Antitrust Law Daily Wrap Up, RICO—SDOhio: Mortgage Holders Liable For RICO Violations , (Feb 7, 2013)
Law Firms Mentioned:Ulmer & Berne LLP
Organizations Mentioned:Iberia Bank, N.A. | MKP Investments LLC | Ulmer & Berne, LLP
By Jody Coultas, J.D.
Iberia Bank, N.A. was granted summary judgment of a Racketeering Influenced and Corrupt Practices Act (RICO) counterclaim against mortgage holders that engaged in money laundering and loan application fraud, according to the federal district court in Columbus, Ohio (Parenteau v. Iberia Bank, N.A., February 5, 2013, Watson, M.).
Thomas and Marsha Parenteau refinanced their mortgage with Iberia Bank’s predecessor and provided information on their net assets and improvements made to the property. As part of the loan agreement, the Parenteaus agreed to open a $3 million CD with the bank, which was frozen and not accessible until the loan was paid off or paid down to $3 million. The Parenteaus filed breach of contract, conversion, and unjust enrichment claims against the bank regarding the CD and loan agreement, while the bank counterclaimed under RICO.
In separate criminal and civil proceedings, the Parenteaus were held liable for fraudulent mortgage schemes and conspiring to launder money.
RICO makes it unlawful for any person employed by any enterprise engaged in interstate or foreign commerce to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity. The pattern requirement is satisfied by a showing of a relationship and continuity.
The Parenteaus business, MKP Investments LLC, qualified as a RICO enterprise, as it operated as a holding company for the Parenteaus’ other businesses. MKP was used to carry out numerous fraudulent schemes by the Parenteaus and their co-conspirators. The pattern of racketeering activities requirement was met by the conspiracy to commit money laundering and loan application fraud. Predicate criminal acts are related if they have a similar purpose, result, or are otherwise related. The Parenteaus’ conduct through MKP included bank and wire fraud connected to numerous instances of criminal activity and would have continued but for criminal prosecutions.
The case is No. 2:07-cv-851.
Attorneys: Reuel D Ash (Ulmer & Berne LLP) for Iberia Bank, N.A.
Companies: Iberia Bank, N.A.; MKP Investments LLC
Cases: RICO OhioNews