In case of RICO criminal charge involving unlawful transfers from Dominican Bank, Eleventh Circuit rules that RICO may apply extraterritorially where Defendant initiated transfers of funds from U.S. bank accounts of foreign company for benefit of U.S. Company and U.S. Citizen
Between January 2000 and February 2003 Luis Alvares Renta (Defendant) initiated a series of bank transfers from Banco Intercontinental SA (Plaintiff) that totaled more that $48 million. At that time, Plaintiff Ramon Baez Figueroa, Defendant's relative by marriage, controlled the funds. The transfers ultimately benefited companies owned by Defendant or Baez Figueroa or Defendant's personal accounts.
In 2003, the Government of the Dominican Republic (DR) had Plaintiff put into receivership. The receivership sued Defendant, a dual citizen of the U.S. and the DR, in a Florida federal court alleging fraudulent transfer and civil RICO claims. Plaintiff won a $177 million judgment.
Defendant appealed, claiming that the lower court should have dismissed (1) all claims on forum non conveniens grounds; (2) the RICO claims (a) for unripeness and (b) because RICO cannot apply extraterritorially. The U.S. Court of Appeals for the Eleventh Circuit disagrees and affirms.
Apparently treating the issue of extraterritorial application of civil RICO charges as novel, the Court reasons that: "The first question, one of first impression in this Circuit, is whether RICO applies extraterritorially at all...The more widely accepted view, and the one we adopt today, is that RICO may apply extraterritorially if conduct material to the completion of the racketeering occurs in the U.S., or if significant effects of the racketeering are felt here. [Cites]."
"It is clear that Plaintiff "s case has failed to qualify under the effects test. No harm to a U.S. person or business [from] this scheme has been brought to our attention. The effects were felt predominantly in the DR, where [Plaintiff] was based and where the majority of its depositors and creditors were located. Extraterritorial jurisdiction, if it exists, must derive from the conduct test."
"Significant amounts of conduct in furtherance of the RICO conspiracy occurred in both the U.S. as well as the DR. Indeed, the conduct occurring in, or directed at, the U.S. in this case was not an insubstantial or preparatory part of the overall looting scheme, but the actual means of its consummation. This scheme was carried out by directing transfers of funds to and from accounts at American banks, including the American bank accounts of the victim, [Plaintiff], and of one RICO enterprise, [Plaintiff]. Among its primary goals was enrichment of an American entity, Wadeville, controlled by an American Defendant. We have no doubt that under these circumstances, Congress would intend [Plaintiff] to have recourse to American courts and remedies." [Slip Op. 21 23]
Citation: Liquidation Commission of Banco Intercontinental v. Renta, 530 F.3d 1339 (11th Cir. 2008).
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