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“NEW YORK, March 30, 2004 (PRIMEZONE) — The law firms of Kirby
McInerney & Squire, LLP and Levy Angstreich Finney Baldante,
Rubenstein & Coren, P.C. announce that the U.S. District Court for the
Northern District of Illinois has issued an opinion, entered March 30,
2004, sustaining federal Racketeer Influenced and Corrupt
Organizations Act (“RICO”) claims on behalf of a certified nationwide
plaintiff class against H&R Block, Inc. (NYSE:HRB) and Household
International, Inc. (successor to Beneficial Corporation), a
subsidiary of HSBC Holdings PLC (NYSE:HBC). The opinion dismissed
certain other claims. Plaintiff alleges that defendants, among other
things, deceived customers seeking tax refunds into obtaining high
interest loans.”

Full link: http://www.primezone.com/ca/news.shtml?d=55069

In ruling on the RICO claims, the court held that the complaint
adequately pled that the H&R Block and Beneficial defendants “operated
a scheme to defraud customers, distinct from the other ordinary
business dealings each conducted, whereby Block would attract and
mislead customers into purchasing extremely expensive loans from
Beneficial in exchange for a cut of the profits.”

Here is Household Watch’s summary of RICO:

RICO requires that an “enterprise” must be shown to exist.
“Enterprise” is broadly defined as “any individual, partnership,
corporation, association, or other legal entity, and any union or
group of individuals associated in fact although not a legal entity.”
The broad definition was thought necessary to address the great
variety of informal organized crime organizations and the control
organized crime has over legitimate businesses.

For RICO to apply, the enterprise must be shown to have engaged in a
“pattern of racketeering activity,” which means that one must show at
least two “acts of racketeering activity” over a period of ten years.
An “act of racketeering activity” consists of one of a lengthy list of
state and federal crimes. Note that the statute does not require
conviction of an “act of racketeering activity” but only that the act
have been committed.

The list of “acts of racketeering activity” includes crimes normally
associated with organized crime such as murder, kidnapping, gambling,
arson, robbery, bribery, extortion, and dealing in obscenity or drugs.
However, the list also includes numerous, less heinous crimes. Well
into the list one finds mail fraud and wire fraud. These statutes make
it a criminal offense to use the mails or electronic communications in
the commission of a crime.

When all the pieces are assembled, one can press a RICO claim by
showing that a conspiracy existed among individuals or other
organizations during which two telephone calls in furtherance of the
conspiracy were made in ten years. It is the opinion of Household
Watch and other consumer organizations that predatory acts are a
conspiracy against the consumer.

This article, HSBC and H&R Block Racketeering Charges (RICO), is just one of our articles from our Bank Horror Stories, HSBC Secrets Part 3

Bank Horror Stories monitors banking problems and customer complaints and has done so since 1999. Writers hold no stock positions. Some material is used under the fair use copyright act.

We use Thomson Reuters News Service Calais in all production material but are not associated with Thomson Reuters, banks, or financial institutions in any way.

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