our service again. Best wishes for a successful outcome.

 

If my answer has been helpful to you, please click "ACCEPT" so that I may be paid. This is the only way that I will receive compensation for the work performed. Please consider clicking "BONUS" as a nice way of saying "thanks" for a job well done. Clicking "FEEDBACK" to leave your positive comments is always greatly appreciated.

 

The information provided is general in nature only and should not be construed as legal advice. By using this forum, you acknowledge that no attorney-client relationship has been created between you and Benjamin M. Burt, Jr., Esq. You should always consult with a lawyer in your state.

LawHelpNow, Attorney/Lawyer
Category: Criminal Law
Satisfied Customers: 7593
Experience: Relax. Let's work together. Practical solutions.
LawHelpNow and 5 other Criminal Law Specialists are ready to help you
Customer: replied 3 years ago.
The senario that I give is based on a case that is already filed in the eastern district of N.C. There is currently a motion to dismiss filed, and I have filed my memorandum in opposition. I am awaiting a ruling, and in the mean time preparing a Rule 59 motion in the event the action is dismissed. The main concearn I have is that while certian court opinions indicate that my theory should be good, I find no doctrine directly on point as to my open-ended continuity theory (most opinions tell us what isn't open-ended continuity, but none that I can find specifically say that my senerio is or is not). There is some evidence that suggests that my situation is defendants' usual means of conducting buisness, but I can't alege it with particularity without formal discovery. Furthermore, this company targets military personell who have been permanently transferred away from North Carolina, I need federal jurisdiction because many of the victims that I need to depose are in Germany, Korea, Japan, ect. Therefore, I am stuck with open-ended continuity, and if this goes up on appeal, I may end up arguing a case of first impression on a national basis (ie. this isue is not only new the the fourth circuit, but to all circuits). I don't like this idea, as courts tend to be hostile to civil RICO claims (although 4 cir. has a long history of being relatively fair to plaintiffs in comparison to some other jurisdictions).

Also, I looked at the pro se complaint you linked to. When I read it I thought it was horible. Then I looked up the rest of the case file. It turns out that pro se plaintiff had already filed similar suits in other jurisdictions where the actions had been dismissed. The case was dismissed with prejudice on the basis of issue and claim perclusion, but if it hadn't been, that complaint would have failed on the merits anyway.

_____________________________________________

Here is a less complicated question. I have also claimed diversity jurisdiction, and in my memorandum in opposition to the motion to dismiss I had to argue the amount of damages. Listed below is a verbatim exerpt from my memorandum, is the calculation of damages acurate?

We next note that treble damages can be awarded under each of N.C. Gen. Stat. § 75-16, N.C. Gen. Stat. § 75D-8, and 18 U.S.C. § 1964. Furthermore, remedies for both state and federal RICO claims are cumulative on other remedies, see N.C. Gen. Stat. § 75D-10. Therefore, if treble damages are awarded under all three, and the compensatory damages are $14,650.30, then total damages (excluding punitive damages) are 9 times compensatory damages plus $4,000 in civil penalties under N.C. Gen. Stat. § 75-56, or $135,852.70.

In North Carolina, a plaintiff cannot receive both treble damages for unfair and deceptive trade practices and punitive damages for fraud when both claims are based on the same set of facts. Instead the plaintiff takes the greater of treble damages or punitive damages, Mapp v. Toyota World, Inc., 81 N.C. App. 421, 344 S.E.2d 297, disc. rev. denied, 318 N.C. 283, 347 S.E.2d 464 (1986). We presume that this same standard applies to our federal RICO claim, see N.C. Gen. Stat. § 1D-20. However, “a statute dealing with a specific situation controls, with respect to that situation, [over] sections which are general in their application.” State ex. rel. Util. Comm’n v. Lumbee River Elec. Membership Corp., 275 N.C. 250, 260, 166 S.E.2d 663, 670 (1969); see also Credit Union Ins. Corp. v. United States, 86 F.3d 1326 (4th Cir. 1996) (“a specific statute controls over a general provision…”). The general rule is that a plaintiff must chose between punitive damages and other multiple damages remedies, N.C. Gen. Stat. § 1D-20. However, specifically for RICO violations, “[c]ivil remedies… are cumulative, supplemental and not exclusive…” N.C. Gen. Stat. § 75D-10. Therefore, plaintiffs must chose between either damages multiplied by 9 for UDTP, federal RICO, and N.C. RICO, or punitive damages plus damages multiplied by 3 for N.C. RICO.

We have alleged two separate fraud scams based on two separate sets of facts, and the jury is limited to awarding no more than $250,000.00 for each tort claim, N.C. Gen. Stat. § 1D-25(b). Therefore, if we include punitive damages, the maximum net damages possible are 3 times compensatory damages plus $4,000 in civil penalties plus 2 times $250,000.00, or $547,950.90.
Expert:  LawHelpNow replied 3 years ago.

Hello again,

 

Thanks for writing back -- good to hear from you.

 

Many thanks for your payment -- greatly appreciated!

 

I have to agree with you about the pro se complaint... my use of the word "creative" was a probably poor attempt at civility!

 

It has been a pleasure engaging with you, and I would be glad to answer your latest inquiry about the proper calculation of damages. I do know the answer, but to comply with the terms of this online venue I need to respectfully ask that you pose your question as a new (separate) thread. We have many fine legal experts working here, but if you would like to direct your query directly to my attention, please feel free to type (just copy and paste) into the text box under "Ask Your Question" on my Profile Page.

 

I hope all goes smoothly for you with this matter.

 

Take care and thanks again for choosing JustAnswer®!

 

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