LAWYERS BEWARE: MOST CASES DO NOT MEET RICO’S REQUIRMENTS

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Civil RICO is dynamite. In skilled hands, it can be explosively useful. When used carelessly, it can backfire.

Case in point. Our eager, aggressive plaintiffs’ lawyer – let’s say “our Hero” sees a failed deal or a dishonest employee and thinks, “this is awful, it’s a conspiracy, it’s RICO.” But if our Hero’s complaint fails to show the misconduct is part of a pattern, it fails.

RICO simply does not apply to a single fraudulent scheme injuring a single victim no matter how awful.  Our Hero would have to show multiple instances of wrongdoing (called “schemes”) typically occurring over at least two years or continuing into the future injuring the plaintiff and preferably more than just one other victim.  And even if the defendant has committed other schemes harming someone other than the plaintiff, the RICO violations all need to be related, similar enough to be considered one overall pattern.

Let’s summarize this. For a case under RICO, our Hero must plead, in detail:

  • Multiple instances of wrongdoing (a “scheme”)
  • Multiple victims of the scheme
  • All of which are sufficiently related to constitute a pattern

It’s not enough to say the villain has done this to others in the last several years.  The other victims need to be named and usually the RICO violations committed against them have to be detailed with dates, and the basic “who, what and where” of each transaction to comply with Fed. R. Civ. P. 9(b). 

Lessons for Our Hero

Be skeptical before telling your client they have a good RICO case.  Your client won’t know if the villain has injured others.  It’s up to you to find the elusive pattern and the other elements needed to state a RICO claim.  Unless you can plead and prove all of this, don’t play with dynamite – you can be seriously embarrassed or worse.

When thinking about RICO, think about Foster PC , The Rico AuthorityTM. Let us give you the guidance you need before playing with dynamite. Howard Foster is ready to help you analyze and refine your thinking about potential RICO cases.  Give us a call.