Racketeer Influence and Corrupt Organizations Act (“RICO”) can be used as a civil remedy in instances of a pattern of significant criminal activity. RICO provides for treble damages. But can a RICO claim be brought against the executor of an estate?
Article Courtesy of probatestars.com
Can a RICO Claim Be Brought Against The Executor Of An Estate?
Yes. The Court of Appeals for the Second Circuit recently ruled that RICO claims can be brought in connection with unlawful activities by an executor or personal representative of an estate, in connection with the estate of the father and financial backer of noted fashion designer Vera Wang.
In King v. Wang, 2016, U.S. App. Lexis 15753 (2nd Cir. 2016), the estate of noted artist and art collector C.C. Wang was at issue. C.C. Wang was also the father and financial backer of fashion designer Vera Wang.
Before and during the administration of his estate, the Defendant was alleged to have engaged in a scheme to deprive the Plaintiff’s of their rightful inheritance from the Decedent. As explained by the lower court:
Here, Plaintiffs’ RICO claims are based on allegations that Defendants engaged in an “ambitious scheme . . . designed to change C.C. Wang’s financial affairs and long standing estate plan” in order to facilitate the diversion of family assets away from Plaintiffs and into Defendants’ hands. (Compl. ¶¶ 46, 154-57, 179.) To the extent, therefore, that Plaintiffs’ RICO claims seeks damages from Defendants personally on the ground that their conduct prevented Plaintiffs from receiving an expected gift or inheritance, they are exactly the type of probate-related claims that Marshall permits federal courts to address. See Marshall, 547 U.S. at 304; Rothberg, 2013 WL 1314699, at *11.
The Second Circuit affirmed Federal jurisdiction over the RICO claim, explaining:
To determine whether a case falls within the probate exception we must assess: (1) whether the action requires “the probate or annulment of a will [or] the administration of a decedent’s estate;” and (2) whether the action requires the court “to dispose of property that is in the custody of a state probate court.” Marshall v. Marshall, 547 U.S. 293, 311-12 (2006); see also Lefkowitz v. Bank of N.Y., 528 F.3d 102, 106 (2d Cir. 2007) (“Following Marshall . . . so long as a plaintiff is not seeking to have the federal court administer a probate matter or exercise control over a res in the custody of a state court, if jurisdiction otherwise lies, then the federal court may, indeed must, exercise [jurisdiction].”). Post-Marshall, the probate exception is to be construed narrowly, such that unless a federal court is endeavoring to (1) probate or annul a will, (2) administer (or invalidate the administration of) an estate, or (3) assume in rem jurisdiction over property that is in the custody of the probate court, the probate exception does not apply. Lefkowitz, 528 F.3d at 105-06. We agree with the district court that the RICO claims raised here “are exactly the type of probate-related claims that Marshall permits federal courts to address.” King, 2015 WL 4207076, at *5.
The Court also succinctly explained the basic requirements for pleading a RICO action for civil damages:
To adequately plead a pattern of racketeering activity, a “plaintiff must plead at least two predicate acts, and must show that the predicate acts are related.” GICC Capital Corp. v. Tech. Fin. Grp., Inc., 67 F.3d 463, 465 (2d Cir. 1995) (citation omitted). In addition, plaintiffs must plead the predicate acts “amount to, or pose a threat of, continuing criminal activity,” the “so-called ‘continuity’ requirement.” Id. “Thus, a plaintiff in a RICO action must allege either an ‘open- ended’ pattern of racketeering activity (i.e., past criminal conduct coupled with a threat of future criminal conduct) or a ‘closed-ended’ pattern of racketeering activity (i.e., past criminal conduct ‘extending over a substantial period of time’).” Id. at 465.
States currently with Civil RICO Statutes
JUSTICE.gov: Civil RICO: A Manual for Federal Attorneys
NATIONAL ADULT MISTREATMENT REPORT SYSTEM (NAMRS) //www.justice.gov/elderjustice/eappa-data-overview#NationalAdult
National Adult Maltreatment Reporting System //namrs.acl.gov/
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The National Adult Maltreatment Reporting System (NAMRS) is a data reporting system established and operated by the Administration for Community Living (ACL) for the purpose of better understanding the phenomena of adult maltreatment in the United States. Currently, the data collected is submitted by adult protective services (APS) programs.
NAMRS annually collects data on APS investigations of abuse, neglect and exploitation of older adults and adults with disabilities, as well as information on the administration of APS programs. The data provide an understanding of key program policies, characteristics of those experiencing and perpetrating maltreatment, information on the types of maltreatment investigated, and information on services to address the maltreatment.
Organizational information, including: number of investigators, how programs collect reports of maltreatment, and populations investigated.
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