Antitrust Law Daily Wrap Up, RICO—N.D. Ill.: Conduct of an enterprise not shown in “payment processor” employment scheme, (Jul 14, 2014)
Organizations Mentioned:ABB Ltd | ABB, Ltd. | Associated Bank NA | Catholic University of America | Chicago Sun-Times | Google, Inc. | National Arbitration Forum | SunTrust Bank | United Parcel Service, Inc. | Western Union
By Edward L. Puzzo, J.D.
The alleged victim of a fraudulent “payment processor” employment scheme could not sustain RICO claims against various entities used in the scheme because there was no showing that an enterprise existed, nor that the defendants had an operational or managerial role in conducting the enterprise, the federal district court in Chicago has ruled (Amin v. SunTrust Bank, July 11, 2014, Durkin, T.).
Plaintiff Chirag Amin alleged that he was the victim of a fraudulent scheme involving an opportunity for employment. He had responded to a help-wanted ad in the Chicago Sun-Times for a type of bookkeeping position. He received an email response from Taylor Mark, sent via Gmail, allegedly hiring him for an independent contractor “payment processor” position. He then received checks, allegedly issued by Catholic University, drawn on a SunTrust account. He followed Taylor Marks' instructions to deposit the checks into his personal bank account, then to withdraw most of the funds and send them via Western Union to a purported financial representative of ABB, Ltd. Later, Amin found that the checks he had deposited were dishonored and his bank had reduced his account balance by the amount of the deposited checks, plus bank fees, resulting in him losing money for his “services” to Taylor Mark.
Amin consequently brought RICO, Lanham Act and other claims against all parties with any connection to the fraudulent transactions, including the Chicago Sun-Times, which had run the help-wanted ad; Google's G-mail service, through which Taylor Mark had sent his e-mails; Catholic University and its employee Renell Lewis, who had purportedly issued the checks he deposited; United Parcel Service, who had delivered the checks; SunTrust Bank, the bank upon which the bad checks had been drawn; Associated Bank, Amin's own bank; Western Union, through which he had sent funds; and ABB, Ltd., the alleged recipient of the funds.
To state a claim under the RICO statute, the court explained, a plaintiff must adequately allege (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity.
RICO 'conduct' element. Regarding the 'conduct' element of RICO, the court explained, participation in the management of the enterprise is required; a business relationship with the putative RICO enterprise or the performance of services for that enterprise are not sufficient.
The use of Google's Gmail e-mail service did not demonstrate that Google participated in a putative RICO enterprise in any way, the court found. The publication of an ad by the Chicago Sun-Times did not establish any relationship to a racketeering enterprise on the part of the newspaper, let alone an operational or managerial role, the court also found. The endorsement of a later-dishonored check by Renell Lewis, Catholic University's employee, showed, at most, performance of a service on behalf of the alleged enterprise, not an operational or managerial role, the court continued. Finally, Taylor Mark's placement of an ad in the Sun-Times and his use of a Gmail account to contact Amin were at most administrative services on behalf of the alleged enterprise, not a demonstration of an operational or managerial role, the court found. Further, even if Taylor Mark or Renell Lewis had knowledge of an organization's illicit activity, that would still be insufficient to demonstrate an operational or managerial role, opined the court.
RICO 'enterprise' element. Amin's complaint also alleges nothing that demonstrated that any combination of defendants were (1) acting together; (2) pursuing a common purpose; or (3) involved in an organization with a structure and goals separate from the predicate acts themselves, noted the court. The various acts alleged by Amin by seemingly unrelated individuals and entities did nothing more than demonstrate that Amin was allegedly duped by a random individual, Taylor Mark, the court stated.
The failure to satisfy the “conduct” and “enterprise” elements of a RICO claim in these ways meant that the RICO complaints against Google, the Chicago Sun-Times, Catholic University, Taylor Mark and the other defendants must fail, the court ruled. The RICO claims were therefore dismissed with prejudice.
Lanham Act. The plaintiff's Lanham Act claims were also dismissed with prejudice. The Lanham Act imposes liability on any person who makes false or misleading misrepresentations of fact in connection with any goods or services, the court explained. Here, however, the allegedly fraudulent scheme involved an opportunity for employment. An opportunity for employment is neither a good nor a service, the court stated, so it did not fall under the protections of the Lanham Act.
The case is Civil Action No. 14 C 3903.
Companies: SunTrust Bank; Catholic University of America; Western Union; Associated Bank NA; National Arbitration Forum; United Parcel Service, Inc.; Chicago Sun-Times; Google, Inc.; ABB, Ltd.
Cases: RICO Advertising IllinoisNews