The attorneys of Frohsin Barger & Walthall have secured a $655,000 judgment in a recent case which alleged violation of the Georgia Racketeer Influenced and Corrupt Organizations Act (RICO).

The facts of this case began when Frohsin Barger & Walthall’s (FBW) client was the seller in a real estate transaction on St. Simons Island, Georgia.  The buyer retained a closing attorney, Douglas J. Mathis. The buyer transferred the $135,000 purchase amount to Mr. Mathis, the parties attended the closing and at the time it appeared to be a routine real estate sale.  However, Mr. Mathis — entrusted with $135,000 of our clients money — never transferred the funds to FBW’s client.  Soon after, the Law Offices of Douglas  J. Mathis were abandoned and Mr. Mathis had been charged with defrauding an array of his own clients.

Our clients entrusted FBW to find a remedy to recover their stolen money.  As experienced complex litigation and white-collar fraud attorneys, FBW turned to the RICO statutes.  Originally enacted to prosecute organized crime bosses who controlled criminal enterprises, the federal RICO statute has become the premier private fraud prosecution tool.  The federal, and many state, RICO statutes impose liability when a defendant “conducts an enterprise through a pattern of racketeering activity.”

Part of the complexity of RICO claims involve proving the separate elements of the offense which are 1) conduct of 2) an enterprise 3) through a pattern of 4) racketeering activity.  However, the “racketeering activity” element is generally defined by the RICO statutes as any number of “predicate acts” or enumerated crimes that can trigger RICO liability.

Some of the most common predicate acts are wire fraud (18 U.S.C. § 1343) and mail fraud (18 U.S.C § 1341).  In the modern financial system, almost every transaction travels through the interstate or foreign wire communication system (i.e. nearly any bank transaction or wire transfer).  Therefore, when a fraudster devises a scheme to defraud or obtains money for false pretenses utilizing the interstate wire system for the purpose of such a fraud — they have committed wire fraud.  If a defendant commits wire fraud two times or more over a 10 year period — that conduct could qualify as a “pattern of racketeering activity” and could trigger RICO liability.  A successful RICO plaintiff is entitled to three times the damages they have suffered plus their attorney fees incurred in pursuing the case.

As this $655,000 judgment demonstrates, Frohsin Barger & Walthall will continue to fight both public and private fraudsters and strive to achieve justice for our clients — including businesses and individuals who are victims of fraud.