Deceptive Conduct After Receipt of Money May Still Violate Mail Fraud Statute

Mailings occurring after receipt of the goods obtained by fraud are within
the mail-fraud statute if they `were designed to  lull the victims into a false sense of security, postpone their ultimate complaint to the authorities, and therefore
make the apprehension of the defendant less likely than if no mailings had taken place.’ (quoting Maze, 414 U.S. at 403 ); United States v. Pacheco- Ortiz, 889 F.2d 301, 305 (1st Cir. 1989) (post- Schmuck).  For the mailings to be considered in furtherance
of the scheme, the scheme’s completion or the prevention of its detection must have depended in some way on the mailings.”

 

 

Mistakes Lawyers Make in RICO Cases

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  1. Not Clearly Explaining the Claim 

The defendant is involved in a fraud and you provide a complicated explanation that the Court does not fully understand.   Your claim is likely to be dismissed (probably with leave to re-file once).

2. Assuming that justice will be done. 

Many frauds continue with skilled counsel, until the collapse finds limited funds and many unpaid claims.  The skilled SEC believed Madoff and not his accuser, the Wolf of Wall Street continued for years.  Do not assume that simply because a wrong has been committed that the Court will address it; you need to prove your claim clearly and convincingly at the pleading stage.

     3.  Lumping the defendants together 

No, saying the defendant willfully and deliberately conspired to defraud the plaintiff making multiple false statements resulting in the substantial losses set forth above- is not going to do it.   You will need to identify what each defendant did.  Each will pretend not to understand what it is alleged to have done wrong and a vague complaint will again be subject to dismissal

CALL FOR A FREE CONSULTATION TO DISCUSS HOW WE CAN HELP YOU STRENGTHEN YOUR CLAIM.

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RICO CLAIMS IN NEW JERSEY

1.  Impact of the New Jersey Consumer Fraud Act.  

There are some distinctive aspects to New Jersey claims.   New Jersey has a powerful Consumer Fraud Act, N.J.S.A. 56: 8-1.  If you are a plaintiff, make your life easier with a statute that has few requirements, rather than a demanding one.

2. Standard on Motions to Dismiss

Generally a plaintiff wants to be in state court, and New Jersey law requires far less under the Printing Mart standard than federal law under Iqbal.  Consider pleading a state based cause of action in state court to avoid the rigors of responding to a motion to dismiss.   Note client response can vary and many can be attracted to the lure of a federal case, without realizing the enhanced proof requirements.

Questions, feel free to call about co-counsel, brief assistance, or consultation on your RICO case.   

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HANDLING THE RICO MOTION TO DISMISS

 

You received a motion to motion how do you respond.  (if you a defendant and have not filed a motion, a simple question, why).

1. Simple Statement

You need to lay out the claim in a simple and understandable fashion.  Do not take language from another brief about enterprise, predicate claims, etc, throw it in and assume that will be sufficient.  This means you must briefly but clearly explain the predicate acts.

2. No judge, you are not supposed to assess credibility or adjudge the claim

Your brief should not that the judge’s task is simply to determine whether a claim has been set forth and supported.

3. Explanation of fraud

Your client may explain that the  fraud is clear and the judge will be shocked at the fraud.  Put that in the same category as the friend who says his high schooler will be playing in the NBA.  A safe assumption is that the claim will be thoroughly scrutinized, indeed criticized,  with a substantial possibility it will be deemed insufficient.  A safe course is to contact your client at least 10 times, by email, letter, and call, and ask for more specificity and clarity in his allegations, asking what document supports the allegations.  Note the largest fraud in history, Madoff, was the subject of repeated complaints by a knowledgeable observer saying it was a Ponzi scheme and those were repeatedly rejected as conclusory and unsupported.

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CALL (973) 598-1980 for a Free Consultation on your RICO Claim.

 

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CALL FOR A FREE CONSULTATION TO DISCUSS HOW WE CAN ASSIST YOU IN YOUR RICO CLAIM 

RICO CASE SUCCESS

 

 

 

We are happy to represent clients or assist other counsel.   Here are some of our successes.

Civil

Handling of RICO civil claim in federal court.  (confidential Six Figure Settlement Against Multiple defendants)  We successfully fought motions to dismiss for substantive and jurisdictional reasons in an online fraud.

Jury Verdict Consumer Fraud, state court   We achieved a six figure jury verdict in a consumer fraud claim in Superior Court, Union County.

Criminal Defense 

My client faced multiple counts of conspiracy, RICO, and other causes of action, and was told he faced a 20 year state prison sentence.  Our office intervened and filed motions questioning the specificity of the indictment and secured a one count plea bargain which ultimately resulted in community service and no jail time.

Handling Fraud and RICO Claims: Powerpoint Slide Summary

Howard Gutman gave a presentation to the Institute for Continuing Legal Education on handling civil RICO claims.  Here is a summary of the slides, with the Powerpoint available through Slideshare.  www.slideshare.net.

 

We welcome the opportunity to assist you with research assistance, motion preparation,  co-counsel and other services.  Call now for a free consultation about how we can strengthen your case in a cost-effective way.   

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We welcome the opportunity to assist you with research assistance, motion preparation,  co-counsel and other services.

 

  1. 1. HANDLING THE FRAUD AND RICO CLAIM: GUIDELINES AND CHALLENGES • Law Office of Howard A. Gutman 230 Route 206, Suite 307 Flanders, New Jersey 07836 315 Madison Avenue, Suite 901 New York, New York 10165 (973) 598-1980, howardgutman@aol.com, ricolawyer.org
  2. 2. PRESENTATION GOALS • Familiarize you with how to evaluate and investigate fraud and RICO claims. • Discuss typical defenses and how Court approach the claims • Review client relationship issues
  3. 3. Fraud Claim Viability • Many of those committing frauds have substantial assets. • Cases have obvious jury appeal. • Value, helping to protect society, deter wrongdoing.
  4. 4. Many types of fraud • Advance fee fraud Approval for loans or business transaction. Monies paid, unexpected problems arise. • Check clearing fraud. Basic theme, check deposited, disbursed 4-5 days and fails on secondary clearance. • Victims frequently re-solicited for the same fraud. Once I receive the additional 20,000, we will be able to transfer 10 million dollars to your account.
  5. 5. ASSETS OF SCHEMERS • Wolf of Wall Street employed over 1000 brokers and handled approximately $1 billion in assets. Ordered to pay back 100 million of 200 million taken. • Madoff had over 7 billion in liquid assets during much of his tenure. • Some are located in the U.S.
  6. 6. Challenges • Schemes well-hidden and conceived. Several law firms have been victimized • Badges of reliability. Linked-in profile, impressive background. In commercial transaction, well-drafted documents. Sorting through the data. • Economic viability, time, depletion of assets
  7. 7. Personal Characteristics of Schemers • Above Average Intelligence (just misplaced), in other circumstances, successful in a legitimate role. • Willingness to lie during investigation and skill in that effort. • Calm and easy manner. Not defensive Culprit may be well-dressed and look like your affable neighbor.
  8. 8. Nature of the Scheme and Skills of the Perpetrators • Layers of deception, hidden or misleading information. Enlist others to reinforce false statements, vouch for credibility, and give the victim confidence (“confidence game”) • Put it in writing. Written promises or representations made and then easily avoided. (blame coconspirators, victim, profess payment is being made).
  9. 9. Skills and Tactics in the Fraud Case • Delay, attacks on victims, blame co- conspirators. We have requested an immediate follow-up about the delay in funding your loan, our investigation has shown false statements in your loan application • Understanding of the limits of the system, fraud cases are complex, plaintiff’s lawyers, usually charge hourly, many claims not filed. (police frequently unresponsive).
  10. 10. Tools for Obtaining Information • Online Materials, Ripoffreport.com anecdotal reports of various deceptions • Blogs, Facebook • Gov sources, Florida Department of Consumer Affairs (no attachment of home in Florida. • Private investigators
  11. 11. Skills of Perpetrators in the Fraud Case • Understanding of the limits of the system, fraud cases are complex, plaintiff’s lawyers, usually charge hourly, many claims not filed. (I’ll go to the police or FBI, frequently an idle threat) • Distinguish fraud directed to the Court which elicits strong and severe penalties from less serious deception to the public or victim.
  12. 12. Investigatory Goals for Counsel in the Fraud and RICO Case • Acquire multiple sources of information • Be able to tell a clear and understandable story. • Have documents that corroborate your client’s version. • Establish culpability of each participant.
  13. 13. Client Assistance in Fraud Cases • Research the scheme and identify other victims. • Organize documents and provide an Excel Spreadsheet. • Followup with investigatory or regulatory agencies.
  14. 14. Challenges • Commercial cases involve substantial time and work. Expensive on an hourly, questions of economic viability on a contingency. • Look for common schemes and utilize factual and legal research. • Will the same lack of realism that made him a victim impact his research.
  15. 15. Client Challenges in Fraud and RICO Claim • Will the same lack of realism that made the client a victim impact his research. • Carry over of false impressions or statements, assets of coconspirators • Conclusory statements where documentation or support needed.
  16. 16. Where Client is Usually not Helpful • Explanations of how strong the case is, Discussion of how shocked the judge will be about the fraud. • Predictions about how the defendant will quickly settle after a particular event- letter, complaint, etc.
  17. 17. Attorney’s Pre-suit Role in Fraud Cases • Need for candor and pushing the client for organization of documents, understanding of scheme and clarification of how the scheme works. • Consider awaiting decision about litigation until completion of investigation.
  18. 18. Client Retention • Hourly billing the most standard and reliable. Many cases end up in federal courts with detailed discovery, lengthy briefs and multiple conferences. • Cannot make client commit to a specific settlement. • Contingency, be careful of straight percentage. Your client may reject a settlement of ½ because of the lack of incremental cost.
  19. 19. Considerations in Accepting Contingent Representation • Trying to control and limit time. • Clear understanding of the basic case helps limit time and facilitate resolution. • Client commitment to assist with organization of documents.
  20. 20. Memorialize Client Help • Provide for client obligations in engagement agreement.
  21. 21. Documentation • Need for compilation of documents, particularly in federal court. • Ideal, Excel spreadsheet identifying documents by category, brief explanation of importance. Client scanned papers.
  22. 22. Defenses in the Fraud Case • Complaint is vague and cannot be defended. Fraud not pled with particularity, a defense that has historically done quite welI. • Fact that defendant committed the fraud and obviously understands what he did and why- usually not persuasive. • I know I did it. I’m entitled to know whether you figured out how.
  23. 23. Federal Court Standard for Fraud Complaints • To satisfy this heightened pleading standard, a plaintiff must state the circumstances of his alleged cause of action with “sufficient particularity to place the defendant on notice of the ‘precise misconduct with which [it is] charged.’” Frederico v. Home Depot, 507 F.3d 188, 200 (3d Cir. 2007). Specifically, the plaintiff must plead or allege the “date, time and place of the alleged fraud or otherwise inject precision or some measure of substantiation into a fraud allegation.” Rule 9(b) requires a plaintiff to allege the “essential factual background that would accompany ‘the first paragraph of any newspaper story’—that is, the ‘who, what, when, where and how’ of the events at issue.” In re Suprema Specialties, Inc. Sec. Litig., 438 F.3d 256, 276-77 (3d Cir. 2006) .
  24. 24. Dismissal and Twombly • Possibly the most important case ever decided, in terms of handling federal court litigation. Provides expansive power and leeway to dismiss federal cases on motion. Bell Atlantic v. Twombly, 127 S.Ct. 1955 (2007) • Examine evidence in detail at the pleading stage. Allegations are not assumed to be true even if well-pled. Must be substantiated at the pleading stage.
  25. 25. Dismissal, Federal Courts and Twombly • Bell Atlantic v. Twombly, 127 S.Ct. 1955 (2007) a plaintiffs obligation to provide the grounds for of his relief “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level.
  26. 26. Twombly • A new way of handling claims where the central event is the motion to dismiss. • Particularly troublesome in fraud cases. False or misleading statements can be put forth without discovery or scrutiny. • A world upside down. Truthful plaintiff has his statements scrutinized while defendant largely escapes scrutiny.
  27. 27. Complaints Frequently Dismissed • Dismissal without prejudice the usual disposition. • Not only is judge sympathetic to defense arguments about understanding the specific claims, the judge wants a clear, well-drafted complaint for her own purposes. • The prosecution cannot prove the case of a guilty defendant, not my problem.
  28. 28. Iqbal • Ashcroft v. Iqbal 556 U.S. 662 (2009). Continues and expands Twombly. • Case correctly decided, allegations unsupported but skillfully made to satisfy the legal standard. • A claim has facial plausibility only when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Claim must be substantiated. To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” Id., at 570.
  29. 29. Standard on Dismissal Motions • Plausible means close to proven • Speculation unacceptable. Allegations must be factually supported. • Dismissal motions now standard Mini- summary judgment motion – Plaintiff must establish a plausible claim at the pleading stage.
  30. 30. Madoff • Madoff Fraud – Largest fraud involving thousands of fraudulent claims in a 15 year, 50 billion dollar Ponzi scheme. • Complainant – Demopoulos correctly identified the Ponzi scheme, based upon the exaggerated and implausible returns. After multiple calls and complaints, and a perfunctory investigation, his complaint was rejected.
  31. 31. How Madoff Was Handled and Persistence of the Same Problems • Investigatory body looked into the alleged fraud and essentially cleared him. Applied Twombly/Iqbal, finding no fraud. • In Madoff, false documents were provided with false stories. Quickly accepted without sufficient investigation. Twombly/Iqbal motions Tremendous incentive for defendant to conceal or lie since discovery cannot expose the deception.
  32. 32. Lessons from Madoff • Correctly identifying a fraud is not enough. You need to explain exactly how it is run. • Courts and investigatory agencies will not allow discovery without the claimant presenting substantial evidence. • Concern about fairness to the defendant and adequacy of pleading can exceed the interest in protecting the public and providing justice to the victim.
  33. 33. Lessons from Madoff (2) • Two realities – What actually occurred and what plaintiff can prove. • Evidence not justice based system. Do not assume indulgent treatment. • Defendants will lie and those misstatements may find their way into defendant’s briefs. • Substantial and compelling evidence can even be found insufficient. Wright v. BankAmerica Corp., 219 F.3d 79 (2d Cir. 2000) (extensive evidence and criminal prosecution insufficient to permit inference of fraud, reversed by Second Circuit)
  34. 34. Addressing Iqbal and Madoff • Discuss barriers with client Multiple calls and communications to solidify and clarify claim. Have client explain what was false or misleading and why. • Clear complaint. No broad references to defendants. Explain what each defendant did. •
  35. 35. Policy Arguments • Public policy of deterring fraud. • Falsus in unum, falsus in omnibus. Proof of falsity should help establish the claim, at least permit discovery. If the defendant lied but provides facts, should credibility issues preclude resolution on motion. • Twombly and Iqbal were not fraud cases. Requirement of pleading specificity already sorts out unmeritorious claims.
  36. 36. Policy Considerations • The market crash of 2008-09 occurred largely because of widespread fraud. Solution, makes valid claims harder to file. • Dodd-Frank provides a comprehensive set of regulations. Why not punish those engaged in fraud, rather place burdens upon innocent businesses.
  37. 37. Concerns in Presenting Fraud Claims to Judge • Annoying the judge by talking about policy considerations, instead of factually laying out the claim. • Basic rule, tailor your presentation to the decision-maker • Conflating all defendants’ responsibility (defendants engaged, defendants solicited rather than laying out the role of each.
  38. 38. Judge and Client: Conflicting Expectations • Client: we will get important documents in discovery. Judge: Why wasn’t this case adequately investigated before being filed. • Client: general allegations of fraud sufficient. Judge: Fraud must be pled with particularity, where, why, when, and how.
  39. 39. RECOGNIZE JUDGE’S CCONCERN • One magistrate had a caseload of 500 cases. Little room for confusing pleadings. • Judge is not an advocate but an individual charged with applying the law. • Opinion needs to set forth factual basis for findings. Vague complaint means a vague opinion.
  40. 40. Pleading Tips • Clear complaint Articulate what each defendant did wrong. What statements are false or misleading and why. (demanding task) • Be careful of broad-based pleading- collective references to defendants. Instead A did this, B did this.
  41. 41. Fraud and RICO Pleading Tips (2) • Expect and plan for the motions to dismiss. • Consider referencing materials or even attaching as an exhibit so they are part of the pleading.
  42. 42. Favorable Law to Site on Motions • application of Rule 9(b) prior to discovery “may permit sophisticated defrauders to successfully conceal the details of their fraud.” Craftmatic Sec. Litig. v. Kraftsow, 890 F.2d 628, 645 (3d Cir. 1989). • where the facts of the fraud “are peculiarly within the defendant’s knowledge or control,” courts relax the application of this rule, Craftmatic, 890 F.2d at 645.
  43. 43. Venue • Burdens associated with federal court leads to the obvious question, why are you there. Long, detailed opinions means the need for equivalent briefs and affidavits in federal court. • More lenient standard in NJ state court under Printing Mart on dismissal motion • Consider just proceeding with common law fraud and conspiracy and include state defendants.
  44. 44. Dismissal Standard in New Jersey State Court • Lenient standard on motion to dismiss Printing Mart v. Short 116 N.J. 739 (1989) “such motions, almost always brought at the very earliest stage of the litigation, should be granted in only the rarest of instances. If a complaint must be dismissed after it has been accorded the kind of meticulous and indulgent examination counselled in this opinion, then, barring any other impediment such as a statute of limitations, the dismissal should be without prejudice.”
  45. 45. RICO • Complex, sometimes confusing statute which provides a civil remedy for organizations (loosely defined) engaged in criminal conduct. • Statute suggests two criminal incidents allows Rico. Court construal far more narrow.
  46. 46. Challenges under Rico • Continuity Continuing criminal enterprise, not isolated acts. Under Iqbal, need to prove this at the time of pleading. (Madoff, being correct but not being able to prove it is not enough) • Mail and wire fraud Most common predicate acts. Court concern about garden variety fraud, civil disputes criminalized.
  47. 47. RICO VENUE • Venue Cases can be filed in state or federal court. • State and federal RICO statute • Review the local rule on RICO statement. My site ricolawyer.org has cases, practice tips, etc.
  48. 48. Rico Impact Mixed • Some initial impact Statute on its face imposing. But later a lot of pleadings (amended complaints, etc) and waiting. • Motion to dismiss May take 4-5 months to decide and court could stay discovery. • Lengthy briefs needed articulating each element, enterprise definition, predicate acts.
  49. 49. Conspiracy to Commit Fraud • Important Cause of Action • Not all elements of fraud cause of action have to be pleaded as to all parties. • Research aiding and abetting fraud.
  50. 50. Causes of Action in Typical Cases • Fraud and conspiracy to commit fraud. • Rico, state and federal • Consumer Fraud Act. • Breach of contract, negligence.
  51. 51. Federal Court Concerns • Motion to dismiss. Court scrutinizes complaint at the pleading stage requiring factual support and documentation. • Federal court used to and expect considerable pre-trial investigation. • Complaint should generally be drafted to maintain state jurisdiction.
  52. 52. Consumer Fraud • Broad-based statute providing treble damages and counsel fees. • Nice jury charge Model Jury Charge 4.43 • May cover various forms of deceptive conduct, though concern about exclusion with other regulatory schemes. • Avoids extensive motion practice associated with RICO.
  53. 53. Criminal Complaints • Local Police Pleasant but recommends referral to state. • State Pleasant but recommends referral to federal • FBI Prosecutions rare
  54. 54. Other Investigatory Entities • FTC • State banking regulatory entities.
  55. 55. Policy Concerns • Frauds continue- profitable, easy, lack of enforcement, plausible deniability, capable defense counsel.
  56. 56. Policy Concerns (2) • We have one of the highest rates of incarceration in the world but no one has time to investigate devastating frauds. • Not our job or jurisdiction. No one likes hard cases. Whose job is it. Statistics not helped. • Less skilled criminals arrested, better ones escape. Shouldn’t we be concentrating efforts at those who present the most danger to the public.
  57. 57. Handling of Criminal and Regulatory Complaints • Follow up, Inaction frequent- recall Madoff, multiple calls largely ignored. • Each agency has a different way of doing things. Try to understand and address their needs and procedures. • Try to have law enforcement at least interview the defendant.
  58. 58. Handling of Criminal and Regulatory Complaints • Followup. Not our job or jurisdiction. No one likes hard cases. Statistics not helped. Recognize challenges and presumption of inaction. • Multiple agencies and jurisdictions Go to different agencies. • Criminal and regulatory can generally be simultaneously. Be careful of threats to file either.
  59. 59. Discovery • Serve narrow, targeted discovery. • Serve the requests early, follow-up and file a motion to compel. • Better make sure client understand his discovery obligations. Typical comment in commercial contingency cases, the lawyer has all the papers and will handle it. Contingent or alternative fee arrangement should memorialize client’s work.
  60. 60. Depositions • Be careful of wiggle words that avoid answers, attempts to switch topics. • Defendant’s attorneys sometimes obstructive, restate questions. • Musante, The Artful Dodge, Good seminar about dealing with evasive witnesses.
  61. 61. Frivolous Claim Motions • Standard in this litigation. (the more pervasive the fraud the more likely it will be defended). • Attack on the plaintiff, a good client-relations tool for defense counsel. • Negotiating tool Implicit suggestion, we have claims, you have claims, you request counsel fees, so do we.
  62. 62. Strategies for Addressing Frivolous Claims Letters • Review and internally document your claim. • Set forth law and facts in response. • Ask questions. Will defendant provide a certification, provide specified documents for review.
  63. 63. SETTLEMENT • Amount Cases veer toward one half of loss not considering punitive or treble damages. Federal courts more likely to note pleading deficiencies than risk of enhanced damages. • Be receptive Assets dissipate. • Concern about pure percentage contingency.
  64. 64. QUESTIONS AND CONTACT INFORMATION • Comments or questions.  Feel free to contact our office if you have any questions. • Law Office of Howard A. Gutman 230 Route 206, Suite 307 Flanders, New Jersey 07836 315 Madison Avenue, Suite 901 New York, New York 10165 (973) 598-1980, howardgutman@aol.com, www. ricolawyer.org.

    Call now to discuss how we can help you identify arguments, prepare briefs, and effectively present your case or defense.


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DO YOU REALLY WANT TO INCLUDE THAT RICO CLAIM IN YOUR COMPLAINT

You want to file a RICO claim with your civil complaint.  Indeed, your client may have come to you for the specific reason of filing under RICO.   He may be telling you about the damages the statute provides and the impact the filing will have.  Stop!   Take a second to review the pros and cons.

1.  Venue in federal court.

Without a RICO claim, it is possible for the claim to be filed in and remain in state court.  Federal caselaw now allows a motion to dismiss to challenge the complaint, and have plaintiff substantiate its allegations, before any discovery.   You will face a mini summary judgment motion at the onset.   In contrast, in states such as New Jersey, early motions to dismiss are disfavored and outlining the claim and requesting discovery may be sufficient.

2. Other causes of action may be as persuasive without the baggage.

Common law fraud permits punitive damages without a lengthy pleading.  You will likely include state fraud claims and conspiracy anyway.  Many state consumer fraud statutes such as New Jersey permit triple damages without the requirement of showing a pattern, criminal enterprise, predicate acts  and satisfying other statutory requirements.

3. Why  not file the State RICO statute.

Less popular, state civil RICO statutes can provide similar relief.

We welcome the opportunity to assist you with research assistance, motion preparation,  co-counsel and other services.  Call (973) 598-1980 for a Free Consultation.

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Competitor Standing Under RICO

 Summary :  A  competitor is damaged by unlawful conduct.  Can it sue.  Anza v. Ideal Supply sets forth the standard for competitor standing.

JUSTICE KENNEDY delivered the opinion of the Court.

Anza v. Ideal Supply, 547 U.S. 451 (2006)

The Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U. S. C. §§ 1961-1968 (2000 ed. and Supp. III), prohibits certain conduct involving a “pattern of racketeering activity.” § 1962 (2000 ed.). One of RICO’s enforcement mechanisms is a private right of action, available to “[a]ny person injured in his business or property by reason of a violation” of RICO’s substantive restrictions. § 1964(c) 

In Holmes v. Securities Investor Protection Corporation, 503 U. S. 258, 268 (1992), this Court held that a plaintiff may sue under § 1964(c) only if the alleged RICO violation was the proximate cause of the plaintiff’s injury. The instant case requires us to apply the principles discussed in Holmes to a dispute between two competing businesses.

I 

Because this case arises from a motion to dismiss, we accept as true the factual allegations in the amended complaint. See Leatherman v. Tarrant County Narcotics Intelligence and Coordination Unit, 507 U. S. 163, 164 (1993). 

Respondent Ideal Steel Supply Corporation (Ideal) sells steel mill products along with related supplies and services. It operates two store locations in New York, one in Queens and the other in the Bronx. Petitioner National Steel Supply, Inc. (National), owned by petitioners Joseph and Vincent Anza, is Ideal’s principal competitor. National offers a similar array of products and services, and it, too, operates one store in Queens and one in the Bronx.

 deal sued petitioners in the United States District Court for the Southern District of New York. It claimed petitioners were engaged in an unlawful racketeering scheme aimed at “gain[ing] sales and market share at Ideal’s expense.” App. 7. According to Ideal, National adopted a practice of failing to charge the requisite New York sales tax to cashpaying customers, even when conducting transactions that were not exempt from sales tax under state law. This practice allowed National to reduce its prices without affecting its profit margin. Petitioners allegedly submitted fraudulent tax returns to the New York State Department of Taxation and Finance in an effort to conceal their conduct.

 

Ideal’s amended complaint contains, as relevant here, two RICO claims. The claims assert that petitioners, by submitting the fraudulent tax returns, committed various acts of mail fraud (when they sent the returns by mail) and wire fraud (when they sent them electronically). See 18 U. S. C. §§ 1341, 1343 (2000 ed., Supp. III). Mail fraud and wire fraud are forms of “racketeering activity” for purposes of RICO. § 1961(1)(B). Petitioners’ conduct allegedly constituted a “pattern of racketeering activity,” see § 1961(5) (2000 ed.), because the fraudulent returns were submitted on an ongoing and regular basis.

Ideal asserts in its first cause of action that Joseph and Vincent Anza violated § 1962(c), which makes it unlawful for “any person employed by or associated with any enterprise engaged in, or the activities of which affect, 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 or collection of unlawful debt.” The complaint states that the Anzas’ goal, which 455*455 they achieved, was to give National a competitive advantage over Ideal.

 

The second cause of action is asserted against all three petitioners. It alleges a violation of § 1962(a), which makes it unlawful for any person who has received income derived from a pattern of racketeering activity “to use or invest” that income “in acquisition of any interest in, or the establishment or operation of,” an enterprise engaged in or affecting interstate or foreign commerce. As described in the complaint, petitioners used funds generated by their fraudulent tax scheme to open National’s Bronx location. The opening of this new facility caused Ideal to lose “significant business and market share.” App. 18.

Petitioners moved to dismiss Ideal’s complaint under Federal Rules of Civil Procedure 12(b)(6) and 9(b). The District Court granted the Rule 12(b)(6) motion, holding that the complaint failed to state a claim upon which relief could be granted. The court began from the proposition that to assert a RICO claim predicated on mail fraud or wire fraud, a plaintiff must have relied on the defendant’s misrepresentations. Ideal not having alleged that it relied on petitioners’ false tax returns, the court concluded Ideal could not go forward with its RICO claims.

 

Ideal appealed, and the Court of Appeals for the Second Circuit vacated the District Court’s judgment. 373 F. 3d 251 (2004). Addressing Ideal’s § 1962(c) claim, the court held that where a complaint alleges a pattern of racketeering activity “that was intended to and did give the defendant a competitive advantage over the plaintiff, the complaint adequately pleads proximate cause, and the plaintiff has standing to pursue a civil RICO claim.” Id., at 263. This is the case, the court explained, “even where the scheme depended on fraudulent communications directed to and relied on by a third party rather than the plaintiff.” Ibid.

The court reached the same conclusion with respect to Ideal’s § 1962(a) claim. It reasoned that Ideal adequately pleaded its claim because it alleged an injury by reason of petitioners’ use and investment of racketeering proceeds, “as distinct from injury traceable simply to the predicate acts of racketeering alone or to the conduct of the business of the enterprise.” Id., at 264.

 We granted certiorari. 546 U. S. 1029 (2005).

 II

 Our analysis begins—and, as will become evident, largely ends—with Holmes. That case arose from a complaint filed by the Securities Investor Protection Corporation (SIPC), a private corporation with a duty to reimburse the customers of registered broker-dealers who became unable to meet their financial obligations. SIPC claimed that the petitioner, Robert Holmes, conspired with others to manipulate stock prices. When the market detected the fraud, the share prices plummeted, and the “decline caused [two] broker-dealers’ financial difficulties resulting in their eventual liquidation and SIPC’s advance of nearly $13 million to cover their customers’ claims.” 503 U. S., at 262, 263. SIPC sued on several theories, including that Holmes participated in the conduct of an enterprise’s affairs through a pattern of racketeering activity in violation of § 1962(c) and conspired to do so in violation of § 1962(d).

 

The Court held that SIPC could not maintain its RICO claims against Holmes for his alleged role in the scheme. The decision relied on a careful interpretation of § 1964(c), which provides a civil cause of action to persons injured “by reason of” a defendant’s RICO violation. The Court recognized the phrase “by reason of” could be read broadly to require merely that the claimed violation was a “but for” cause of the plaintiff’s injury. Id., at 265-266. It rejected this reading, however, noting the “unlikelihood that Congress meant to allow all factually injured plaintiffs to recover.” Id., at 266.

 

457*457 Proper interpretation of § 1964(c) required consideration of the statutory history, which revealed that “Congress modeled § 1964(c) on the civil-action provision of the federal anti-trust laws, § 4 of the Clayton Act.” Id., at 267. In Associated Gen. Contractors of Cal., Inc. v. Carpenters, 459 U. S. 519 (1983), the Court held that “a plaintiff’s right to sue under § 4 required a showing that the defendant’s violation not only was a `but for’ cause of his injury, but was the proximate cause as well.” Holmes, supra, at 268 (citing Associated Gen. Contractors, supra, at 534). This reasoning, the Court noted in Holmes, “applies just as readily to § 1964(c).” 503 U. S., at 268.

 

The Holmes Court turned to the common-law foundations of the proximate-cause requirement, and specifically the “demand for some direct relation between the injury asserted and the injurious conduct alleged.” Ibid. It concluded that even if SIPC were subrogated to the rights of certain aggrieved customers, the RICO claims could not satisfy this requirement of directness. The deficiency, the Court explained, was that “the link is too remote between the stock manipulation alleged and the customers’ harm, being purely contingent on the harm suffered by the broker-dealers.” Id., at 271.

 

Applying the principles of Holmes to the present case, we conclude Ideal cannot maintain its claim based on § 1962(c). Section 1962(c), as noted above, forbids conducting or participating in the conduct of an enterprise’s affairs through a pattern of racketeering activity. The Court has indicated the compensable injury flowing from a violation of that provision “necessarily is the harm caused by predicate acts sufficiently related to constitute a pattern, for the essence of the violation is the commission of those acts in connection with the conduct of an enterprise.” Sedima, S. P. R. L. v. Imrex Co., 473 U. S. 479, 497 (1985).

 

Ideal’s theory is that Joseph and Vincent Anza harmed it by defrauding the New York tax authority and using the 458*458 proceeds from the fraud to offer lower prices designed to attract more customers. The RICO violation alleged by Ideal is that the Anzas conducted National’s affairs through a pattern of mail fraud and wire fraud. The direct victim of this conduct was the State of New York, not Ideal. It was the State that was being defrauded and the State that lost tax revenue as a result.

 

The proper referent of the proximate-cause analysis is an alleged practice of conducting National’s business through a pattern of defrauding the State. To be sure, Ideal asserts it suffered its own harms when the Anzas failed to charge customers for the applicable sales tax. The cause of Ideal’s asserted harms, however, is a set of actions (offering lower prices) entirely distinct from the alleged RICO violation (defrauding the State). The attenuation between the plaintiff’s harms and the claimed RICO violation arises from a different source in this case than in Holmes, where the alleged violations were linked to the asserted harms only through the broker-dealers’ inability to meet their financial obligations. Nevertheless, the absence of proximate causation is equally clear in both cases.

 

This conclusion is confirmed by considering the directness requirement’s underlying premises. See 503 U. S., at 269-270. One motivating principle is the difficulty that can arise when a court attempts to ascertain the damages caused by some remote action. See id., at 269 (“[T]he less direct an injury is, the more difficult it becomes to ascertain the amount of a plaintiff’s damages attributable to the violation, as distinct from other, independent, factors”). The instant case is illustrative. The injury Ideal alleges is its own loss of sales resulting from National’s decreased prices for cashpaying customers. National, however, could have lowered its prices for any number of reasons unconnected to the asserted pattern of fraud. It may have received a cash inflow from some other source or concluded that the additional sales would justify a smaller profit margin. Its lowering of prices 459*459 in no sense required it to defraud the state tax authority. Likewise, the fact that a company commits tax fraud does not mean the company will lower its prices; the additional cash could go anywhere from asset acquisition to research and development to dividend payouts. Cf. id., at 271 (“The broker-dealers simply cannot pay their bills, and only that intervening insolvency connects the conspirators’ acts to the losses suffered by the nonpurchasing customers and general creditors”).

 

There is, in addition, a second discontinuity between the RICO violation and the asserted injury. Ideal’s lost sales could have resulted from factors other than petitioners’ alleged acts of fraud. Businesses lose and gain customers for many reasons, and it would require a complex assessment to establish what portion of Ideal’s lost sales were the product of National’s decreased prices. Cf. id., at 272-273 (“If the nonpurchasing customers were allowed to sue, the district court would first need to determine the extent to which their inability to collect from the broker-dealers was the result of the alleged conspiracy to manipulate, as opposed to, say, the broker-dealers’ poor business practices or their failures to anticipate developments in the financial markets”).

 

The attenuated connection between Ideal’s injury and the Anzas’ injurious conduct thus implicates fundamental concerns expressed in Holmes. Notwithstanding the lack of any appreciable risk of duplicative recoveries, which is another consideration relevant to the proximate-cause inquiry, see id., at 269, these concerns help to illustrate why Ideal’s alleged injury was not the direct result of a RICO violation. Further illustrating this point is the speculative nature of the proceedings that would follow if Ideal were permitted to maintain its claim. A court considering the claim would need to begin by calculating the portion of National’s price drop attributable to the alleged pattern of racketeering activity. It next would have to calculate the portion of Ideal’s lost sales attributable to the relevant part of the price drop. 460*460 The element of proximate causation recognized in Holmes is meant to prevent these types of intricate, uncertain inquiries from overrunning RICO litigation. It has particular resonance when applied to claims brought by economic competitors, which, if left unchecked, could blur the line between RICO and the antitrust laws.

 

The requirement of a direct causal connection is especially warranted where the immediate victims of an alleged RICO violation can be expected to vindicate the laws by pursuing their own claims. See id., at 269-270 (“[D]irectly injured victims can generally be counted on to vindicate the law as private attorneys general, without any of the problems attendant upon suits by plaintiffs injured more remotely”). Again, the instant case is instructive. Ideal accuses the Anzas of defrauding the State of New York out of a substantial amount of money. If the allegations are true, the State can be expected to pursue appropriate remedies. The adjudication of the State’s claims, moreover, would be relatively straightforward; while it may be difficult to determine facts such as the number of sales Ideal lost due to National’s tax practices, it is considerably easier to make the initial calculation of how much tax revenue the Anzas withheld from the State. There is no need to broaden the universe of actionable harms to permit RICO suits by parties who have been injured only indirectly.

 

The Court of Appeals reached a contrary conclusion, apparently reasoning that because the Anzas allegedly sought to gain a competitive advantage over Ideal, it is immaterial whether they took an indirect route to accomplish their goal. See 373 F. 3d, at 263. This rationale does not accord with Holmes. A RICO plaintiff cannot circumvent the proximate-cause requirement simply by claiming that the defendant’s aim was to increase market share at a competitor’s expense. See Associated Gen. Contractors, 459 U. S., at 537 (“We are also satisfied that an allegation of improper motive 461*461. . . is not a panacea that will enable any complaint to withstand a motion to dismiss”). When a court evaluates a RICO claim for proximate causation, the central question it must ask is whether the alleged violation led directly to the plaintiff’s injuries. In the instant case, the answer is no. We hold that Ideal’s § 1962(c) claim does not satisfy the requirement of proximate causation.

 

Petitioners alternatively ask us to hold, in line with the District Court’s decision granting petitioners’ motion to dismiss, that a plaintiff may not assert a RICO claim predicated on mail fraud or wire fraud unless it demonstrates it relied on the defendant’s misrepresentations. They argue that RICO’s private right of action must be interpreted in light of common-law principles, and that at common law a fraud action requires the plaintiff to prove reliance. Because Ideal has not satisfied the proximate-cause requirement articulated in Holmes, we have no occasion to address the substantial question whether a showing of reliance is required. Cf. 503 U. S., at 275-276.

 

 

III

 

 

The amended complaint also asserts a RICO claim based on a violation of § 1962(a). The claim alleges petitioners’ tax scheme provided them with funds to open a new store in the Bronx, which attracted customers who otherwise would have purchased from Ideal.

 

In this Court petitioners contend that the proximate-cause analysis should function identically for purposes of Ideal’s § 1962(c) claim and its § 1962(a) claim. (Petitioners also contend that “a civil RICO plaintiff does not plead an injury proximately caused by a violation of § 1962(a) merely by alleging that a corporate defendant reinvested profits back into itself,” Brief for Petitioners 20, n. 5, but this argument has not been developed, and we decline to address it.) It is true that private actions for violations of § 1962(a), like actions for violations of § 1962(c), must be asserted under 462*462 § 1964(c). It likewise is true that a claim is cognizable under § 1964(c) only if the defendant’s alleged violation proximately caused the plaintiff’s injury. The proximate-cause inquiry, however, requires careful consideration of the “relation between the injury asserted and the injurious conduct alleged.” Holmes, supra, at 268. Because § 1962(c) and § 1962(a) set forth distinct prohibitions, it is at least debatable whether Ideal’s two claims should be analyzed in an identical fashion for proximate-cause purposes.

 

The Court of Appeals held that Ideal adequately pleaded its § 1962(a) claim, see 373 F. 3d, at 264, but the court did not address proximate causation. We decline to consider Ideal’s § 1962(a) claim without the benefit of the Court of Appeals’ analysis, particularly given that the parties have devoted nearly all their attention in this Court to the § 1962(c) claim. We therefore vacate the Court of Appeals’ judgment with respect to Ideal’s § 1962(a) claim. On remand, the court should determine whether petitioners’ alleged violation of § 1962(a) proximately caused the injuries Ideal asserts.

 

 

* * *

 

 

The judgment of the Court of Appeals is reversed in part and vacated in part. The case is remanded for further proceedings consistent with this opinion.

 

 

JUSTICE KENNEDY delivered the opinion of the Court.

 

The Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U. S. C. §§ 1961-1968 (2000 ed. and Supp. III), prohibits certain conduct involving a “pattern of racketeering activity.” § 1962 (2000 ed.). One of RICO’s enforcement mechanisms is a private right of action, available to “[a]ny person injured in his business or property by reason of a violation” of RICO’s substantive restrictions. § 1964(c).

 

In Holmes v. Securities Investor Protection Corporation, 503 U. S. 258, 268 (1992), this Court held that a plaintiff may sue under § 1964(c) only if the alleged RICO violation was the proximate cause of the plaintiff’s injury. The instant case requires us to apply the principles discussed in Holmes to a dispute between two competing businesses.

 

 

I

 

 

Because this case arises from a motion to dismiss, we accept as true the factual allegations in the amended complaint. See Leatherman v. Tarrant County Narcotics Intelligence and Coordination Unit, 507 U. S. 163, 164 (1993).

 

Respondent Ideal Steel Supply Corporation (Ideal) sells steel mill products along with related supplies and services. It operates two store locations in New York, one in Queens and the other in the Bronx. Petitioner National Steel Supply, 454*454 Inc. (National), owned by petitioners Joseph and Vincent Anza, is Ideal’s principal competitor. National offers a similar array of products and services, and it, too, operates one store in Queens and one in the Bronx.

 

Ideal sued petitioners in the United States District Court for the Southern District of New York. It claimed petitioners were engaged in an unlawful racketeering scheme aimed at “gain[ing] sales and market share at Ideal’s expense.” App. 7. According to Ideal, National adopted a practice of failing to charge the requisite New York sales tax to cashpaying customers, even when conducting transactions that were not exempt from sales tax under state law. This practice allowed National to reduce its prices without affecting its profit margin. Petitioners allegedly submitted fraudulent tax returns to the New York State Department of Taxation and Finance in an effort to conceal their conduct.

 

Ideal’s amended complaint contains, as relevant here, two RICO claims. The claims assert that petitioners, by submitting the fraudulent tax returns, committed various acts of mail fraud (when they sent the returns by mail) and wire fraud (when they sent them electronically). See 18 U. S. C. §§ 1341, 1343 (2000 ed., Supp. III). Mail fraud and wire fraud are forms of “racketeering activity” for purposes of RICO. § 1961(1)(B). Petitioners’ conduct allegedly constituted a “pattern of racketeering activity,” see § 1961(5) (2000 ed.), because the fraudulent returns were submitted on an ongoing and regular basis.

 

Ideal asserts in its first cause of action that Joseph and Vincent Anza violated § 1962(c), which makes it unlawful for “any person employed by or associated with any enterprise engaged in, or the activities of which affect, 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 or collection of unlawful debt.” The complaint states that the Anzas’ goal, which 455*455 they achieved, was to give National a competitive advantage over Ideal.

 

The second cause of action is asserted against all three petitioners. It alleges a violation of § 1962(a), which makes it unlawful for any person who has received income derived from a pattern of racketeering activity “to use or invest” that income “in acquisition of any interest in, or the establishment or operation of,” an enterprise engaged in or affecting interstate or foreign commerce. As described in the complaint, petitioners used funds generated by their fraudulent tax scheme to open National’s Bronx location. The opening of this new facility caused Ideal to lose “significant business and market share.” App. 18.

 

Petitioners moved to dismiss Ideal’s complaint under Federal Rules of Civil Procedure 12(b)(6) and 9(b). The District Court granted the Rule 12(b)(6) motion, holding that the complaint failed to state a claim upon which relief could be granted. The court began from the proposition that to assert a RICO claim predicated on mail fraud or wire fraud, a plaintiff must have relied on the defendant’s misrepresentations. Ideal not having alleged that it relied on petitioners’ false tax returns, the court concluded Ideal could not go forward with its RICO claims.

 

Ideal appealed, and the Court of Appeals for the Second Circuit vacated the District Court’s judgment. 373 F. 3d 251 (2004). Addressing Ideal’s § 1962(c) claim, the court held that where a complaint alleges a pattern of racketeering activity “that was intended to and did give the defendant a competitive advantage over the plaintiff, the complaint adequately pleads proximate cause, and the plaintiff has standing to pursue a civil RICO claim.” Id., at 263. This is the case, the court explained, “even where the scheme depended on fraudulent communications directed to and relied on by a third party rather than the plaintiff.” Ibid.

 

The court reached the same conclusion with respect to Ideal’s § 1962(a) claim. It reasoned that Ideal adequately 456*456 pleaded its claim because it alleged an injury by reason of petitioners’ use and investment of racketeering proceeds, “as distinct from injury traceable simply to the predicate acts of racketeering alone or to the conduct of the business of the enterprise.” Id., at 264.

 

We granted certiorari. 546 U. S. 1029 (2005).

 

 

II

 

 

Our analysis begins—and, as will become evident, largely ends—with Holmes. That case arose from a complaint filed by the Securities Investor Protection Corporation (SIPC), a private corporation with a duty to reimburse the customers of registered broker-dealers who became unable to meet their financial obligations. SIPC claimed that the petitioner, Robert Holmes, conspired with others to manipulate stock prices. When the market detected the fraud, the share prices plummeted, and the “decline caused [two] broker-dealers’ financial difficulties resulting in their eventual liquidation and SIPC’s advance of nearly $13 million to cover their customers’ claims.” 503 U. S., at 262, 263. SIPC sued on several theories, including that Holmes participated in the conduct of an enterprise’s affairs through a pattern of racketeering activity in violation of § 1962(c) and conspired to do so in violation of § 1962(d).

 

The Court held that SIPC could not maintain its RICO claims against Holmes for his alleged role in the scheme. The decision relied on a careful interpretation of § 1964(c), which provides a civil cause of action to persons injured “by reason of” a defendant’s RICO violation. The Court recognized the phrase “by reason of” could be read broadly to require merely that the claimed violation was a “but for” cause of the plaintiff’s injury. Id., at 265-266. It rejected this reading, however, noting the “unlikelihood that Congress meant to allow all factually injured plaintiffs to recover.” Id., at 266.

 

457*457 Proper interpretation of § 1964(c) required consideration of the statutory history, which revealed that “Congress modeled § 1964(c) on the civil-action provision of the federal anti-trust laws, § 4 of the Clayton Act.” Id., at 267. In Associated Gen. Contractors of Cal., Inc. v. Carpenters, 459 U. S. 519 (1983), the Court held that “a plaintiff’s right to sue under § 4 required a showing that the defendant’s violation not only was a `but for’ cause of his injury, but was the proximate cause as well.” Holmes, supra, at 268 (citing Associated Gen. Contractors, supra, at 534). This reasoning, the Court noted in Holmes, “applies just as readily to § 1964(c).” 503 U. S., at 268.

 

The Holmes Court turned to the common-law foundations of the proximate-cause requirement, and specifically the “demand for some direct relation between the injury asserted and the injurious conduct alleged.” Ibid. It concluded that even if SIPC were subrogated to the rights of certain aggrieved customers, the RICO claims could not satisfy this requirement of directness. The deficiency, the Court explained, was that “the link is too remote between the stock manipulation alleged and the customers’ harm, being purely contingent on the harm suffered by the broker-dealers.” Id., at 271.

 

Applying the principles of Holmes to the present case, we conclude Ideal cannot maintain its claim based on § 1962(c). Section 1962(c), as noted above, forbids conducting or participating in the conduct of an enterprise’s affairs through a pattern of racketeering activity. The Court has indicated the compensable injury flowing from a violation of that provision “necessarily is the harm caused by predicate acts sufficiently related to constitute a pattern, for the essence of the violation is the commission of those acts in connection with the conduct of an enterprise.” Sedima, S. P. R. L. v. Imrex Co., 473 U. S. 479, 497 (1985).

 

Ideal’s theory is that Joseph and Vincent Anza harmed it by defrauding the New York tax authority and using the 458*458 proceeds from the fraud to offer lower prices designed to attract more customers. The RICO violation alleged by Ideal is that the Anzas conducted National’s affairs through a pattern of mail fraud and wire fraud. The direct victim of this conduct was the State of New York, not Ideal. It was the State that was being defrauded and the State that lost tax revenue as a result.

 

The proper referent of the proximate-cause analysis is an alleged practice of conducting National’s business through a pattern of defrauding the State. To be sure, Ideal asserts it suffered its own harms when the Anzas failed to charge customers for the applicable sales tax. The cause of Ideal’s asserted harms, however, is a set of actions (offering lower prices) entirely distinct from the alleged RICO violation (defrauding the State). The attenuation between the plaintiff’s harms and the claimed RICO violation arises from a different source in this case than in Holmes, where the alleged violations were linked to the asserted harms only through the broker-dealers’ inability to meet their financial obligations. Nevertheless, the absence of proximate causation is equally clear in both cases.

 

This conclusion is confirmed by considering the directness requirement’s underlying premises. See 503 U. S., at 269-270. One motivating principle is the difficulty that can arise when a court attempts to ascertain the damages caused by some remote action. See id., at 269 (“[T]he less direct an injury is, the more difficult it becomes to ascertain the amount of a plaintiff’s damages attributable to the violation, as distinct from other, independent, factors”). The instant case is illustrative. The injury Ideal alleges is its own loss of sales resulting from National’s decreased prices for cashpaying customers. National, however, could have lowered its prices for any number of reasons unconnected to the asserted pattern of fraud. It may have received a cash inflow from some other source or concluded that the additional sales would justify a smaller profit margin. Its lowering of prices 459*459 in no sense required it to defraud the state tax authority. Likewise, the fact that a company commits tax fraud does not mean the company will lower its prices; the additional cash could go anywhere from asset acquisition to research and development to dividend payouts. Cf. id., at 271 (“The broker-dealers simply cannot pay their bills, and only that intervening insolvency connects the conspirators’ acts to the losses suffered by the nonpurchasing customers and general creditors”).

 

There is, in addition, a second discontinuity between the RICO violation and the asserted injury. Ideal’s lost sales could have resulted from factors other than petitioners’ alleged acts of fraud. Businesses lose and gain customers for many reasons, and it would require a complex assessment to establish what portion of Ideal’s lost sales were the product of National’s decreased prices. Cf. id., at 272-273 (“If the nonpurchasing customers were allowed to sue, the district court would first need to determine the extent to which their inability to collect from the broker-dealers was the result of the alleged conspiracy to manipulate, as opposed to, say, the broker-dealers’ poor business practices or their failures to anticipate developments in the financial markets”).

 

The attenuated connection between Ideal’s injury and the Anzas’ injurious conduct thus implicates fundamental concerns expressed in Holmes. Notwithstanding the lack of any appreciable risk of duplicative recoveries, which is another consideration relevant to the proximate-cause inquiry, see id., at 269, these concerns help to illustrate why Ideal’s alleged injury was not the direct result of a RICO violation. Further illustrating this point is the speculative nature of the proceedings that would follow if Ideal were permitted to maintain its claim. A court considering the claim would need to begin by calculating the portion of National’s price drop attributable to the alleged pattern of racketeering activity. It next would have to calculate the portion of Ideal’s lost sales attributable to the relevant part of the price drop. 460*460 The element of proximate causation recognized in Holmes is meant to prevent these types of intricate, uncertain inquiries from overrunning RICO litigation. It has particular resonance when applied to claims brought by economic competitors, which, if left unchecked, could blur the line between RICO and the antitrust laws.

 

The requirement of a direct causal connection is especially warranted where the immediate victims of an alleged RICO violation can be expected to vindicate the laws by pursuing their own claims. See id., at 269-270 (“[D]irectly injured victims can generally be counted on to vindicate the law as private attorneys general, without any of the problems attendant upon suits by plaintiffs injured more remotely”). Again, the instant case is instructive. Ideal accuses the Anzas of defrauding the State of New York out of a substantial amount of money. If the allegations are true, the State can be expected to pursue appropriate remedies. The adjudication of the State’s claims, moreover, would be relatively straightforward; while it may be difficult to determine facts such as the number of sales Ideal lost due to National’s tax practices, it is considerably easier to make the initial calculation of how much tax revenue the Anzas withheld from the State. There is no need to broaden the universe of actionable harms to permit RICO suits by parties who have been injured only indirectly.

 

The Court of Appeals reached a contrary conclusion, apparently reasoning that because the Anzas allegedly sought to gain a competitive advantage over Ideal, it is immaterial whether they took an indirect route to accomplish their goal. See 373 F. 3d, at 263. This rationale does not accord with Holmes. A RICO plaintiff cannot circumvent the proximate-cause requirement simply by claiming that the defendant’s aim was to increase market share at a competitor’s expense. See Associated Gen. Contractors, 459 U. S., at 537 (“We are also satisfied that an allegation of improper motive 461*461. . . is not a panacea that will enable any complaint to withstand a motion to dismiss”). When a court evaluates a RICO claim for proximate causation, the central question it must ask is whether the alleged violation led directly to the plaintiff’s injuries. In the instant case, the answer is no. We hold that Ideal’s § 1962(c) claim does not satisfy the requirement of proximate causation.

 

Petitioners alternatively ask us to hold, in line with the District Court’s decision granting petitioners’ motion to dismiss, that a plaintiff may not assert a RICO claim predicated on mail fraud or wire fraud unless it demonstrates it relied on the defendant’s misrepresentations. They argue that RICO’s private right of action must be interpreted in light of common-law principles, and that at common law a fraud action requires the plaintiff to prove reliance. Because Ideal has not satisfied the proximate-cause requirement articulated in Holmes, we have no occasion to address the substantial question whether a showing of reliance is required. Cf. 503 U. S., at 275-276.

 

 

III

 

 

The amended complaint also asserts a RICO claim based on a violation of § 1962(a). The claim alleges petitioners’ tax scheme provided them with funds to open a new store in the Bronx, which attracted customers who otherwise would have purchased from Ideal.

 

In this Court petitioners contend that the proximate-cause analysis should function identically for purposes of Ideal’s § 1962(c) claim and its § 1962(a) claim. (Petitioners also contend that “a civil RICO plaintiff does not plead an injury proximately caused by a violation of § 1962(a) merely by alleging that a corporate defendant reinvested profits back into itself,” Brief for Petitioners 20, n. 5, but this argument has not been developed, and we decline to address it.) It is true that private actions for violations of § 1962(a), like actions for violations of § 1962(c), must be asserted under 462*462 § 1964(c). It likewise is true that a claim is cognizable under § 1964(c) only if the defendant’s alleged violation proximately caused the plaintiff’s injury. The proximate-cause inquiry, however, requires careful consideration of the “relation between the injury asserted and the injurious conduct alleged.” Holmes, supra, at 268. Because § 1962(c) and § 1962(a) set forth distinct prohibitions, it is at least debatable whether Ideal’s two claims should be analyzed in an identical fashion for proximate-cause purposes.

 

The Court of Appeals held that Ideal adequately pleaded its § 1962(a) claim, see 373 F. 3d, at 264, but the court did not address proximate causation. We decline to consider Ideal’s § 1962(a) claim without the benefit of the Court of Appeals’ analysis, particularly given that the parties have devoted nearly all their attention in this Court to the § 1962(c) claim. We therefore vacate the Court of Appeals’ judgment with respect to Ideal’s § 1962(a) claim. On remand, the court should determine whether petitioners’ alleged violation of § 1962(a) proximately caused the injuries Ideal asserts.

 

 

* * *

 

 

The judgment of the Court of Appeals is reversed in part and vacated in part. The case is remanded for further proceedings consistent with this opinion.

 

It is so ordered.

It is so ordered.

Handling RICO Litigation

My office handles both civil and criminal litigation under the RICO statute, for both plaintiffs and defendants.   Let me make some observations about RICO practice.

1. Any RICO plaintiff should expect a motion to dismiss.   Many of these cases involve fraud.  Clients may assume that pleading the existence of a fraud and explaining how the client has been damaged will be sufficient.   It’s not.  The plaintiff must identify the date, time, and place of any false or deceptive statements, and what each defendant did.  Do not lump together multiple defendants together and assume that will be sufficient because it won’t.

2. Criminal defense of the peripheral defendant  Frequently the defendant is put in the position of having the defendant testify and face grueling cross-examination, or put forth a limited defense.