The World in U.S. Courts: Fall 2013 - Racketeer Influenced and Corrupt Organizations Act (RICO) | July.30.2013
In a civil RICO racketeering case, Defendants moved to dismiss the RICO claims as extraterritorial because their alleged conduct to defraud the Mexican government took place in Mexico. Under governing law, the RICO statute does not apply extraterritorially because the statute is silent on extraterritorial reach, meaning the presumption against extraterritoriality applies. Here, the District Court for the Southern District of New York agreed with the Defendants that the claims were extraterritorial because “they allege a foreign conspiracy against a foreign victim conducted by foreign defendants participating in foreign enterprises.” Although American corporations were involved in the financing of the project, it was a Mexican corporation that was defrauded by another Mexican corporation. As such, the Court dismissed the RICO claims.