Chile Motion

Case 1:09-cv-20612-ASG Document 39 Entered on FLSD Docket 10/01/2009 Page 1 of 31
UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA
CASE NO. 09-20612-CIV-GOLD/MCALILEY
CONSEJO DE DEFENSA DEL ESTADO

DE LA REPÚBLICA DE CHILE,
on behalf of the Republic of Chile,
v.
PNC FINANCIAL SERVICES GROUP, INC.,

and PNC BANK, N.A.,
_______________________________________/
Motion to Dismiss
Defendants PNC Financial Services Group, Inc. and PNC Bank, N.A. (together “PNC”)
move to dismiss the second amended complaint under Fed. R. Civ. P. 12(b)(6), stating:
Introduction
Chile’s Consejo de Defensa del Estado (“State Defense Council” or “CDE”) has now
filed its third complaint in a final effort to salvage its case despite very serious time-bar and
RICO pleading problems. CDE’s initial complaint and its first amended complaint pled three
counts of Federal RICO, one count for “aiding and abetting breach of fiduciary duty”
(supposedly under Chilean law), and three counts of Florida RICO, Fla. Stat. § 772.103. After
receiving our motion to dismiss and our strong Rule 11 letter, CDE dismissed everything except
its Florida RICO counts and filed a second amended complaint. Unfortunately for CDE, even
this latest amendment still cannot save this case from dismissal. This third complaint fails for
four reasons: (1) expiration of the statute of limitations; (2) failure to satisfy RICO’s “operation
or management” test; (3) failure to satisfy RICO’s “direct injury” requirement; and (4) failure to
satisfy RICO’s injury to “business or property” requirement.

3059 GRAND AVENUE, SUITE 340, COCONUT GROVE, FLORIDA 33133
I. CDE’s Florida RICO claims are time-barred.
Usually, the issue of limitations is not ripe until summary judgment or trial. When,
however, it is apparent from the face of the complaint that the claim is time-barred, the complaint
should be dismissed on a Rule 12 motion. Foster v. Savannah Commc’n, 140 F. App’x. 905, 907
(11th Cir. 2005) (affirming 12(b)(6) dismissal of False Claims Act claim on limitations grounds);
Steinberg v. A Analyst Ltd., No. 04-60898, 2009 WL 806780, at *8 (S.D. Fla. Mar. 26, 2009)
(Marra, J.) (dismissing claims under Florida’s fraudulent-transfer statute at Rule 12 stage on
limitations grounds).
a. The statute of limitations for Florida civil RICO is five years.
Florida civil RICO’s limitations period is five years:
Notwithstanding any other provision of law, a civil action or proceeding under

this chapter may be commenced at any time within 5 years after the conduct in
violation of a provision of this act terminates or the cause of action accrues.
Fla. Stat. § 772.17 (1986).
Despite allegations going back to the early 1980s, CDE waited until March 11, 2009 to
file this suit. Thus, to survive dismissal, CDE’s Florida RICO claims must have accrued after
March 11, 2004.


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b. Florida RICO claims accrue when the last element occurs, not when the claims
are discovered.
Florida civil RICO claims accrue upon the occurrence of the last act constituting the last
element of the cause of action.1 Davis v. Monahan, 832 So. 2d 708, 709 (Fla. 2002) (“The
Florida Legislature has stated that a cause of action accrues or begins to run when the last
element constituting the cause of action occurs.”). CDE avoids specifying a “last act,” perhaps
to avoid being pinned down on this point. As discussed below, even on a most generous reading
of CDE’s third complaint, the last possible act had to occur well before March 11, 2004.
After three complaints and a detailed Local Rule 12.1 Civil RICO Case Statement, CDE
still does not allege the occurrence of a single specific transaction in furtherance of the
alleged money-laundering scheme that took place after August 2002. The closest CDE gets to
alleging a transaction after March 11, 2004 are vague and non-specific references to events “in
2004” or account freezings and closures in 2004 (notably, without any allegation that those
accounts had any money in them at that time). This is fatal to this lawsuit.

1
Fla. Stat. § 95.031 states: “Except as provided in subsection (2) and in section 95.051, and
elsewhere in these statutes, the time within which an action shall be begun under any statute of
limitations runs from the time the cause of action accrues.” Fla. Stat. § 95.031 (2003). Section
95.031(1) clarifies that “[a] cause of action accrues when the last element constituting the cause
of action occurs.” Fla. Stat. § 95.031(1) (2003).


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Here are the most recent transactions alleged in CDE’s current complaint:
Allegation ¶
“In August 2002, Riggs closed the last Pinochet personal and corporate accounts 105
and wire-transferred the funds to Banco de Chile’s New York branch without
disclosing that the funds were suspect.”
“Following the freeze order issued in October 1998 and continuing through 2002, 84
numerous wire transfers and other transactions were processed through each of the
Pinochet owned or controlled accounts.”
“In all, spanning a period of 28 years,2 there were a total of 28 bank accounts at 69
Riggs Bank in Washington, Miami, and London that were linked to Pinochet and
into which approximately $8 million was deposited. The majority of these accounts
were closed in July 2002 (however the military account in the name Castillo Cadiz,
was not closed until 2004) . . . .”
“From 1981 to 2004, eight Riggs accounts opened in the names of Chilean military 383
officers served as conduits for the transfer of Reserved Funds and transmitted more
than $1.7 million to Pinochet related accounts.”
“Additionally, during the period from November 23, 1981 through April 29, 2004, 50
nine accounts were opened at Riggs Bank in Miami in the names of high-ranking
Chilean military officials or others who were linked to Pinochet . . . .”
“the most recent account remained active in London until July 2004” 73
“In fact, Riggs knowingly concealed 19 of the 28 Pinochet-related accounts from 120
federal regulators during the investigation that led to the publication of the 2004
Senate Report.”

2
Interestingly, paragraph 92 cuts the relationship short three years earlier, in favor of our
limitations position, calling it a “25-year banking relationship between Pinochet and Riggs.” 2d
Am. Compl. ¶ 92. See also id. ¶ 115 (“Riggs’ relationship with Pinochet spanned a total of 25
years”); Civil RICO Case Statement, at 5 (“25-year banking relationship”) [DE 12].
3
See also ¶ 62 (“Between 1981 and 2004, Riggs opened at least nine accounts . . . .”).


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The last three allegations on the chart are the closest CDE gets to pleading a transaction
after March 11, 2004. Tellingly, in the ¶¶ 50 and 73 allegations, CDE does not plead that any of
those nine accounts was actually opened on April 29, 2004, or what the activity actually was in
the “London account” that supposedly “remained active” until July 2004. Likewise, in the ¶ 120
allegation, CDE does not say whether Riggs’ alleged act(s) of concealment actually occurred in
2004, much less on a specific date or date-range in 2004 after March 11.
CDE’s Civil RICO Case Statement [DE 12] is no more exact. This Court’s Local Rule
12.1 specifically requires CDE, in its Civil RICO Case Statement (“[c]onsistent with counsel’s
obligations under Federal Rule of Civil Procedure 11 to make a reasonable inquiry prior to filing
a pleading”), to “provide in detail and with specificity . . . [a] description of the pattern of
racketeering / criminal activity [that] shall . . . separately state the dates of the predicate acts /
incidents of criminal activity.” S.D. Fla. Local Rule 12.1(5)(b) (2009) (emphasis added).
CDE’s response fails to list any act after 2002. See Civil RICO Case Statement, 21-25 [DE
12].4 The sole fair reading of the second amended complaint is that the only thing that Riggs did
to any Pinochet account after 2002 was close it or freeze it - - acts which are contrary to, not in
furtherance of, the alleged money-laundering and RICO conspiracies.

4
The RICO Case Statement is properly considered part of a plaintiff’s pleading on a 12(b)(6)
motion. See Super Vision Int’l, Inc. v. Mega Int’l Commerical Bank Co., 534 F. Supp. 2d 1326,
1331 n.2 (S.D. Fla. 2008) (Gold, J.).


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Despite the Local Rule’s clear command, a motion to dismiss [DE 23] and a Rule 11
letter, all squarely notifying CDE that they would be well-advised to specify some act post-
March 11, 2004 -- after three long complaints and a 39-page Civil RICO Case Statement, they
still have not specified one. As a result, they are time-barred.
c. Florida RICO claims do not benefit from a “delayed discovery rule.”
Florida RICO has a longer limitations period than Federal RICO (five years, instead of
four). This benefit comes with a limitation, however. Federal RICO claims do not accrue until
the plaintiff actually discovers her injury.5 In contrast (as discussed below), accrual of a Florida
RICO claim does not wait for discovery. The longer, five-year Florida RICO clock starts
running regardless of when the plaintiff gains this knowledge. Accordingly, while a Florida
RICO plaintiff benefits from a longer limitations period, unlike her federal counterpart she loses
the benefit of delaying accrual until discovery.
In Florida, five (and only five) causes of action delay accrual until discovery of the
injury: claims for products liability, fraud, claims for professional malpractice, claims for
medical malpractice, and intentional torts based on abuse. See Fla. Stat. §§ 95.031(2), 95.11(4)
and 95.11(7).6

5
The United States Supreme Court holds “that discovery of the injury, not discovery of the
other elements of a claim, is what starts the clock for a civil RICO claim.” Rotella v. Wood, 528
U.S. 549, 555 (2000).
6
Florida Statute Section 95.031 provides, in relevant part:
[a]n action founded upon fraud under s. 95.11(3) . . . must be begun within the
period prescribed in this chapter, with the period running from the time the facts
giving rise to the cause of action were discovered or should have been discovered


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The Florida Supreme Court has explained that the legislature’s list of claims benefiting
from the “delayed discovery doctrine” is exhaustive, not illustrative. Thus, all other claims
accrue upon the occurrence of the last element, not upon any delayed discovery. The Florida
Supreme Court could not be clearer on this point:
Aside from the [Fla. Stat. Ch. 95] provisions above for the delayed accrual of a
cause of action in cases of fraud, products liability, professional and medical
malpractice, and intentional torts based on abuse, there is no other statutory basis
for the delayed discovery rule.

with the exercise of due diligence . . . . An action for products liability under
95.11(3) must be begun within the period prescribed in this chapter, with the
period running from the date that the facts giving rise to the cause of action were
discovered or should have been discovered with the exercise of due diligence . . . .
Fla. Stat. § 95.031(2) (2003)
Florida Statute Section 95.11(4) provides, in relevant part, that an action for professional
malpractice, other than medical malpractice, shall be commenced “within two years” “provided
that the period of limitations shall run from the time the cause of action is discovered or should
have been discovered with the exercise of due diligence”, and that “[a]n action for medical
malpractice shall be commenced within 2 years from the time the incident giving rise to the
action occurred or within 2 years from the time the incident is discovered or should have been
discovered with the exercise of due diligence . . . .” Fla. Stat. § 95.11(4) (2006).
Florida Statute 95.11(7) provides, in relevant part:
[a]n action founded on alleged abuse, as defined in s. 39.01, s. 415.102, or 984.03,

or incest as defined in s. 826.04, may be commenced . . . within 4 years from the
time of discovery by the injured party of both the injury and the causal
relationship between the injury and the abuse . . . .”
Fla. Stat. § 95.11(7) (2006).


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Davis, 832 So. 2d at 710 (emphasis added) (holding that the delayed discovery doctrine did not
delay accrual of claims for conspiracy and conversion brought in 1997 by an elderly woman who
was suffering from “senile dementia” against family members who had stolen her life savings
from 1990 to 1992). See also Raie v. Cheminova, Inc., 336 F.3d 1278, 1281 (11th Cir. 2003)
(relying on Davis v. Monahan in holding that Florida’s delayed discovery rule could not be
applied to a wrongful-death action because it is not a cause of action enumerated by Section
95.031). Thus, CDE’s alleged Florida RICO causes of action began to accrue at the time of the
alleged commission of the last act of the last element of the claim, not at the time of Chile’s
discovery.
d. Equitable tolling based on fraudulent concealment does not apply to Florida

RICO claims.
From the above, it is clear that the Florida civil RICO claims accrued upon the
occurrence of the last predicate act. According to the second amended complaint, that was in
August 2002. (2d Am. Compl. ¶ 105) (latest specific allegation, tied to a date, in furtherance of
the alleged scheme). The only question remaining is whether, once these claims have accrued,
the limitations period can then be tolled (paused) because of a defendant’s alleged bad acts,
inequitable conduct, concealment, etc. Teeing this issue up, CDE has a separate section of its
complaint designed to extend the limitations period, called “Equitable Tolling and Fraudulent
Concealment.” (Id. at 37). That section alleges that
As a result of Riggs’ concealment of the Pinochet-controlled accounts and its

active assistance in the concealment of those accounts, the Republic of Chile
asserts the tolling of any applicable statute of limitations that might affect Chile’s
right of action.


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(Id. at ¶ 122).
We have already discussed that Florida’s statutory “delayed discovery rule” does not
apply to delay accrual of a claim under Florida’s civil RICO statute, because Florida’s
legislature did not list it. Davis, 832 So. 2d at 710. The question remaining is whether the
common-law doctrine of “equitable tolling” nevertheless applies to toll (stop the running of) the
limitations clock for an already-accrued claim arising under Florida’s civil RICO statute.7 The
answer is a resounding “No.”
Florida’s legislature provides only eight circumstances under which a claim that has
accrued under Florida law can be “tolled,” most of which concern service of process on, or
competence of, the defendant. See Fla. Stat. § 95.051 (entitled, “When limitations tolled”). The
list includes, for example, the defendant’s:
• “absence from the state;”
• “use . . . of a false name . . . so that process cannot be served;”
• “concealment in the state” of the defendant “so that process cannot be served;”
• “adjudicated incapacity;” and
• “minority.”

7
“The ‘tolling’ of a limitation period would interrupt the running thereof subsequent to accrual .
. . . [T]herefore . . . while accrual pertains to the existence of a cause of action which then
triggers the running of a statute of limitations, tolling focuses directly on limitations periods and
interrupting the running thereof.” Hearndon v. Graham, 767 So. 2d 1179, 1185 (Fla. 2000).
“‘Equitable tolling’ is [a] doctrine under which plaintiffs may sue after the statutory time period
has expired if they have been prevented from doing so due to inequitable circumstances.” Ellis
v. Gen. Motors Acceptance Corp., 160 F.3d 703, 705 (11th Cir. 1998).


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Fla. Stat. § 95.051(1)(a)-(h) (also listing partial payment of a debt or child-support, and a
pending related “arbitral proceeding”). Once again, this list is exhaustive, not illustrative. The
Florida legislature specifically provided that:
No disability or other reason shall toll the running of any statute of limitations
except those specified in this section, § 95.091 [relating to collecting taxes], the
Florida Probate Code, or the Florida Guardianship Law.
Fla. Stat. § 95.051(2) (1995) (emphasis added).
In HCA Health Serv. of Fla., Inc. v. Hillman, 906 So. 2d 1094 (Fla. 2d DCA 2004),
Florida’s Second District Court of Appeals held that this list was, indeed, exhaustive and that
equitable tolling did not apply to delay running of the limitations period for any reason not
specified in Fla. Stat. § 95.051. In that case, Hillman filed a Florida statutory “whistleblower”
claim (Fla. Stat. § 448.103) against a hospital. The claim had originally been timely filed, but in
the wrong forum. The trial court held that equitable tolling saved the claim from being time-
barred.
The appellate court reversed, finding that “the legislature has made clear its intent to
exclude all tolling exceptions not listed in [§ 95.051],” and noting that “[a]bsent from this list of
eight circumstances is the timely filing of a claim in the wrong forum.” Id. at 1098. The court
observed that, other than § 95.051’s list, there was “no case in which the [Florida] supreme court
has applied the doctrine [of equitable tolling] outside of administrative actions.” Id. Hillman is
well-reasoned and expressly based its decision on two prior Florida Supreme Court cases.8 See

8
When construing Florida law, federal courts sitting in diversity “must adhere to the decisions of
the Florida appellate courts absent some persuasive indication that the Florida Supreme Court


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id. at 1099 (“[W]e base our [holding] on two decisions in which the supreme court declined to
create additional tolling exceptions to those listed in the statute and instead deferred to the
legislative directive that there be no tolling exceptions other than those declared by the
legislature: Hearndon v. Graham, 767 So. 2d 1179 (Fla. 2000), and Major League Baseball v.
Morsani, 790 So. 2d 1071 (Fla. 2001).”).
Hillman has recently been followed by this Court in a case arising under similar
circumstances, Steinberg v. Barclay’s Nominees (Branches), Ltd., No. 04-60897, 2008 WL
4601043, at *9 n.4 (S.D. Fla. Sept. 30, 2008) (Marra, J.). In that case, Judge Marra refused to
apply equitable tolling to a court-appointed receiver’s claims under Florida’s fraudulent-transfer
statutes and for unjust enrichment, citing Hillman and echoing its language that “[a]bsent from
this list [in 95.051(1)] is a Receiver’s failure to identify properly the recipient of a transfer.” Id.
Hillman was also recently applied in a Middle District case closely on point, In re Burton
Wiand Receivership Cases Pending in the Tampa Div. of the Middle Dist. of Fla., Nos. 05-1856,
2008 WL 818504, at *9 (M.D. Fla. Mar. 26, 2008). In that case, a court-appointed receiver
brought unjust enrichment claims against the principals of a “Ponzi scheme,” and sought relief
from the limitations bar under the doctrine of equitable tolling. Despite the apparently
inequitable result, citing Hillman, the district court found that “the unjust enrichment claims are
not subject to equitable tolling, but may be tolled only for the reasons set forth in Fla. Stat. §
95.051.” Id.

would decide the issue otherwise.” Martinez v. Brink’s, Inc., 171 F. App’x. 263, 268 n.6 (11th
Cir. 2006).


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The United States Court of Appeals for the District of Columbia, sitting in diversity,9 also
followed Hillman in refusing to apply equitable tolling to statutory claims under Florida’s
Deceptive and Unfair Trade Practices Act (Fla. Stat. § 501.201), finding no “support [for the]
contention that Florida courts would contravene the straightforward statutory language” of
section 95.051(1). See In re Vitamins Antitrust Litig., 183 F. App’x. 1, 2 (D.C. Cir. 2006).
If statutory claims under:
• Florida’s whistleblower statute (Hillman), and
• Florida’s fraudulent-transfer statutes -- indeed even when brought by receivers

appointed by the Court to recover stolen money (Steinberg and Burton), and
• Florida’s Deceptive and Unfair Trade Practices Act (Vitamins Antitrust Litig.),
all cannot avail themselves of “equitable tolling,” there is no reason to think that statutory claims
under Florida’s civil RICO statute should be treated any differently. There is simply no question
that the “equitable tolling” doctrine, which CDE tries to invoke at ¶¶ 119-127, does not apply.10

9
This is a diversity case (2d Am. Compl. ¶ 12). Florida, not federal, principles of tolling apply.
See Austrian v. Williams, 198 F.2d 697, 702 (2d Cir. 1952) (court may not apply federal
equitable rule regarding tolling when in conflict with state law construing state statute of
limitations) (cited in In re Burton Wiand Receivership Cases, 2008 WL 818504, at *9).
10
We are mindful that a number of Florida courts have found that a defendant’s fraudulent
concealment may toll statutes of limitations during the time of the concealment. See, e.g., Butler
Univ. v. Bahssin, 892 So. 2d 1087, 1092 n.3 (Fla. 2d DCA 2004). Those cases, however, are
unreliable for several reasons. First, many of them were decided prior to Hillman. Second,
many of those cases, including Butler, conflate and confuse the very different concepts of
accrual, tolling and so-called “equitable estoppel.” Those decisions use those terms
interchangeably in a manner inconsistent with Fla. Stat. § 95.051, Hillman, the two Florida
Supreme Court decisions on which Hillman relies, and the subsequent federal district-court and
appellate decisions interpreting Hillman, all of which (with the exception of child-abuse cases)
limit the application of equitable tolling to the administrative context. Should CDE seek to
amend the complaint yet again and discard its theory of “equitable tolling” (2d Am. Compl. at ¶


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Based solely on the face of the second amended complaint, and accepting it as true, all of
these claims are clearly time-barred.
II. CDE’s RICO claims do not contain allegations capable of satisfying the
“operation or management” test.
CDE does not allege that Riggs was a member of the Pinochet enterprise (and, given its
acknowledgment that Riggs was a “legitimate financial institution,” cannot colorably make that
allegation). (2d Am. Compl. ¶ 47). Accordingly, for purposes of CDE’s RICO claims, Riggs
was an enterprise outsider, whom CDE accuses of having been associated with, and providing
“active assistance” to, the Pinochet enterprise. (Id. at ¶¶ 130-31).
Liability for civil RICO under Florida law (like its federal counterpart) is limited,
however, to those who “conduct or participate, directly or indirectly,” in the affairs of an
enterprise. Fla. Stat. § 772.103(3) (1986). To meet this element, “one must participate in the
operation or management of the enterprise itself.” Reves v. Ernst & Young, 507 U.S. 170, 185
(1993) (emphasis added); see also Bailey v. Trenam Simmons, Kemker, Scharf, Barkin, Frye &

125) in favor of a theory of “equitable estoppel,” that switch would also be in vain. Although
“equitable estoppel” does survive the prescription of § 95.051 (Major League Baseball, 790 So.
2d at 1079), it is an extremely narrow doctrine that applies only “where the parties recognize a
basis for a suit, but the wrongdoer prevails on the other to forego enforcing that right until the
statutory time has elapsed.” Brooks Tropicals, Inc. v. Acosta, 959 So. 2d 288, 293 (Fla. 3d DCA
2007); see also Major League Baseball, 790 So. 2d at 1079 (noting that equitable estoppel
“comes into play only after the limitations period has run and addresses itself to the
circumstances in which a party will be estopped from asserting the statute of limitations as a
defense to an admittedly untimely action because his conduct has induced another into
forbearing suit within the applicable limitations period.”) (emphasis added).


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O’Neill, P.A., 938 F. Supp. 825, 828 (S.D. Fla. 1996) (Moore, J.) (applying the operation and
management test of Reves to Florida’s RICO statute).11
As the Reves Court recognized, enterprises are most typically operated or managed by
persons within the enterprise itself. It is difficult to conceive of a logical situation in which an
outsider to an enterprise is a manager of the affairs of the enterprise, yet still remains outside of
the conspiracy.
There are a very few instances in which outsiders - - those not members of, but associated
with an enterprise - - were held to have operated or managed an enterprise’s affairs. See, e.g.,
Reves, 507 U.S. at 184. Their rarity corroborates that “the operation and management test set
forth by the Supreme Court in Reves is a very difficult test to satisfy.” LaSalle Nat’l Bank v. Duff
& Phelps Credit Rating Co., 951 F. Supp. 1071, 1090 (S.D.N.Y. 1996) (internal quotation marks
omitted). See also, e.g., Brouwer v. Raffensperger, Hughes & Co., 199 F.3d 961, 966 (7th Cir.
2000) (noting that the operation and management test is meant to be applied rigorously, as a way
of “limit[ing] . . . the universe of people that subsection (c) of § 1962 applies to”); Dep’t Econ.
Dev. v. Arthur Andersen & Co., 924 F. Supp. 449, 465 (S.D.N.Y. 1996) (recognizing that “Reves
makes it more difficult to find ‘outsiders’ . . . liable under” RICO) (emphasis added).
As Reves made clear, liability will not attach to such outsiders unless they operate and
manage not just their own affairs, but in the affairs of the enterprise itself. Reves, 507 U.S. at

11
Because Florida’s RICO law is patterned after the Federal RICO statute, its interpretation is
“‘informed by case law interpreting the federal RICO statute.’” See Jackson v. BellSouth
Telecomms., 372 F.3d 1250, 1263–64 (11th Cir. 2004) (observing that “[b]ecause Florida courts
often look to the Federal RICO decisions for guidance in interpreting and applying the act[,] the
analysis [courts] apply to . . . federal RICO claims is equally applicable to their state RICO
claims”) (internal quotation marks and citations omitted).


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185. Under that framework, to gain civil RICO standing, it is not enough for a plaintiff to allege
that an outsider-defendant has:
• provided services, including essential banking services, to an enterprise;12
• assisted an enterprise with full knowledge of the fraud;13
• exercised influence or had “substantial persuasive power” over the affairs of the
enterprise;14 or even
• knowingly concealed the enterprise’s illicit activities.15
Simply put, participation that amounts to little more than aiding and abetting will not
suffice. Reves, 507 U.S. at 178–79. Rather, an outsider-defendant must have “some part in
directing” the affairs of the enterprise. Reves, 507 U.S. at 179 (emphasis added).

12
De Wit v. Firstar Corp., 879 F. Supp. 947, 965 (N.D. Iowa 1995) (concluding that plaintiffs
failed to “allege[] that defendants participated in the conduct of [a] RICO enterprise” where the
defendants had merely “conducted that enterprise’s banking scheme,” adding that because this
“conduct was one step removed from management of the RICO enterprise itself,” there could be
no liability under § 1962(c)).
13
Indus. Bank of Latvia v. Baltic Fin. Corp., No. 93 Civ. 9032, 1994 WL 286162, at *3
(S.D.N.Y. June 27, 1994) (“That Asia Bank provided banking services—even with knowledge of
the fraud—is not enough to state a claim under § 1962(c).”) (citation omitted).
14
LaSalle Nat’l Bank, 951 F. Supp. at 1090 (citation omitted) (“Although [the defendant] was
privy to confidential Towers information throughout the rating process, and had influence or
even ‘substantial persuasive power’ in structuring the Bond program, such influence does not
constitute operation or management of [the enterprise].”).
15
Schmidt v. Fleet Bank, No. 96 Civ. 5030, 1998 WL 47827, at *8 (S.D.N.Y. Feb. 4, 1998)
(holding that allegations that outsider defendant concealed the enterprise’s Ponzi scheme from
the scheme’s victims and from regulatory and banking authorities did not constitute operation
and management of a RICO enterprise).


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The difficulty that RICO plaintiffs face in meeting this standard for outsider-defendants is
perhaps best illustrated by the lone example by the Reves Court: bribery. Bribery, as then-Judge
Mukasey once explained, is “qualitatively different from mere influence or assistance” because
the outsider who pays the bribe is able, though payment of the bribe, to influence the bribe-
recipient to act at her direction in conducting the affairs of the enterprise, and thereby acquires
actual control over the enterprise’s affairs. See Arthur Andersen, 924 F. Supp. at 466–67.
Absent the level of control inherent in, e.g., a bribery scheme, courts have routinely
dismissed § 1962(c) claims brought against both banking and non-banking institutions for failure
to satisfy the control element.
This Court recently dismissed similar RICO claims asserted against outsider-bank
defendants for failure to allege sufficient control. Super Vision Int’l, Inc. v. Mega Int’l
Commercial Bank Co., 534 F. Supp. 2d 1326 (S.D. Fla. 2008) (Gold, J.). In doing so, this Court
concluded that in facilitating the transfer of funds, in regularly meeting with the principal
wrongdoer concerning his accounts, in refusing to disclose the existence of the wrongdoer’s
accounts and in taking steps to make the wrongdoer lawsuit-proof, the bank had participated in
the operation or management of its own affairs, not those of the enterprise. Id. at 1338. Thus,
this Court concluded, the bank “did not exercise the requisite control” over the alleged
enterprise. Id.
Here, as in Super Vision, CDE’s allegations fall well short of meeting the control
requirement of § 772.103(3). This is fatal to all three of CDE’s remaining claims under Florida
RICO.


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The three complaints filed by CDE in this action all have accused Riggs of acts which
constitute assistance to the enterprise, but hardly amount to managing or controlling it:
• opening accounts for members of the Pinochet enterprise (2d Am. Compl. ¶ 74);
• facilitating the transfer of illicit funds into and out of those accounts (id. at ¶ 37);
• issuing checks and certificates of deposit to members of the enterprise (id. at ¶¶

51, 56);
• failing to follow banking regulations governing money laundering (id. at ¶ 71);
• failing to disclose or otherwise concealing the existence of those accounts (id. at ¶

76);
• concealing those transactions from regulators (id. at ¶ 85);
• assisting Pinochet in circumventing judicial attempts to freeze his assets (id. at ¶

92);
• establishing, through its affiliate, off-shore shell companies (id. at ¶ 42); and
• traveling to Chile to meet with Pinochet and deliver cashier’s checks at his
request (id. at ¶¶ 75, 98).
The only difference between the first two complaints on the one hand, and the second
amended complaint on the other, is that CDE - - struggling to survive Reves - - has added a
heading entitled: “Operation and Management of the Enterprise” (id. at 16), along with
conclusory language accusing Riggs of participating in the “operation and management” of the
Pinochet enterprise’s affairs (e.g., id. at ¶ 47.) Conclusory claims that a defendant operated or
managed an enterprise, however, without any allegations as to “how the individual Defendant[]
played a part in directing the affairs of the enterprise,” are insufficient for purposes of a motion
to dismiss. Comcast of S. Fla. II, Inc. v. Best Cable Supply, Inc., No. 07-22335, 2008 WL


-17-

190584, at *8 (S.D. Fla. Jan. 22, 2008) (Huck, J.) (emphasis in original).
Indeed, conclusory allegations aside, CDE still has not alleged any facts supporting that
Riggs devised the enterprise’s scheme, directed or participated in the management of the
enterprise, or exerted control over the enterprise.
At most, the misconduct of which Riggs stands accused can be reduced to two words,
found nowhere in RICO jurisprudence, which are repeated over and over like a mantra
throughout the second amended complaint: “active assistance.” (2d Am. Compl. ¶¶ 1, 4, 5, 16,
36, 73 (and section title), 82, 113 and 122). No matter how many times CDE repeats this phrase,
“active assistance” is still a far cry from the “operation” or “management” or “control” that Fla.
Stat. § 772.103(3) and Reves require.
That Riggs at most assisted (as opposed to managed) the Pinochet enterprise by carrying
out the instructions of its members is perhaps best illustrated by the August 9, 2000
memorandum, prepared by a Riggs employee, which is excerpted in the second amended
complaint. In that memo, the Riggs employee states:
The client’s [Riggs] relationship officer should travel, discretely [sic] and within
the next 30 days, to Chile to meet with the client and/or his representatives to
determine the client’s strategies, goals and likely instructions based on the
client’s actual and potential changes in legal status.
(2d Am. Compl. ¶ 96) (emphasis added).
The cases are legion that this sort of alleged conduct by an outsider (i.e., following
orders), even when done with full knowledge of the fraud, fails to rise to the level of control that
the Supreme Court’s Reves decision requires. See Dahlgren v. First Nat’l Bank of Holdrege, 533
F.3d 681, 690 (8th Cir. 2008) (concluding that financial assistance and professional services


-18-

rendered by bank to an enterprise - - allowing enterprise to commingle funds, honoring
substantial overdrafts and transferring funds between enterprise accounts - - does not meet the
operation and management test); Schmidt v. Fleet Bank, 1998 WL 47827, at *8 (allegations that
outsider banks knew of the enterprise’s fraud, made payments on bad checks to allow the fraud
to continue, and concealed the fraud from banking and other authorities does not constitute
operation or management of a RICO enterprise); Rosner v. Bank of China, 528 F. Supp. 2d 419,
423, 431 (S.D.N.Y. 2007) (finding allegations that bank “knew about the fraudulent scheme,”
“used its correspondent relationships with United States banks to transfer the stolen funds,” and
“disregarded applicable laws and regulations that, if followed, would have prevented the
laundering of the IFS Investors’ funds,” were insufficient because they amounted to nothing
more than that the bank “provided banking services that aided in the perpetration of the
fraudulent scheme”); Wuliger v. Liberty Bank, No. 3:02 CV 1378, 2006 WL 42089, at *2 (N.D.
Ohio Jan. 6, 2006) (finding that bank’s knowledge of the enterprise’s illicit activity, coupled with
its willful failure to file SARs and its violation of know-your-customer rules, did not constitute
control over the enterprise); Dubai Islamic Bank v. Citibank, N.A., 256 F. Supp. 2d 158, 164
(S.D.N.Y. 2003) (finding that allegations regarding Citibank’s “opening of accounts” and
“transferring funds” did not constitute “exerting control over the enterprise” where “active
management or operation” had not been sufficiently alleged) (internal citations omitted); Redtail
Leasing, Inc. v. Bellezza, No. 95 Civ. 5191, 1999 WL 32941, at *5 (S.D.N.Y. Jan. 22, 1999)
(holding that the alleged participation in an insider trading ring by paying kickbacks and
instructing the enterprise on how to conceal the scheme from government investigators held


-19-

insufficient to demonstrate control); Dep’t Econ. Dev., 924 F. Supp. at 465, 469 (holding that the
defendant’s provision of essential services to the enterprise, including the creation of fraudulent
financial records and chartering of subsidiary corporations, was insufficient to meet the control
element); De Wit v. Firstar Corp., 879 F. Supp. 947, 965 (N.D. Iowa 1995) (conducting the
“enterprise’s banking scheme” was “one step removed from management [itself],” and therefore
insufficient to establish control over the enterprise); Indus. Bank of Latvia v. Baltic Fin. Corp.,
No. 93 Civ. 9032, 1994 WL 286162, at *3 (S.D.N.Y. June 27, 1994) (holding that “maintain[ing]
an account at the bank and accepting wire transfers” known to be fraudulent does not constitute
control under RICO).
Likewise, despite this Court’s Local Rule requiring a straight answer to this question,
CDE’s Civil RICO Case Statement fails to articulate precisely how Riggs is alleged to have
directed the affairs of the enterprise. When ordered to “[e]xplain how each separate defendant
participated in the direction or conduct of the affairs of the enterprise,” S.D. Fla. L. R. 12.1,
CDE dodged the question with the vague and conclusory statement that:
PNC, through its acquisition of Riggs, participated in the conduct of the affairs of
the enterprise because Riggs facilitated the money laundering and concealment of
illegally-obtained money from the government of Chile, and accepted significant
funds from Augusto Pinochet and other individual members of the enterprise
under false names.
Civil RICO Case Statement, at 32 [DE 12]. This obviously evasive answer, utterly devoid of the
specific “explan[ation]” that the Local Rules require, itself demonstrates CDE’s inability to
satisfy the “enterprise control” requirement of RICO pleading.
As the cases cited above make clear, there is a stark difference between assistance to the


-20-

enterprise on the one hand, and operation and management of the enterprise’s affairs on the
other. Only the latter is sufficient to satisfy Fla. Stat. § 772.103(3) and the Reves test. The
allegations of CDE’s amended RICO claims fall well short of meeting this standard.
III. Count I does not allege a “direct injury” caused by Riggs.
“When a court evaluates a RICO claim for proximate causation, the central question it
must ask is whether the alleged violation led directly to the plaintiff’s injuries.” Anza v. Ideal
Steel Supply Corp., 547 U.S. 451, 461 (2006). Under Florida law, “[i]ndirect harm,” such as the
type alleged here, “is insufficient to sustain a cause of action under the RICO statute[].” Bortell
v. White Mountains Ins. Group, Ltd., 2 So. 3d 1041, 1047 (Fla. 4th DCA 2009) (affirming
dismissal of plaintiff’s Florida RICO claim where the court concluded that plaintiff’s RICO
injuries were not directly related to defendants’ alleged violations of the Florida Insurance Code
but, rather, from the termination of his agency agreement, which was not itself a RICO
violation).
CDE’s third try at a complaint still does not satisfy this test. In defining the scheme it
pleads, CDE clearly distinguishes its being directly harmed when Pinochet stole Chile’s money,
from the later harm that followed when the alleged money-laundering scheme rendered Chile
“unable to recover” that money.16 CDE’s response on this issue in its Civil RICO Case
Statement clearly makes this distinction:

16
CDE alleges that “Pinochet misappropriated and then laundered through Riggs Bank . . .
millions of dollars from the government and people of Chile . . . .” (2d Am. Compl. ¶ 2)
(emphasis added).


-21-

Describe how you were directly injured by such person’s conducting or

participating in the enterprise’s affairs.
The government of Chile was injured directly by Pinochet

misappropriating money from the government, by the Pinochet enterprises
laundering of the money, and by Riggs’ assistance to the Pinochet
enterprise in laundering money so that the government of Chile was
unaware of Pinochet’s crimes and was unable to recover the money from
Pinochet. Had Riggs not assisted Pinochet’s efforts to hide money, Chile
could have recovered the money that passed through its accounts, in an
amount of at least $11 million.
Civil RICO Case Statement, at 36 [DE 12] (emphasis added). 17
The awkward way that CDE describes its injury is no accident. It is the Achilles’ Heel of
this case. Chile’s putative “inability to recover” already-stolen money is simply not a “direct”
injury sufficient to confer civil RICO standing. See Benedetti v. Nissenbaum, No. 90 Civ. 7206,
1993 WL 118489, at *3 (S.D.N.Y. Apr. 12, 1993) (Wood, J.) (noting that injuries resulting
indirectly from predicate acts do not confer standing under RICO, and finding that plaintiff had
“failed, as a matter of law, to show that the predicate acts proximately caused her alleged
injury”).

17
In a companion case pending in this Court, CDE summarizes the harm as: “[t]he injury
sustained by the Republic of Chile was the loss of the ability to recover the funds laundered
through [a bank].” Consejo de Defensa del Estado v. Banco Santander Centro Hispano, S.A.,
No. 09-20621-cv-Huck [DE 41 at 2].


-22-

Chile’s harm can be illustrated graphically as:
Claiming that the “inability to recover” already-stolen money caused Chile a direct injury
is like claiming that the person who stole a car and removed the VIN plates directly injured the
owner twice: once when she stole the car, and again when the owner could not recover it. This
defies logic and common sense.
Chile’s loss is that “millions of dollars [were] misappropriated from the Chilean national
treasury.” (2d Am. Compl. ¶ 1.) The direct cause of this alleged injury is Pinochet’s
“misappropriation” (whatever that is) not what allegedly happened to the money later, after it
was deposited at Riggs Bank. See Vicon Fiber Optics Corp. v. Scrivo, 201 F. Supp. 2d 216, 219
(S.D.N.Y. 2002) (granting motion to dismiss where “the crux of [plaintiff’s] claim” was that “its
treasury was looted” and where “the injury here happened, or could have happened, even if
[there had been no mail or wire fraud]” as alleged in the complaint).
Perhaps revealing its own discomfort with this unworkably clumsy definition of “direct
injury,” CDE’s theory of its injury has been a moving target. Even after three complaints and a


-23-

RICO Case Statement, it is impossible to pin down. CDE theory-surfs from alleging that the
“direct injury” Riggs caused Chile was:
(1) delaying the discovery of Pinochet’s “misdeeds;” to
(2) the inability to recover money Pinochet “misappropriated;” and finally to
(3) both the inability to recover the money and the purloining of the money itself.
The following chart illustrates this problem:
Pleading Theory or New Theory
“Had Riggs Bank notified regulators of certain of the transactions alleged herein,
Complaint
Pinochet’s misdeed [sic] would have been exposed sooner.” (¶77).
“Pinochet misappropriated millions of dollars from the government and people of

Chile, then laundered the funds through the participation[] of . . . Riggs Bank.” (¶ 2).
Amended
Complaint
“Riggs Bank … aided Pinochet in concealing assets and, at time, in circumventing
judicial attempts to freeze his assets.” (¶70).
Civil Rico “Had Riggs not assisted Pinochet's efforts to hide money, Chile could have recovered
Case the money that passed through its accounts, in an amount of at least $11 million.” (Page
Statement 36).
Second
“The actions of Riggs … had as its [sic] common goal[s] assisting Pinochet in
Amended
misappropriating Chilean government funds, laundering funds and actively assisting
Complaint
the Pinochet Enterprise to conceal these illicit and ill-gotten funds.” (¶ 72).
Even accepting CDE’s claim that the conceptually and temporally independent money-
laundering scheme harmed it by concealing the stolen money, “a pattern of racketeering activity
that le[ads] to the concealment of . . . improper [underlying] conduct . . . is too attenuated to
satisfy the proximate cause requirement.” Lerner v. Fleet Bank, N.A., 318 F.3d 113, 123 (2d Cir.
2003) (Sotomayor, J.) (affirming dismissal of RICO claim under Rule 12(b)(6) for failure to state


-24-

a claim). See also Vicon Fiber Optics Corp., 201 F. Supp. 2d at 219 (“A predicate act does not
proximately cause an injury if it merely furthers, facilitates, permits or conceals an injury that
happened or could have happened independently of the act.”) (citation omitted).
CDE’s argument is a magician’s attempt to transform post-theft conduct into a RICO
direct-injury. It is akin to “the butterfly effect of chaos theory,” Hall v. United States, 371 F.3d
969, 977 (7th Cir. 2004), namely, that every act can be said to have a “direct” effect on
everything else. This fundamentally ignores the “normative legal policy considerations” that
limit the class of eligible civil-RICO plaintiffs to those who directly caused the alleged loss.
Hecht v. Commerce Clearing House, Inc., 897 F.2d 21, 23 (2d Cir. 1990) (citations omitted).18
In a case closely on point, Oki Semiconductor v. Wells Fargo Bank, 298 F.3d 768, 774
(9th Cir. 2002), the Ninth Circuit held that a bank’s alleged money laundering did not directly
cause plaintiff’s injury when, as here, the plaintiff had already been injured by an underlying
theft. In Oki, a Wells Fargo employee was a “central participant in a conspiracy . . . devoted to
stealing and selling semiconductors and then laundering the proceeds through . . . sham bank
accounts.” Id. at 771. The plaintiff brought civil RICO claims against Wells Fargo, claiming, as

18
To elaborate on this point, while “[a] koala’s choice among tasty eucalyptus leaves in
Australia could change the weather in Alaska,” Hall, 371 F.3d at 977, “any attempt to impose
responsibility upon such a[n attenuated] basis would result in infinite liability for all wrongful
acts, and would set society on edge and fill the courts with endless litigation.” Holmes, 503 U.S.
at 266 n.10 (internal quotation marks and citation omitted). See generally id. (rejecting plaintiff’s
theory of direct causation, noting that “[i]n a philosophical sense, the consequences of an act go
forward to eternity, and the causes of an event go back to the dawn of human events, and
beyond”) (internal quotation marks and citation omitted). Cf. Cal. Div. of Labor Standards
Enforcement v. Dillingham Constr., N.A., 519 U.S. 316, 335 (1997) (Scalia, J., concurring)
(“[A]s many a curbstone philosopher has observed, everything is related to everything else.”).


-25-

here, that the bank was vicariously liable for the employee’s laundering activities. As here, the
RICO plaintiff contended that the bank was vicariously liable “because it reaped benefits . . . by
‘obtaining numerous new accounts and receiving millions of dollars in deposits’” and that the
employee committed the crimes “‘while acting in the course and scope of her employment.’” Id.
at 772 (quoting from the RICO complaint against Wells Fargo). Cf. (2d Am. Compl. ¶ 18)
(deposits were for bank’s “own benefit”), ¶ 75 (bank’s desire “to maintain banking
relationship”); RICO Case Statement, at 33 [DE 12] (“Riggs benefited from the utilization of the
$11 million dollars [sic] laundered through its accounts in having additional funds for banking
activities and the increase in deposits available to the Bank, as well as extensive fees charged for
the banking services provided.”). As here, the RICO plaintiff “did not suggest that the [bank
employee] participated in the theft” itself. Oki, 298 F.3d at 773-74.
The Ninth Circuit flatly rejected Oki’s attempt to plead creatively around civil RICO’s
direct-injury requirement, holding, “[t]he direct and proximate cause of Oki’s loss was not [the
employee’s] money laundering at Wells Fargo; it was theft. Only after the theft occurred and the
semiconductors were sold could [the employee] launder the proceeds.” Id. at 774 (emphasis
added).
The Ninth Circuit rejected the identical boundless “but for” causation argument that Chile
here tries to launch, calling it “speculative” and “insufficient” for RICO:
In a tenuous way, [the employee’s] participation in the Conspiracy might be

considered a “but for” cause of Oki’s loss: But for [the employee’s] ability to
establish sham bank accounts and launder the proceeds of the Conspiracy’s thefts,
the Conspiracy may not have undertaken to steal Oki’s semiconductors. However,
this type of speculative “but for” causation is insufficient to state a RICO
violation. . . . That [the employee] knew about the robbery or indirectly provided


-26-

support for it (or theoretically, that she packed sandwiches to feed the thieves)
does not mean her actions at Wells Fargo directly caused the theft. In the end, Oki
simply cannot demonstrate that [the] money laundering proximately caused the
robbery.
Id.
Other courts have readily rejected similar attempts by creative RICO pleading to blur the
line between direct and indirect causation of the injury. See, e.g., Lerner, 318 F.3d at 123
(Sotomayor, J.) (affirming dismissal of RICO claim under Rule 12(b)(6) for failure to state a
claim and noting that “a pattern of [alleged] racketeering activity that le[ads] to the concealment
of . . . improper [underlying] conduct . . . is too attenuated to satisfy the proximate cause
requirement”); Albright v. Attorney’s Title Ins. Fund, 504 F. Supp. 2d 1187, 1204 (D. Utah 2007)
(granting partial summary judgment in RICO case where an alleged “attempt[] to cover up
[certain] . . . frauds . . . did not cause the frauds in which plaintiffs lost their money”) (emphasis
in original) (citing Oki, 298 F.3d at 774); Simon v. Weaver, 327 F. Supp. 2d 258, 261 (S.D.N.Y.
2004) (dismissing RICO claim where plaintiffs had already been injured before defendants were
involved in the alleged RICO scheme); Benedetti, 1993 WL 118489, at *3 (Wood, J.) (noting
that injuries resulting indirectly from predicate acts do not confer standing under RICO, and
finding that plaintiff had “failed, as a matter of law, to show that the predicate acts proximately
caused her alleged injury”).
As these cases make clear, a civil RICO claim requires a direct-injury element not
contained in the criminal RICO statute. See Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258,
265 (1992) (explaining that a civil plaintiff “may [not] recover [under the RICO statute] . . .
simply on showing that the defendant violated § 1962,” of the federal criminal code) (footnote


-27-

omitted). Creative pleading cannot satisfy this necessary requirement. CDE’s Florida RICO
claims must be dismissed.
IV. CDE’s RICO-based conspiracy and aiding-and-abetting claims also fail.
It is well settled that civil claims for RICO conspiracy and aiding-and-abetting RICO fail
when the complaint fails to state a substantive civil RICO claim. Rogers v. Nacchio, 241 F.
App’x 602, 609 (11th Cir. 2007) (holding that “claims of conspiracy and aiding and abetting”
under both “federal [and] state RICO” were properly dismissed because “the complaint failed to
state a [RICO] claim”); Jackson v. Bellsouth Telecomms., 372 F.3d 1250, 1269 (11th Cir. 2004)
(affirming dismissal of both “federal and [Florida] RICO” conspiracy claims because “the
complaint failed to state a substantive RICO claim”). As set forth above, CDE has failed to state
a viable substantive RICO claim under Florida law. Accordingly, counts II and III must also be
dismissed.
CDE’s RICO conspiracy claim also fails for the independent reason that it is premised on
nothing more than conclusory allegations that Riggs “conspired with the Pinochet enterprise.”
(2d Am. Compl. ¶ 138.)19 As the Supreme Court has held, allegations such as these, which rest
on “labels and conclusions, and a formulaic recitation of the elements of a cause of action,” are
simply insufficient. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

19
Carter v. MGA, Inc., 189 F. App’x 893, 895 (11th Cir. 2006) (“Plaintiffs’ conclusory
allegations that Defendants conspired with each other are insufficient to survive a motion to
dismiss.”); see also Jackson, 372 F.3d at 1269 (finding a “fatal pleading defect” where “the
RICO conspiracy [claim] . . . simply concludes that defendants ‘conspired and confederated’ to
commit conduct which in itself does not constitute a RICO violation”).


-28-

Finally, CDE’s aiding-and-abetting count fails for the independent reason that, as the
overwhelming majority of courts have now concluded,20 such claims are not cognizable
following the Supreme Court’s holding in Central Bank v. First Interstate Bank, 511 U.S. 164,
177 (1994) (concluding that no private cause of action exists for aiding and abetting a violation
of § 10(b) of Securities Exchange Act).21 While those courts were addressing the viability of
such claims under Federal RICO, their conclusion applies with equal force to claims brought
under Florida RICO. Indeed, the Florida Supreme Court has concluded - - in the context of
Florida’s Uniform Fraudulent Transfer Act - - that when a statute contains “no language” “that
suggests the creation of a distinct cause of action for aiding-abetting,” no such cause of action
will be inferred. Freeman v. First Union Nat’l Bank, 865 So. 2d 1272, 1276 (Fla. 2004).
Florida’s RICO statute, like the statute at issue in Freeman, does not expressly create a cause of
action for aiding and abetting. Accordingly, CDE’s aiding and abetting count must be dismissed.

20
See, e.g., In re Countrywide Fin. Corp., 601 F. Supp. 2d 1201 (N.D. Cal. 2009); In re
Sunpoint Sec., Inc., 350 B.R. 741 (E.D. Tex. 2006); Craig Outdoor Adver., Inc. v. Viacom
Outdoor, Inc., No. 04-0074-CV-W-DW, 2005 WL 1279046 (W.D. Mo. May 25, 2005); Wuliger
v. Liberty Bank, N.A., No. 3:02 CV 1378, 2004 WL 3377416 (N.D. Ohio Mar. 4, 2004); Doe I v.
The Gap, Inc., No. CV-01-0031, 2001 WL 1842389 (D. N. Mar. I. Nov. 26, 2001); Heffernan v.
HSBC Bank USA, No. 1:99CV07981, 2001 WL 803719 (E.D.N.Y. Mar. 29, 2001); In re
MasterCard Int’l Inc., 132 F. Supp. 2d 468 (E.D. La. 2001); Pa. Ass’n of Edwards Heirs v.
Rightenour, 235 F.3d 839 (3d Cir. 2000); Jubelirer v. MasterCard Int’l, 68 F. Supp. 2d 1049
(W.D. Wis. 1999); Sorrano v. N.Y Life Ins. Co., No. 96 C 7882, 1999 WL 104403 (N.D. Ill. Feb.
24, 1999); Touhy v. N. Trust Bank, No. 98 C 6302, 1999 WL 342700 (N.D. Ill. May 17, 1999);
Hayden v. Paul, Weiss, Rifkind, Wharton & Garrison, 955 F. Supp. 248 (S.D.N.Y. 1997); Dep't
of Econ. Dev. v. Arthur Andersen & Co., 924 F. Supp. 449 (S.D.N.Y. 1996); In re Lake States
Commodities, Inc., 936 F. Supp. 1461 (N.D. Ill. 1996).
21
The Eleventh Circuit has yet to decide this issue in the aftermath of Central Bank. While one
court in this District has held that such causes of action are viable (see In re Managed Care
Litig., 135 F. Supp. 2d 1253, 1267 (S.D. Fla. 2001)), that decision was based on a pre-Central
Bank decision and, we respectfully submit, was therefore incorrectly decided.


-29-

Conclusion
For the foregoing reasons, PNC respectfully requests that this Court enter an order
dismissing the second amended complaint with prejudice.
Respectfully submitted,
LEWIS TEIN, P.L.

The Offices at Cocowalk
3059 Grand Avenue, Suite 340
Coconut Grove, Florida 33133
Telephone: (305) 442-1101
Facsimile: (305) 442-6744
By: /s/ Michael R. Tein _

MICHAEL R. TEIN
Florida Bar No.: 993522
tein@lewistein.com
Attorneys for Defendants, PNC Financial

Services Group, Inc. and PNC Bank, N.A.


-30-

Certificate of Service
I HEREBY CERTIFY that on October 1, 2009, I electronically filed the foregoing
document with the Clerk of the Court using CM/ECF. I also certify that the foregoing document
is being served this day on all counsel of record identified on the following service list via
transmission of Notices of Electronic Filing generated by CM/ECF.
/s/ Michael R. Tein

Michael R. Tein
Service List
William K. Hill, Esq.

Melissa R. Alvarez, Esq.
Bilzin Sumberg Baena Price & Axelrod LLP
200 South Biscayne Blvd., Suite 2500
Miami, Florida 33131
Counsel for Plaintiff Consejo de Defensa del

Estado de la Republica de Chile


-31-

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Case 1:09-cv-20612-ASG Document 39 Entered on FLSD Docket 10/01/2009 Page 1 of 31

UNITED STATES DISTRICT COURT

CASE NO. 09-20612-CIV-GOLD/MCALILEY

CONSEJO DE DEFENSA DEL ESTADO

PNC FINANCIAL SERVICES GROUP, INC.,

satisfy RICO’s injury to “business or property” requirement.

I. CDE’s Florida RICO claims are time-barred.

a. The statute of limitations for Florida civil RICO is five years.

Florida civil RICO’s limitations period is five years:

Notwithstanding any other provision of law, a civil action or proceeding under

Fla. Stat. § 772.17 (1986).

March 11, 2004.

furtherance of, the alleged money-laundering and RICO conspiracies.

still have not specified one. As a result, they are time-barred.

c. Florida RICO claims do not benefit from a “delayed discovery rule.”

the benefit of delaying accrual until discovery.

Supreme Court could not be clearer on this point:

Fla. Stat. § 95.031(2) (2003)

Florida Statute 95.11(7) provides, in relevant part:

[a]n action founded on alleged abuse, as defined in s. 39.01, s. 415.102, or 984.03,

Fla. Stat. § 95.11(7) (2006).

applied to a wrongful-death action because it is not a cause of action enumerated by Section

d. Equitable tolling based on fraudulent concealment does not apply to Florida

Concealment.” (Id. at 37). That section alleges that

As a result of Riggs’ concealment of the Pinochet-controlled accounts and its

answer is a resounding “No.”

list includes, for example, the defendant’s:

• “absence from the state;”

• “use . . . of a false name . . . so that process cannot be served;”

• “adjudicated incapacity;” and

Florida legislature specifically provided that:

Fla. Stat. § 95.051(2) (1995) (emphasis added).

Morsani, 790 So. 2d 1071 (Fla. 2001).”).

circumstances, Steinberg v. Barclay’s Nominees (Branches), Ltd., No. 04-60897, 2008 WL

apply equitable tolling to a court-appointed receiver’s claims under Florida’s fraudulent-transfer

If statutory claims under:

• Florida’s whistleblower statute (Hillman), and

• Florida’s fraudulent-transfer statutes -- indeed even when brought by receivers

these claims are clearly time-barred.

“active assistance” to, the Pinochet enterprise. (Id. at ¶¶ 130-31).

however, to those who “conduct or participate, directly or indirectly,” in the affairs of an

management test of Reves to Florida’s RICO statute).11

that an outsider-defendant has:

• provided services, including essential banking services, to an enterprise;12

• assisted an enterprise with full knowledge of the fraud;13

• knowingly concealed the enterprise’s illicit activities.15

to satisfy the control element.

• issuing checks and certificates of deposit to members of the enterprise (id. at ¶¶

• failing to follow banking regulations governing money laundering (id. at ¶ 71);

• failing to disclose or otherwise concealing the existence of those accounts (id. at ¶

• concealing those transactions from regulators (id. at ¶ 85);

• assisting Pinochet in circumventing judicial attempts to freeze his assets (id. at ¶

enterprise, or exerted control over the enterprise.

Stat. § 772.103(3) and Reves require.

memorandum, prepared by a Riggs employee, which is excerpted in the second amended

complaint. In that memo, the Riggs employee states:

(2d Am. Compl. ¶ 96) (emphasis added).

rendered by bank to an enterprise - - allowing enterprise to commingle funds, honoring

control under RICO).

satisfy the “enterprise control” requirement of RICO pleading.

III. Count I does not allege a “direct injury” caused by Riggs.

Statement clearly makes this distinction:

Describe how you were directly injured by such person’s conducting or