RICO Lawyer & Attorney : Thomas Walker : Cosho Humphrey Law Firm : RICO Act, Federal and State Racketeering Litigation, Boise Idaho

 

WICHITA - After 11 days of deliberation, a federal jury on April 15^th found five men guilty of conspiring to operate organized crime through the Crips street gang in Wichita, Kansas, but jurors could not agree whether the defendants had participated in a pattern of racketeering.

A sixth defendant, whose lawyer said he had the least association with the group, was found not guilty of murder, racketeering and conspiracy.

The case posed the question of whether the street gang rose to the level of organized crime under the federal Racketeer Influenced and Corrupt Organizations Act, commonly known as RICO.

While the jury found that all the men committed criminal acts, jurors either acquitted or were unable to reach a verdict on charges that the alleged Crips members operated a criminal organization that met RICO standards.

However, five of the defendants were found guilty on RICO charges of conspiracy to engage in racketeering.

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A federal grand jury has handed down an indictment on the heels of a racketeering lawsuit filed in federal court in Seattle by ING Bank, the nation’s second-largest thrift, alleging a criminal conspiracy by an escrow agent, a mortgage broker and 10 couples to defraud the bank of at least $6 million through falsified mortgages. See previous post on this blog for information on the civil suit.
 

In that suit, the bank says David and Alla Sobol, two of the defendants in the federal indictment in Seattle, formed a family limited partnership to keep fraudulently gained fees out of creditors’ reach.
The latest in the onslaught of local prosecutions of mortgage fraud today comes from Seattle where a grand jury has returned a 40-count indictment against seven people alleging they conspired to commit mortgage, bank and wire fraud totaling more than $47 million.
 

According to the Seattle Times story, the seven conspired to fraudulently purchase dozens of homes in Seattle and its tony eastern suburbs at inflated prices. They allegedly got loans using phony buyers.
 

The Times explains:
“The charges allege they would obtain loans using ‘straw buyers’ — people who had no intention of living in the home but allowed their identities and credit to be used for a fee — and sometimes using unwitting applicants convinced they could make a buck by buying a home and then immediately reselling it. ‘The defendants . . . caused the loan application for the straw buyers and otherwise unqualified buyers to be prepared based upon fraudulent representations related to gross income, employment status, assets and liabilities, and whether the property would be used as a primary residence,’ the indictment says.”
 

The defendants then allegedly pocketed the some of the loan proceeds from the escrow accounts to buy two 2004 Lamborghini Gallardo sports cars, among other items.
 

Attorneys for the men say the Russian-speaking immigrants are victims.
 

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There are cases in which combining federal antitrust and RICO claims in a single suit can create a powerful litigation strategy. Such situations often arise in “associated in fact” enterprises consisting of several different business entities that have engaged, or are engaging, in a scheme that defrauds consumers and at the same time restrains trade and/or fixes prices.

Complaints asserting antitrust violations usually rely on the classic underlying antitrust statute, section 1 of the Sherman Act. Since its enactment almost a century ago, this statute has provided essentially as follows: “Every contract, combination . . . conspiracy in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. . . .” Section 2 of the Sherman Act may also be implicated: “Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony . . . .”

Combinations violating the Sherman Act may also constitute an “associated in fact” enterprise, and if the combination uses the United States mail, or telephone and facsimile services, or email and/or the Internet to implement and carry out a program that defrauds consumers or other businesses, the perpetrators also commit mail and wire fraud in violation of 18 U.S.C. §§ 1341 and 1343, respectively, which are predicate acts under the federal RICO Act.

The Sherman and RICO Acts provide for treble damages and an award of litigation costs and fees to the prevailing plaintiff. There are other similarities between the elements of the Sherman and RICO Acts that provide additional leverage to a plaintiff injured in his business or property by reason of the defendants’ violations of these two potent federal statutes. In addition, such cases usually involve pendent state law claims, including violations of state competition and racketeering acts that can also be tried in the federal court.

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Federal prosecutors are wrapping up -- without going to trial – a case against eight people accused of smuggling millions of dollars worth of cigarettes from North Idaho to tribal smoke shops in western Washington.

A trial date was recently cancelled with guilty pleas from four final defendants, including accused ringleader Louie Mahoney, of Plummer, Idaho.

The latest guilty pleas came eight months after at least three defendants from western Washington cut plea-bargain deals with federal prosecutors and agreed to testify against Mahoney and other co-conspirators living in North Idaho, court documents reveal.

The smuggling operation between 1999 and May 2003 cost the state of Washington an estimated $56 million in lost taxes, according to Jim McDevitt, the U.S. attorney for the Eastern District of Washington.

As part of the investigation and an earlier companion case involving six other defendants, a special task force seized $5.1 million in cash and more than 200,000 cartons of cigarettes.

Defendants in both cases agreed to forfeit the cash and cigarettes to the federal government as a condition of their plea agreements.

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