Antitrust Law Daily Wrap Up, RICO—N.D. Cal.: Former church director’s RICO and conspiracy claims against JPMorgan Chase dismissed, (Dec 2, 2013)

By Linda O’Brien, J.D., LL.M.

A former church director cannot proceed with civil RICO and conspiracy claims against a bank and numerous individuals over alleged enterprise activity to defraud and harm him, the federal district court in San Francisco has ruled (Cobb v. JPMorgan Chase Bank, N.A., November 27, 2013, White, J.).

Jason Cobb was a former member, director, and officer of the English Menlo Park Congregation of Jehovah’s Witnesses, a nonprofit corporation. Cobb filed an action against JPMorgan Chase Bank and numerous individual defendants alleging violations of the RICO Act, as well as a variety of federal constitutional and state claims. In addition to dismissing the RICO claims, the court declined to exercise supplemental jurisdiction over the state law claims.

Cobb claimed that the defendants engaged in an association-in-fact enterprise to defraud and harm him, force him to dismiss or withdraw from various civil cases he had against these same defendants, and discredit him so he would not continue his efforts to expose their alleged RICO activities. Specifically, he alleged that he was improperly removed from his church position as part of a money laundering scheme, his identity was improperly used to open bank accounts, and family law proceedings and criminal charges were falsely filed against him. The defendants moved to dismiss the federal and state claims.

Cobb asserted civil RICO and conspiracy claims against the defendants, alleging acts of bank fraud, bribery, extortion, obstruction of justice, mail fraud, money laundering, and wire fraud, in support of those claims.

Civil RICO and conspiracy claims. The court found that Cobb failed to allege facts showing conduct of an enterprise through a pattern of racketeering activity which caused injury or harm to his business or property. In rejecting Cobb’s argument that he incurred damages due to an inability to find employment as a result of the defendants’ conduct, the court noted that the deprivation of his “honest services” did not constitute concrete financial loss sufficient to establish injury to state a RICO claim and any alleged injury was purely contingent. The court also rejected Cobb’s claim of injury based the alleged interference with his various lawsuits since he failed to show how the defendants’ conduct resulted in any loss or injury to the underlying causes of action. Additionally, any legal fees he incurred in connection with those suits were not shown to be proximately caused by conduct that would qualify as a RICO predicate act.

RICO predicate acts. Cobb’s allegation that the individual defendants tried to prevent him from obtaining bank records without the bank being the intended victim of the alleged scheme was insufficient to show bank fraud as a predicate act. He also failed to allege any facts showing that the defendants engaged in bribery, extortion, obstruction of justice, mail and wire fraud, and money laundering, according to the court. The court also found that Cobb’s allegations of conspiracy were conclusory and speculative.

The case is No. 13-cv-01955-JSW.

Attorneys: Jeffrey A. Vinnick (Haight Brown) for JPMorgan Chase Bank, N.A.

Companies: JPMorgan Chase Bank, N.A.

Cases: RICO CaliforniaNews