Commercial Litigation and Arbitration

RICO — A Group of Persons Conspiring to Commit a Fraud Does Not Necessarily Comprise an Enterprise

From Millette v. DEK Techs., Inc., 2008 U.S. Dist. LEXIS 95933 (S.D. Fla. Nov. 25, 2008):

A RICO enterprise can not be a group simply conspiring to commit a fraud, that is not enough to trigger the Act. In re Managed Care Litigation, 298 F. Supp. 2d at 1274. The parties must be "organized in a fashion that would enable them to function as a racketeering organization for other purposes." ... Additionally, when the complaint is founded on commercial relationships between the alleged components of the enterprise, the Plaintiff should "plead facts dispelling the notion that the different parties entered into the alleged agreements for their own gain or benefit." …


While the Amended Complaint alleges with specificity the actors in the fraud and how it was perpetrated, Plaintiff has not sufficiently alleged a RICO enterprise because it appears that this group of individuals and entities associated only for this project.… As a result, the alleged "enterprise" was a group simply conspiring to commit a fraud and not functioning as a racketeering organization…. Furthermore, the actors in this alleged enterprise have commercial relationships and it is not clear whether the parties entered into the alleged agreement for their own gain or benefit.

To the same effect, see Pena v. A&C Landscaping, Inc., 2009 U.S. Dist. LEXIS 6277 (N.D. Ill. Jan. 28, 2009) (antepenultimate paragraph of decision).

Note that the Supreme Court heard argument on January 14, 2009, on whether, or to what extent, structure is required of an association-in-fact enterprise.

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