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Administrative Developments: Civil Cause of Action under RICO Requires Tortious Act—Beck v. Prupis
Published online by Cambridge University Press: 01 January 2021
Extract
The U.S. Supreme Court held 7-2 that an individual harmed by an overt act that is not tortious under the Racketeer Influenced and Corrupt Organizations Act (RICO) does not have a civil cause of action under RICO. Therefore, an individual terminated from his job in furtherance of a racketeering conspiracy does not have a civil cause of action, since such termination is not an “independently wrongful” act under RICO.
The plaintiff, Robert Beck, was the president, CEO, director, and shareholder of Southeastern Insurance Group (SIG). The defendants, including Ronald Prupis, were senior officers and directors of SIG. In 1998, the plaintiff discovered that the defendants were engaged in racketeering. The racketeering activities included refusing to qualify contractors for SIG surety bonds unless they paid fees to SIG; diverting corporate funds for their personal use; and providing regulators, shareholders, and creditors with false financial statements.
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- Copyright © American Society of Law, Medicine and Ethics 2000
References
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