Commercial Litigation and Arbitration

RICO — Causation Post-Bridge

From Ritter v. Klisivitch, 2008 U.S. Dist. LEXIS 58818 (E.D.N.Y. July 30, 2008):

Plaintiff alleges that Defendants engaged in "a RICO enterprise scheme ... whose activities included tax evasion, money laundering, financial institution fraud, insurance fraud, bankruptcy fraud, and obstruction of justice, all with the intended goal of preventing Plaintiff from collecting on her judgments. For example, Plaintiff alleges that Defendants committed mail fraud by using the United States mail to file fraudulent tax returns, false affidavits, and fraudulent information with financial institutions. Plaintiff further alleges that Defendants committed wire fraud by using interstate and foreign wires to transfer cash and assets. She also claims that Klisivitch filed false and fraudulent schedules in the bankruptcy proceeding, that Colette Panebianco and Klisivitch testified falsely in a deposition taken in the bankruptcy action, that Klisivitch testified falsely at a creditors' committee examination, and that Klisivitch directed his attorneys and agents to withhold inculpatory documents from discovery.

Plaintiff's allegations that she is unable to collect on her state judgments as a result of Defendants' acts of mail and wire fraud are sufficient to satisfy the proximate cause requirement under both Anza and Bridge, at least with regard to several of the predicate acts alleged. For example, Defendants' transfer of monies and filing of false documents in the bankruptcy proceeding both "led directly to [P]laintiff's injuries," i.e., her inability to satisfy her judgments. Anza, 547 U.S. at 461. Furthermore, under Bridge, Plaintiff's claim survives notwithstanding the fact that the alleged misrepresentations were made to third parties and not to Plaintiff, as Plaintiff's injury was "a foreseeable and natural consequence" of Defendant's predicate acts. Accordingly, the Court finds that Plaintiff has adequately alleged that she has been injured "by reason of a violation of section 1962." 18 U.S.C. § 1964(c).

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