RICO Claim Alleging Underlying Workers Compensation Fraud Dismissed

A Federal Judge dismissed a case where the alleged misrepresentation of employment status in an underlying State court workers’ compensation case was pleaded as an alleged basis  of a RICO (Racketeer Influenced and Corrupt Organizations Act) action18 U.S.C. § 1961(c). The court held that a federal racketeering action, filed as a RICO action arising  out of a workers’ compensation claim utilizing mail and wire, must demonstrate multiple verifiable activity of facts demonstrating fraudulent action in order to sustain the burden of proof.

The Court reasoned:

"It is well established that “misrepresentations of the law are not actionable as fraud, including under the mail and wire fraud statutes because statements of the law are considered merely opinions and may not be relied upon absent special circumstances.” Sosa v. DIRECTV, Inc., 437 F.3d 616, 621 (9th Cir.2006). Therefore, Plaintiff’s allegations that the Macedos Defendants committed wire and mail fraud by virtue of falsely claiming that Defendant Jose Moreira was an employee of the Macedos Construction Co., Inc. in order obtain Workers’ Compensation benefits is not actionable as mail and wire fraud."

Virginia Sur. Co., Inc. v. Macedo, Slip Copy-Unpublished, 2009 WL 3230909, D.N.J., September 30, 2009 (NO. CIV.A.08-5586JAG)

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