UPDATED 10:23 A.M. EDT (U.S.A.) A federal judge should grant Bank of America’s motion to stay a case in which the bank is alleged to have aided and abetted a racketeering scheme because the plaintiffs already have a remedy and their argument is fatally deficient, the bank argued yesterday.
Moreover, the bank argued, the government is in possession of certain information about AdSurfDaily Inc. — information outside the scope of the bank’s relationship with ASD — and that a stay is appropriate because prosecutors in a forfeiture case separate from the RICO lawsuit are compiling information.
“[I]n addition to seizing all of ASD’s assets, the Government seized evidence as well, and thus a brief stay is necessary until resolution of the Forfeiture Proceeding to avoid compromising the proceedings here,” the bank said.
“[T]he DOJ is currently in the process of determining who among the former ASD members have losses,” the bank said.
And, Bank of America suggested, there may be reason to believe that a restitution pool envisioned by the government could increase as its probe into ASD continues.
Federal prosecutors have seized about $80 million to date, according to records.
“It is also entirely plausible that some former ASD members made money from the alleged scheme and the DOJ’s individualized claims process under the civil forfeiture laws is the best venue to investigate and address such issues,” the bank argued, using bold type to highlight the words “made money.”
“Accordingly, a brief stay is necessary to permit the process to run its course,” the bank argued.
The bank said the government already has announced a process by which it intends to provide restitution to alleged victims of ASD.
“Plaintiffs do not (and cannot) dispute that the DOJ’s asset distribution process in connection with the Forfeiture Proceeding aims to accomplish the same result as the purported claims in this litigation — i.e., to reimburse Mike Collins, Frank Greene, Natures Discount, Inc. and others for money allegedly lost as a result of their involvement with ASD,” the bank said.
“If the named Plaintiffs in this case have no damages, then they cannot pursue their claims here, let alone act as lead plaintiffs for a class of other similarly situated plaintiffs,” the bank said.
Bank of America was not named a RICO defendant in the case. Rather, the plaintiffs alleged the bank aided and abetted ASD President Andy Bowdoin, ASD attorney Robert Garner and others in a fraudulent scheme.
Bowdoin has not responded to the RICO complaint, which was filed in January and amended in April.
Both the RICO case, which was brought by private litigants, and the forfeiture case, which was brought by the government, are being argued in U.S. District Court for the District of Columbia.
Judge Rosemary Collyer is presiding over both cases.
Read the bank’s answer to the RICO plaintiffs.