Antitrust Law Daily Wrap Up, RICO—N.Y. Sup.: Investors properly pleaded North Carolina RICO claims, (Jan 10, 2014)

By Edward L. Puzzo, J.D.

Allegations of violations of the North Carolina RICO statute, against individuals who allegedly misappropriated funds intended as investments, were properly pleaded and should not be dismissed, the State Supreme Court in New York City has ruled (Gregor v. Rossi, January 3, 2014, Rakower, E.).

Deborah Gegor and Carl Gerardi, plaintiffs, alleged that Joseph Rossi and his wife Anji Rossi used the trust gained through friendship with plaintiffs to solicit, receive and convert funds from them, falsely representing that the funds would be used to purchase interests in defendants’ companies VTL Diagnostics, LLC (VTL) and Vetaura, Inc. (Vetaura). They further alleged that they paid over $900,000 involving wiring funds from plaintiffs’ North Carolina bank account to defendants’ New York bank account; that Mr. and Mrs. Rossi executed promissory notes jointly and severally agreeing to repay the funds by providing an ownership interest in defendants’ companies; and that they never did so and instead misappropriated the funds for their personal gain.

RICO allegations. Plaintiffs alleged that by engaging in these actions, defendants had violated the North Carolina RICO statute under NCGSA §§75D-4(a)(l), 4(a)(2) and 4(a)(3) by, respectively, engaging in a pattern of racketeering, conducted as part of an enterprise, and conspiring with one another. Defendants moved to dismiss.

First, with regard to the proper forum, Deborah Gregor alleged that she resided in North Carolina and was induced to wire funds from her North Carolina account to New York to make continuing investments in defendants’ alleged scheme. The court ruled that these allegations were sufficient to demonstrate that North Carolina had an interest in this matter and, under the applicable choice of law rules, North Carolina law should apply.

Next, the court, accepting all allegations as true, ruled that plaintiffs had adequately set forth North Carolina RICO violations against defendants Joseph and Anji Rossi under NCGSA §§75D-4. Therefore, dismissal for failure to state a cause of action was not warranted.

The case is Civil Action No. 651432/2013.

Attorneys: Taylor, Coliccio & Studholme for Deborah Gregor and and Carl Gerardi. L’Abbate Balkan Colavita, Richard A. Kraslow, PC and Venable LLP for VTL Diagnostics LLC and Vetaura Inc.

Companies: VTL Diagnostics LLC; Vetaura, Inc.

Cases: RICO NewYorkNews