420 F. App'x 6
1st Cir.2011Background
- IFC sued Adams, Britto, Williams, CCC and others in a 2005 RICO/Massachusetts state-law action for a multi-million-dollar rug-fraud scheme.
- By 2008, only Adams and Jane Dziemit remained as defendants; a joint five-day trial resulted in verdicts against both for RICO and common-law fraud.
- The scheme involved fake purchase orders, invoices, and “key-recs” to induce IFC to pay fraudulent sums for non-existent rug shipments.
- Dziemit, formerly a mortgage lender, lent money to Remco/Mansfield Rug partners and drafted and delivered fraudulent invoices to IFC.
- Dziemit profited from these arrangements through checks and transfers, with limited or no security and minimal documentation of the loans.
- The district court denied judgments on a Massachusetts Chapter 93A claim and ordered a $10,000 appeal bond; the court also denied post-trial and motion practice related to willful-blindness and evidence of knowledge.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Dziemit knowingly participated in mail/wire fraud (RICO) | IFC argues evidence shows willful participation via circumstantial proof | Dziemit claims she was peripheral and unaware of the fraud | Yes; sufficient evidence supports knowing, willful participation |
| Whether a willful-blindness instruction was proper for common-law fraud | IFC supported willful blindness as a basis for knowledge | Dziemit contends instruction was improper in civil fraud | Harmless error; verdict would stand without the instruction |
| Whether the common-law fraud claim was sufficiently supported | IFC can rely on actual knowledge or willful blindness | Insufficient evidence of knowledge | Sustained; evidence supported fraud finding |
| Whether IFC’s Chapter 93A claim should have been judgment on the record | IFC maintained a valid state-law claim despite RICO finding | District court properly reserved/denied judgment | Declined to Rule on 93A claim; affirmed on other grounds |
| Whether Dziemit should post an appeal bond including appellate attorneys’ fees | Rule 7 bond may include appellate fees under fee-shifting statutes | Bond should not include attorneys’ fees | Rule 7 allows inclusion of appellate attorneys’ fees when statute permits recoverable costs; bond affirmed |
Key Cases Cited
- Kenda Corp. v. Pot O' Gold Money Leagues, Inc., 329 F.3d 216 (1st Cir. 2003) (pattern of racketeering requires two or more acts; incest inferences allowed)
- Bourjaily v. United States, 483 U.S. 171 (U.S. 1987) (courts may rely on circumstantial evidence to prove knowledge)
- Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (U.S. 1985) (establishes RICO predicate act framework)
- Marek v. Chesny, 473 U.S. 1 (U.S. 1985) (costs and attorneys’ fees under fee-shifting statutes may be included in Rule 7 bonds)
- Adsani v. Miller, 139 F.3d 67 (2d Cir. 1998) (Rule 7 costs may include appellate fees when underlying statute allows)
- Marek v. Chesny, 473 U.S. 1 (U.S. 1985) (reiterated scope of ‘costs’ including fees under fee-shifting statutes)