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Winter 2003-13 Elements necessary for a RICO claim

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Number 50
Winter 2003

Elements necessary for a RICO claim

In Soto Negrón v. Taber Partners Limited I, 2002 U.S. Dist. LEXIS 24176, the U.S. District Court for the District of Puerto Rico expounded on the elements that must be present in order for a plaintiff to prevail in a lawsuit under the Racketeering Influenced and Corrupt Organizations Act, 28 U.S.C. § 1961.

Epimenio Soto Negrón and others purchased six money orders payable to the U.S. Marshal Service, and alleged that defendant Taber Partners Limited I (Radisson Ambassador Plaza Hotel and Casino) had cashed them at its casino. Plaintiffs claimed that such action constituted a violation of the RICO act.

RICO elements

The District Court explained in its opinion that in order to state a claim under RICO, a plaintiff must allege each of four elements, to wit: (1) the conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.

In order to establish a "pattern," the plaintiff must show:

at least two predicate acts of racketeering activity,

that said acts are related and

that they amount to or pose a threat of continued criminal activity.

Predicate acts are "related" if they have the same or similar purposes, results, participants, victims or methods of commission. They may also be "interrelated by distinguishing characteristics." Predicate acts may not be isolated events.

The court ruled that the plaintiffs' pleadings in this case were insufficient to meet the "pattern" element requisite, because they did not show a threat of continuing criminal activity.

First, the predicate acts extended only over one week. It is necessary that they extend over a period longer than a few weeks or months.

Second, plaintiffs did not allege that the defendant's acts were a regular way of operating business, or a standard operating procedure. "RICO is not aimed at a single narrow criminal episode, even if that single episode involves behavior that mounts to several crimes, for example, several unlawful mailings . . . While the complaint's allegations may support fraud or other state law claims, they simply do not establish the continuity necessary to prove a violation of the RICO statute. The Defendant's acts may indeed have been criminal and reprehensible; however, they do not threaten the kind of continued criminal activity required under RICO."

The court granted Taber Partners' motion to dismiss.


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