Court Affirms Dismissal of RICO Claim Finding Inadequate Allegations of a RICO Association in Fact Enterprise and RICO Conspiracy

Omnipol, A.S. v. Multinational Defense Services, LLC,  __4th __, 2022 WL 1311596 (11th Cir. 2000)

The court affirmed the dismissal of various claims, including a RICO claim. The complaint had alleged that the defendants had engaged in two fraudulent schemes. First, the complaint alleged that the defendants had conspired to defraud the government by tricking SOCOM into accepting defective arms, ammunition, and supplies. Second, the complaint alleged that the defendants induced Omnipol and Elmex into contracting with Purple Shovel to supply and deliver the 7,500 assault rifles, all the while intending to divert the SOCOM payment into their own coffers and leave Omnipol and Elmex unpaid.

Association in Fact Enterprise

In addressing the civil RICO claims, the court concluded the amended complaint failed to properly allege the existence of an enterprise finding the second prong of Boyle v. United States, i.e., (2) ‘relationships among those associated with the enterprise,’ was not satisfied

The court stated that the amended complaint failed to adequately plead “relationships among those associated with the enterprise,’ as the amended complaint merely alleged that the various defendants “knew each other” and “associated with each other in public and private” at some point in time prior to the formation of Purple Shovel. Although “proving sufficient relationships for an associated-in-fact enterprise is not a particularly demanding task,”  it certainly requires more than suggesting that at some unknown point in past the defendants “knew” and “associated” with each other.  Such allegations certainly do not plausibly suggest that this group of five individuals acted as a “continuing unit.” Turkette, 452 U.S. at 583, 101 S. Ct. at 2528. As such, the amended complaint failed to state a claim for either state or federal RICO violations.

RICO Conspiracy 

Section 1962(d) of the RICO statutes makes it illegal for anyone to conspire to violate one of the substantive provisions of RICO, including § 1962(c)18 U.S.C. § 1962(d). Direct evidence of a RICO conspiracy is not required; “the existence of conspiracy ‘may be inferred from the conduct of the participants.’ ” A complaint must, however, offer more than “mere[ ] legal conclusions.”  In this case, the allegations in the amended complaint did not support an inference of an agreement to violate the substantive provisions of RICO. The complaint simply alleges that the defendants “intentionally conspired” and “agreed to the commission of [the racketeering acts] to further the scheme” outlined in the complaint. This is the kind of “formulaic recitations” of a conspiracy claim that the Supreme Court declared insufficient in Twombly and Iqbal

Accordingly, the court concluded that the District Court did not err in dismissing the RICO conspiracy claim in the amended complaint.

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