This chapter shall be known and may be cited as the "Georgia RICO (Racketeer Influenced and Corrupt Organizations) Act."
(Code 1933, § 26-3401, enacted by Ga. L. 1980, p. 405, § 1; Ga. L. 2015, p. 693, § 2-25/HB 233.)
Editor's notes.- Ga. L. 2015, p. 693, § 2-25/HB 233, effective July 1, 2015, reenacted this Code section without change.
Ga. L. 2015, p. 693, § 4-1/HB 233, not codified by the General Assembly, provides that: "This Act shall become effective on July 1, 2015, and shall apply to seizures of property for forfeiture that occur on or after that date. Any such seizure that occurs before July 1, 2015, shall be governed by the statute in effect at the time of such seizure."
Law reviews.- For survey article on trial practice and procedure, see 59 Mercer L. Rev. 423 (2007). For survey article on tort law, see 60 Mercer L. Rev. 375 (2008). For article on the 2015 amendment of this Code section, see 32 Ga. St. U.L. Rev. 1 (2015).
JUDICIAL DECISIONS
Proof of theft by deception as predicate act.
- Civil fraud and theft by deception have different elements and showing that there are jury issues as to fraud does not necessarily show that there are jury issues as to theft by deception; a failure to show the level of intent needed for proving theft by deception would preclude a jury issue on that crime as a predicate act for RICO purposes, defeating a RICO claim. Avery v. Chrysler Motors Corp., 214 Ga. App. 602, 448 S.E.2d 737 (1994).
Unconstitutionality of in personam forfeiture proceeding.
- In an in personam forfeiture proceeding, pursuant to the Racketeer Influenced and Corrupt Organizations Act, O.C.G.A. § 16-14-1 et seq., a trial court erred by finding that the civil procedural rules set forth in the Georgia Civil Practice Act, O.C.G.A. § 9-11-1 et seq., were an adequate substitute for the substantive constitutional rights to which the property owners were entitled. As a result, the Supreme Court of Georgia held that O.C.G.A. § 16-14-7(m) was unconstitutional because the law deprived in personam forfeiture defendants of the safeguards of criminal procedure guaranteed by the United States and Georgia Constitutions. Cisco v. State, 285 Ga. 656, 680 S.E.2d 831 (2009).
Standing.
- In a case arising from a settlement and release agreement in which an insured appealed a district court's entry of summary judgment in favor of a former insurer because the insured could not show the purported conspiracy harmed the insured in any cognizable manner, the insured did not have standing for a conspiracy claim under Georgia's RICO Act, O.C.G.A. § 16-14-1 et seq. Rosen v. Am. Guar. & Liab. Ins. Co., F.3d (11th Cir. 2013)(Unpublished).
Statute of limitations violated.
- Defendant's convictions for theft by conversion and a RICO violation were reversed because the state failed to carry the state's burden to prove that the defendant was indicted on the counts within the applicable statutes of limitation as the evidence showed that the victims, and therefore the state, had actual knowledge of the offenses more than five years prior to the June 12, 2009 indictment, and the state produced no evidence or argument to the contrary. Jannuzzo v. State, 322 Ga. App. 760, 746 S.E.2d 238 (2013).
Preponderance of evidence required.
- Trial court erred in a bifurcated suit asserting a claim of illegal insurance sales under the Georgia Racketeer Influenced and Corrupt Organizations Act (Georgia RICO), O.C.G.A. § 16-14-1 et seq., by instructing the jury that the suing passenger of a cab was required to prove the asserted Georgia RICO claims against two cab companies by clear and convincing evidence as the proper standard of proof to have been applied was a preponderance of the evidence. Am. Ass'n of Cab Cos. v. Parham, 291 Ga. App. 33, 661 S.E.2d 161 (2008), cert. denied, No. S08C1409, 2008 Ga. LEXIS 690, cert. granted, No. S08G1410, No. S08C1409, 2008 Ga. LEXIS cert. granted, No. S08G1410, 2008 Ga. LEXIS 728 (Ga. 2008).
Elements of claim sufficiently pled.- Creditor sufficiently pled federal and state (Georgia) RICO claim based on the debtor having conducted or participated, directly or indirectly, in the conduct or affairs of an enterprise when, generally, it was alleged that the debtor used legitimate residential and commercial construction companies as a means of inducing unsuspecting customers to pay over large monthly wire transfers that were purportedly being used to pay subcontractors and suppliers but that instead were wrongfully misdirected for benefit of the enterprise with those funds being laundered through placement companies. Vanbenschoten v. Turner (In re Turner), Bankr. (Bankr. S.D. Ga. Mar. 31, 2017).
Indictment insufficient.
- Sparse allegations in the indictment for violation of the Georgia Racketeer Influence and Corrupt Organizations Act, O.C.G.A. § 16-14-1 et seq., which said nothing at all about the nature of the connection, was insufficient to enable the defendants to prepare for trial; accordingly, the special demurrers by the defendants ought to have been sustained. Kimbrough v. State, 300 Ga. 878, 799 S.E.2d 229 (2017).
Amended complaint alleging violation of Georgia RICO Act granted.
- In an action in which an interexchange carrier asserted it was not obligated to pay fees to a local carrier for misrepresented toll-free cell calls, it's amendment to add claims alleging violations under the Georgia RICO Act, O.C.G.A. § 16-14-1 et seq., common law fraud, and the Uniform Deceptive Trade Practices Act, O.C.G.A. § 10-1-370 et seq., was not futile given the court's denial of summary judgment on the local carrier's counterclaims; thus, amendment under Fed. R. Civ. P. 15 was granted. ITC Deltacom Communs. v. US LEC Corp., F. Supp. 2d (N.D. Ga. Mar. 15, 2004).
Amended complaint related back.- Creditor's federal and state (Georgia) racketeering claims related back to the creditor's original complaint, which attempted to set forth allegations regarding the debtor's fraudulent misappropriation of funds that should have been used to pay the subcontractors that had performed work on the creditor's home. Although the amended complaint alleged fraudulent conduct on a larger scale, it still arose out of the same operative facts set forth in the original complaint, and the initial allegations of fraud provided sufficient notice that the debtor's alleged conduct could result in a related racketeering claim. Vanbenschoten v. Turner (In re Turner), Bankr. (Bankr. S.D. Ga. Mar. 31, 2017).
Action against transferee of franchise failed.
- Trial court erred by failing to grant a succeeding franchisee's motion for summary judgment in a fraud suit brought by car dealership consumers as the consumers failed to establish the succeeding franchisee's participation or involvement in any of the complained of transactions; thus, no unfair business violations were established, and no direct claim against a transferee was permitted under the Bulk Transfer Act, O.C.G.A. § 11-6-101 et seq. Additionally, the consumers' claims under Georgia's Racketeer Influenced and Corrupt Organizations statute, O.C.G.A. § 16-14-1 et seq., likewise failed since the uncontroverted evidence established without question that the succeeding franchisee did not make any misrepresentations to the consumers nor participated in any of the transactions that formed the basis of the consumers' claims. Summit Auto. Group, LLC v. Clark Kia Motors Ame., Inc., 298 Ga. App. 875, 681 S.E.2d 681 (2009).
Action against land bank grantee failed.
- Developer's Georgia Racketeer Influenced and Corrupt Organizations Act, O.C.G.A. § 16-14-1 et seq., claim against a grantee of property from the Land Bank failed. Even taking all the allegations of bribery, fraudulent statements, and other misdeeds as true, the developer was a mere applicant for a grant of the property so the developer could not show direct harm from the Land Bank's transfer of the property to the grantee instead. Tribeca Homes, LLC v. Marathon Inv. Corp., 322 Ga. App. 596, 745 S.E.2d 806 (2013).
RICO claim against non-debtor defendants not property of bankruptcy estate.
- Bankruptcy court properly lifted the automatic stay so that a creditor could pursue a Georgia Racketeer Influenced and Corrupt Organizations Act (Georgia RICO), O.C.G.A. § 16-14-1 et seq., action against the non-debtor defendants because the trustee was barred by the doctrine of in pari delicto from asserting a Georgia RICO claim against the non-debtor defendants, so the creditor's Georgia RICO claim against the non-debtor defendants was not property of the bankruptcy estate under 11 U.S.C. § 541(a); further, because the Georgia RICO claim was neither actual nor potential property of the bankruptcy estate, 11 U.S.C. § 544 did not authorize the trustee to bring such a claim against the non-debtor defendants. Flatau v. Stewart (In re Stewart), 339 Bankr. 524 (M.D. Ga. 2006).
Claim against insurer not moot.
- Conclusion that the insured party's claims alleging fraud, breach of contract, and violations of the Georgia Racketeer Influenced and Corrupt Organizations Act, O.C.G.A. § 16-14-1 et seq., were rendered moot by application of the appraisal clause was contrary to law; this would have converted the appraisal clause into an arbitration clause, which would have been impermissible under O.C.G.A. § 9-9-2(c)(3) in contracts between insured parties and insurers. McGowan v. Progressive Preferred Ins. Co., 281 Ga. 169, 637 S.E.2d 27 (2006).
Failure to establish claims upon which racketerring claims were predicated.
- Because a contractor failed to establish claims of fraud and conversion upon which the contractor's racketeering claims were predicated, the contractor's racketeering claims failed as a matter of law. J. Kinson Cook of Ga., Inc. v. Heery/Mitchell, 284 Ga. App. 552, 644 S.E.2d 440 (2007).
Plaintiff mortgage company's motion to remand the company's action to state court was granted because the company's assertion of violations of federal criminal law as predicate acts to a Georgia RICO Act claim were not sufficiently substantial to confer federal question jurisdiction. Neighborhood Mortg., Inc. v. Fegans, F. Supp. 2d (N.D. Ga. Aug. 28, 2007).
Plaintiff subcontractor's Georgia Racketeer Influenced and Corrupt Organizations Act, O.C.G.A. § 16-14-1 et seq., claims against defendants, plaintiff's supplier, a competitor, and a government procuring agent, based on wire fraud, mail fraud, and Hobbs Act violations failed on causation since a fraud in bids to the government did not proximately cause the injury the subcontractor sustained by being at a competitive disadvantage. G&G TIC, LCC v. Ala. Controls, Inc., F.3d (11th Cir. 2009)(Unpublished).
Mortgage borrower failed to state a claim against a loan servicer under Georgia's Racketeer Influenced and Corrupt Organizations Act, O.C.G.A. § 16-14-1 et seq.; the borrower failed to plead any predicate act with the required specificity. Stroman v. Bank of Am. Corp., 852 F. Supp. 2d 1366 (N.D. Ga. 2012).
In a case arising from a settlement and release agreement in which an insured appealed a district court's entry of summary judgment in favor of a former insurer, because the insured was unable to create a genuine issue of material fact that the insurer had the lesser intent to commit civil fraud, it followed that the insured was also unable to create a genuine issue of material fact that the insurer had the intent to commit any predicate acts under Georgia's RICO Act, O.C.G.A. § 16-14-1 et seq. Rosen v. Am. Guar. & Liab. Ins. Co., F.3d (11th Cir. 2013)(Unpublished).
Fifth Amendment claim denied.
- Denial of an accused's motion for a protective order under O.C.G.A. § 9-11-26(c) was affirmed as the Fifth Amendment could not be used to justify a protective order to stay all discovery in the accused's civil forfeiture proceeding under O.C.G.A. § 16-14-7 pending the conclusion of the accused's criminal Georgia Racketeer Influenced and Corrupt Organizations Act, O.C.G.A. § 16-14-1 et seq., case; while the privilege against self-incrimination extends to answers creating a "real and appreciable" danger of establishing a link in the chain of evidence needed to prosecute, the trial court has to determine if the answers could incriminate the witness, and if the trial court determines that the answers could not incriminate the witness, the witness has to testify or be subject to the court's sanction. Chumley v. State of Ga., 282 Ga. App. 117, 637 S.E.2d 828 (2006).
Contracts and merger clauses.
- While plaintiff borrower's complaint alleged an alleged tax-favorable loan was represented as long-term but defendant lenders called it after one year, all oral representations forming the basis of a Georgia Racketeer Influenced and Corrupt Organizations Act, O.C.G.A. § 16-14-1 et seq., claim merged into the contract by a merger clause and were not binding since the contract reserved a right to demand repayment annually. Curtis Inv. Co., LLC v. Bayerische Hypo-Und Vereinsbank, AG, F.3d (11th Cir. 2009)(Unpublished).
Fraudulent transfer not predicate act.
- Trial court erred by failing to dismiss the plaintiff's claim for theft as a predicate offense under the Georgia RICO statute, O.C.G.A. § 16-14-1 et seq., because a fraudulent transfer was not an enumerated predicate offense under the Georgia RICO statute, but instead, a civil tort governed by the Uniform Voidable Transactions Act, O.C.G.A. § 18-2-70 et seq. Z-Space, Inc. v. Dantanna's CNN Center, LLC, 349 Ga. App. 248, 825 S.E.2d 628 (2019).
RICO not violated by hospitals using chargemaster rates.
- Supreme court overrules Clouthier v. Med. Center of Central Ga., Inc., 351 Ga. App. 883 (2019), and Aguila v. Kennestone Hosp., 353 Ga. App. 17 (2019), to the extent that those cases hold that viable claims for fraud, negligent representation, and violations of the Georgia Racketeer Influenced and Corrupt Organizations Act, O.C.G.A. § 16-14-1 et seq., can be maintained against hospitals that properly file liens based on standard chargemaster rates that reflect true market considerations such as hospital costs. Bowden v. The Medical Center, Inc., Ga. , 845 S.E.2d 555 (2020).
Cited in Duracell, Inc. v. SW Consultants, Inc., 126 F.R.D. 571 (N.D. Ga. 1989); Russell Corp. v. BancBoston Fin. Co., 209 Ga. App. 660, 434 S.E.2d 716 (1993); Fryer v. Easy Money Title Pawn, Inc., 172 Bankr. 1020 (Bankr. S.D. Ga. 1994); Conklin v. Zant, 216 Ga. App. 357, 454 S.E.2d 159 (1995); Security Life Ins. Co. of Am. v. Clark, 273 Ga. 44, 535 S.E.2d 234 (2000); Williams Gen. Corp. v. Stone, 279 Ga. 428, 614 S.E.2d 758 (2005); Great Am. Ins. Co. v. Davis (In re Davis), Bankr. (Bankr. N.D. Ga. Sept. 20, 2007); PricewaterhouseCoopers, LLP v. Bassett, 293 Ga. App. 274, 666 S.E.2d 721 (2008); Constantino v. Warren, 285 Ga. 851, 684 S.E.2d 601 (2009); Cox v. Mayan Lagoon Estates Ltd., 319 Ga. App. 101, 734 S.E.2d 883 (2012); Harper v. State, 292 Ga. 557, 738 S.E.2d 584 (2013); Southern States-Bartow County, Inc. v. Riverwood Farm Prop. Owners Ass'n, Inc., 331 Ga. App. 878, 769 S.E.2d 823 (2015); Sager v. Ivy Falls Plantation Homeowners Association, Inc., 339 Ga. App. 111, 793 S.E.2d 455 (2016); Stewart Ausband Enters. v. Holden, 349 Ga. App. 295, 826 S.E.2d 138 (2019); In the Matter of Farmer, 307 Ga. 307, 835 S.E.2d 629 (2019).
RESEARCH REFERENCES
ALR.
- Criminal prosecutions under state RICO statutes for engaging in organized criminal activity, 89 A.L.R.5th 629.
Validity of criminal state Racketeer Influenced and Corrupt Organizations Acts and similar acts related to gang activity and the like, 58 A.L.R.6th 385.
Validity, construction, and application of RICO Act, Supreme Court cases, 171 A.L.R. Fed. 1
Construction and application of enhanced sentencing provision of Armed Career Criminal Act (ACCA), 18 U.S.C.A. § 924(e) - United States Supreme Court cases, 67 A.L.R. Fed. 2d 1.
Statute of limitations in civil actions for damages under the Racketeer Influence and Corrupt Organizations Act (RICO), 18 USCA §§ 1961-1968, 156 A.L.R. Fed. 361.