Applying Older Standards, District Court Finds That U.S. Alleged Fraud Had Sufficient Links With U.S. to Support RICO Claim

The World in U.S. Courts: Fall 2014 - Racketeer Influenced and Corrupt Organizations Act (RICO) | September.02.2014

Tatung Co., Ltd. v. Hsu, U.S. District Court for the Central District of California, September 2, 2014

Plaintiff Tatung in this complicated and long-running case is a Chinese manufacturer that claims to have been defrauded by multiple defendants and defendant families.  Among other claims, Tatung alleged that various Chinese companies and individuals committed RICO violations in connection with the alleged fraud.  The defendants argued that the activities they were alleged to have taken did not occur in the U.S., and that RICO should not apply.  The Court disagreed, noting that the conduct alleged included the fraudulent diversion of funds from one U.S. corporation to another, and that this satisfied the requirement that there be "some degree of connection between the fraud and conduct in, or effects on" the U.S.  The Court relied upon relatively older cases and did not review any of the more recent authority articulating different specific tests for the extraterritorial application of RICO.

[Editor's Note: The Tatung Co., Ltd. case is also addressed in the Personal Jurisdiction section of this report.]

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