Commercial Litigation and Arbitration

RICO — § 1962(b) Requirements — Inadequacy of 18 U.S.C. § 1346, Alone, as a Predicate Act

From Adams v. County of Erie, 2009 U.S. Dist. LEXIS 87289 (W.D. Pa. Sept. 23, 2009):

To establish a claim under § 1962(b), the Plaintiff must allege an injury from the Defendants' acquisition or control of an interest in a RICO enterprise, in addition to injury from the predicate acts. Lightening Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1190 (3d Cir. 1993).... Merely repeating the same injures that resulted from the alleged acts of racketeering is not enough; the injury must be the result of the Defendants' actions in acquiring or maintaining control of the enterprise.... "The fact that a Defendant could not have harmed the plaintiff 'but for' the fact that he controlled the enterprise does not satisfy this test." ....

[T]he Plaintiff must establish a nexus between the interest and the alleged racketeering activities, not merely that the Defendants engaged in racketeering and have an otherwise legitimate interest in the enterprise. ***

Section 1346 of Title 18 of the United States Code, which defines "scheme or artifice to defraud" as including a scheme to deprive another of the intangible right of honest services, is not a stand-alone act of racketeering for purposes of RICO. Moreover, assuming it is possible to allege "honest services" mail or wire fraud as a predicate act of racketeering under RICO, there are no allegations in the SAC establishing how ... any ... Defendant accomplished this "honest services" scheme through specific acts of mail or wire fraud. ***

Although acts of robbery chargeable under state law are included within RICO's definition of "racketeering activity," theft is not. ***

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