[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
JUNE 19, 2008
No. 06-15388
THOMAS K. KAHN
________________________
CLERK
D. C. Docket No. 04-20727-CV-JEM
LIQUIDATION COMMISSION OF BANCO INTERCONTINENTAL, S.A.,
Plaintiff-Counter-Defendant- Appellee,
versus
LUIS ALVAREZ RENTA,
WADEVILLE INVESTMENTS, LTD.,
Defendants-Counter-Claimants-Appellants,
BANKINVEST S.A., et al.,
Defendants.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(June 19, 2008)
Before DUBINA and KRAVITCH, Circuit Judges, and COOGLER,* District
Judge.
KRAVITCH, Circuit Judge:
This civil RICO and fraudulent transfer case is a result of the 2003 collapse
of Banco Intercontinental SA (BanInter), which at that time was among the largest
banks in the Dominican Republic. After its collapse, the affairs of BanInter were
taken over by the Commission,1 a receivership established by the Dominican
government. The Commission brought this suit against Luis Alvarez Renta, a
Florida businessman, claiming that Renta, with the help of BanInter insiders,
wrongfully diverted millions in BanInter funds to finance other business ventures
and personal expenses.
Three RICO claims and one fraudulent transfer claim were tried to a jury,
which returned a verdict for the Commission in all respects. After trebling of the
racketeering damages, the judgment totals approximately $177 million. Renta now
appeals, arguing that the entire case should have been dismissed for forum non
conveniens, that the RICO claims should have been dismissed for unripeness and
because the statute cannot apply extraterritorially, that he is entitled to judgment as
*
Honorable L. Scott Coogler, United States District Judge for the Northern District of
Alabama, sitting by designation.
1
The Commission, the appellee here, is formally known as La Comision de Liquidacion
Administrativa del Banco Intercontinental.
2
a matter of law or to remittitur, and that the district court erred in denying post-
judgment relief. Our review uncovers no reversible error.
I.
The evidence at trial, taken in the light most favorable to the verdict, see
United States v. Ward, 486 F.3d 1212, 1215 (11th Cir. 2007), showed the
following.
A. The Parties
Defendant-appellant Renta is a dual citizen of the United States and the
Dominican Republic. In addition to undergraduate and graduate training in
economics and finance, Renta had years of business experience as an accountant,
management and financial consultant, and as manager or director of various family
corporations and trusts. At the time of the events in question, he worked as a
turnaround specialist; in particular, he helped rehabilitate distressed debt. Renta
and his family also owned several companies and trusts, including separate
operating, financing, and holding companies. One of those companies was
Bankinvest, a defendant below 2 but not a party to the appeal. Bankinvest is a
Dominican corporation of which Renta was president and which his family
controlled. Renta stated he used Bankinvest as a vehicle for raising capital to make
2
Default judgments were entered against defendants Bankinvest and Interduty. They do
not appeal.
3
commercial loans, the interest and fees from which were paid to Bankinvest, but
the Commission presented evidence that Bankinvest was used primarily as a
conduit to move money from BanInter to other entities. Bankinvest had checking
accounts at BanInter and at The International Bank of Miami (TIBOM) over which
Renta had signatory authority at all pertinent times, even after, as explained more
fully below, he sold Bankinvest in August 2001.
Ramon Baez-Figueroa was not a defendant in this case, but played a major
part in the story. Baez-Figueroa, a prominent Dominican and Renta’s relative by
marriage, was the President and majority owner of BanInter, and had effective
control over its operations. Like Renta, he had a hand in several other business
ventures, including a series of duty free stores that eventually became Interduty
Free, Ltd., a British Virgin Islands corporation and a defendant below. Baez-
Figueroa and Renta entered into an agreement whereby Renta would attempt to
rehabilitate the struggling duty free stores, in part by using Bankinvest’s good
credit. Later, once the stores were on their way to rehabilitation, Renta sold
Bankinvest (which by then had an equity stake in the duty free stores) to Baez-
Figueroa in August 2001.
Renta is also the sole director and a minority shareholder of appellant
Wadeville Investments, a corporation owned and controlled by the Renta family.
4
Wadeville is not an operating company. Its sole purpose is to have a bank account
at BankAtlantic, from which Renta pays personal and business expenses.
B. The Bank Transfers
The centerpiece of this case is a series of bank transactions, occurring
between January 2000 and February 2003, which proceeded in similar patterns.
The parties do not dispute that these transactions occurred nor that Renta ordered
them, but they sharply dispute their nature and significance. The Commission
argued, and the jury believed, that the funds transfers were simply looting of
BanInter. Renta argued that the funds transfers were returns of his capital
investments in, or payments on loans that he made to, the duty-free stores.
In each transaction, Renta would take some step to cause BanInter funds,
typically held in BanInter’s dollar-denominated accounts at American banks, to be
transferred to an account of Bankinvest (at TIBOM) or Interduty (at BankAtlantic
or Hamilton Bank). Although they all had the same effect, namely transferring
money from BanInter to a Renta-controlled entity, the transactions took several
different forms. Sometimes Renta signed a letter to BanInter requesting a simple
transfer of BanInter’s funds to Bankinvest. Typically, the letter request would state
that the requested funds were needed to pay on a letter of credit for which
Bankinvest was a guarantor. On other occasions, Renta would direct BanInter to
5
debit Bankinvest’s account at BanInter in a particular amount, and then direct
BanInter to transfer those funds to some other entity. But because Bankinvest’s
account at BanInter was perpetually overdrawn, each of the initial debits was, in
substance, a loan or transfer of funds from BanInter to Bankinvest.3 On other
occasions, BanInter would, at Renta’s request, issue a standby letter of credit for
Bankinvest in favor of another Bankinvest creditor, such as TIBOM. In those
cases, BanInter ultimately paid on each letter of credit.
Although most of the transfers were initially made from BanInter to
Interduty or to Bankinvest, the transferred funds did not remain there long. Rather,
the evidence showed that on most occasions, money transferred from BanInter to
Bankinvest was subsequently transferred elsewhere. Sometimes the second
transferee was Interduty, but frequently the funds found their way into the hands of
entities controlled by Renta4 or Baez-Figueroa.5 Typically, the second transfer was
for the exact same amount as the request for funds from BanInter. These
3
Renta claimed he did not know whether Bankinvest’s account was overdrawn or had
sufficient funds to cover these transactions, because he never reviewed Bankinvest’s account
statements.
4
To pick one example, the evidence showed that Renta caused BanInter to make a
$750,000 transfer from its account to Interduty’s account at BankAtlantic on or about May 31,
2002. Three days later, $750,000 was transferred from Interduty’s BankAtlantic account to
Wadeville.
5
For example, in April 2001 Renta directed BanInter to debit Bankinvest’s account in the
amount of $1.25 million and use the funds to set up a certificate of deposit at Hamilton Bank in
favor of Groupwide Florida, a company controlled by Baez-Figueroa.
6
subsequent transfers were often carried out the same day, or within a few days, of
the request for funds from BanInter. On some occasions funds were transferred to
Interduty, and ultimately used to pay its debts, even when Renta (or his
subordinates acting at his direction) represented to BanInter that the requested
funds were to be used to pay on a different letter of credit for which BankInvest
was a guarantor.
Altogether, Renta endorsed forty six such transactions which resulted in the
transfer of $48,455,625 in BanInter funds to the bank accounts of Interduty,
entities controlled by Renta or Baez-Figueroa, or, in a few cases, their personal
creditors. Of that $48 million, about $33 million ended up in Wadeville, Renta’s
personal bank account.
Meanwhile, these funds transfers were not acknowledged on BanInter’s
public records. Indeed, BanInter’s auditors at Price Waterhouse Coopers were
unaware of them until after BanInter’s collapse in the spring of 2003. The
transfers were booked as “loans” on a secret, parallel set of accounting records.
This parallel set of books had its own computer accounting system and operated as
a “bank within a bank.” Only transactions between entities controlled by Baez-
Figeroa were kept on the parallel books, known within the bank as the “VP
Portfolio.”
7
Of course, the “loans” in the VP Portfolio were treated differently from other
loans by BanInter. Normally, a credit committee would assess the viability of a
loan before approving it, and it would appear on the public books. But the VP
Portfolio “loans” to Bankinvest were approved solely by Marcos Baez-Cocco,
BanInter’s Executive Vice President, and booked on the secret parallel accounting
system at his direction. In addition to the surreptitious booking, there were also
irregularities about the interest rates attached to these “loans.” The promissory
notes (described below) which ostensibly corresponded to the “loans” to
Bankinvest were sometimes recorded in the parallel bank at different interest rates
than the notes stated on their face. In fact, some were recorded as zero percent
loans. But once the Dominican government attempted to arrange a merger between
BanInter and Banco del Progreso, the VP Portfolio loans were hurriedly moved to
the public books and, at Baez-Cocco’s direction, were all given a twelve percent
interest rate. Public acknowledgment of the VP Portfolio loans significantly
altered BanInter’s balance sheet.
Renta maintained that he did not know about the parallel books.
C. The Notes
Each transfer of funds described above corresponded to a promissory note,
or a similar Dominican instrument called an unica de cambio, signed by Renta on
8
behalf of Bankinvest.6 In other words, each note ostensibly promised to repay 7 the
same amount as one of Renta’s requests for funds or security from BanInter. The
notes ostensibly obligated Bankinvest to repay BanInter the same amount BanInter
had just transferred to Bankinvest, or which it eventually paid a creditor on behalf
of Bankinvest. The promises to repay were undertaken by Bankinvest even when
BanInter transferred the requested funds to Interduty’s accounts, not Bankinvest’s.
The Commission argued that these notes were shams intended to “paper the
file,” that is, to give the transactions the appearance of legitimacy. Sufficient
record evidence supports this characterization that a reasonable jury could agree.
First, none of the notes were ever repaid. Moreover, Renta acknowledged that
most of the notes were not signed on the date indicated. Rather, the dozens of
notes were signed mostly in two batches – one in 2000 or 2001, the other in
November or December 2002 – and not as the proceeds of each “loan” were
disbursed. In contrast, the funds to which the notes corresponded were disbursed
6
Renta argued that, given the frequency with which money moved between BanInter and
the other entities at issue, the notes did not necessarily correspond to the bank transfers. There
was ample evidence from which the jury could reject this conclusion. Most importantly, the
notes were dated to appear close in time to the transfers, even if Renta did not sign them on the
day indicated, and the notes typically were for the identical amount as the corresponding
transfer.
7
These promissory notes form the basis for the RICO predicate acts of mail and wire
fraud, the Commission arguing that Renta lacked any intent to repay the notes at the time they
were endorsed and transmitted.
9
at irregular intervals over a three year period. Thus, the jury could conclude that
most of the notes were signed in a signing spree, rather than, as Renta stated,
signed in the ordinary course of business. Additionally, Renta testified that under
Dominican law an unica de cambio must be secured by collateral, but that he did
not know if the unicas he signed on behalf of Bankinvest were collateralized. No
evidence was produced that any collateral existed. The unlawful lack of collateral
contributed to the plausibility of the inference, invited by the Commission and
drawn by the jury, that the notes were highly irregular transactions at a minimum.
Finally, Renta admitted that he, or his subordinates acting at his direction,
frequently used funds he requested from BanInter for a purpose other than that
stated in the request. For example, Renta admitted that even when he stated to
BanInter that requested funds were to be used to pay on a letter of credit for which
Bankinvest was a guarantor, he would use the funds for some other purpose if he
thought it more pressing. Given Renta’s admitted disregard of business formalities
and the suspicious circumstances under which the notes issued, the jury could have
permissibly concluded that the notes were intended to paper the file.
D. The Currency Exchange Transfers8
In addition to the transfer-and-note looting scheme, Renta was involved in a
8
These transactions formed the basis for the claim under Florida’s Uniform Fraudulent
Transfer Act. See Fla. Stat. § 726.101 et seq.
10
separate scheme that caused $10.5 million in losses to BanInter as a result of
currency exchange overdraft transactions. In these transactions, Renta wrote
checks from Bankinvest’s peso-denominated account at BanInter to the Quiseyana
currency exchange in the Dominican Republic. Most of the checks were certified;
that is, BanInter guaranteed that there were sufficient funds in Bankinvest’s
account for the transaction, and if there were not, it promised to cover the
difference. Once the checks were taken to Quiseyana, it cashed the checks,
converted the funds into dollars, and transferred the funds to Wadeville. Because
Bankinvest was overdrawn, BanInter supplied the funds. In the seven day period
between March 20 and 26, 2003, Renta endorsed $10.5 million of transfers in this
pattern.
E. Characterizing the Transfers
As noted, Renta did not dispute that he endorsed the funds transfers and the
notes. Rather, he contends the transfers to him represent repayment of money he
personally advanced to help turn around the duty free stores. Thus, the central
factual dispute in the case is whether these transfers were bona fide loan payments
or mere looting.
Importantly in this regard, Bankinvest changed ownership during the time
periods at issue, as Bankinvest was sold by Renta to BanInter. The sale and
11
merger documents are significant evidence concerning the nature of the
transactions at issue. Further background is necessary to understand why.
Before the events at issue, BanInter had made loans to the duty free stores
controlled by Baez-Figueroa. The stores were financially distressed, however, and
were having difficulty repaying the loans. In 1997, Baez-Figueroa sought Renta’s
help in restoring their profitability. At that time, each of the duty free stores was
owned by a separate corporation controlled by Baez-Figueroa; at some later point
they were consolidated into one company, Interduty. When Renta was brought in
to turn around the stores in 1997, he needed to improve their creditworthiness. He
testified that he used Bankinvest, which had good credit, to borrow money on
behalf of Interduty in order to secure more favorable financing for the stores.
Bankinvest also obtained an equity stake in Interduty. Thus, Bankinvest was
carrying debt arising from loans for the benefit of Interduty when Renta sold
Bankinvest (including its ownership stake in Interduty) to Baez-Figueroa in August
2001.
Critically, Renta also alleges that some of that debt was to him; that is, he
contributed substantial amounts of personal capital to the duty free stores venture.
Thus, the transfers of funds from BanInter to Bankinvest and Interduty,9 which
9
When Bankinvest was sold to Baez-Figueroa, it assumed Interduty’s debts. Renta
directed BanInter to debit Bankinvest’s account in the amount of some $37.6 million, which was
12
typically found their way into Renta’s hands, represented a repayment of loans he
made. Renta further maintained that he and Baez-Figueroa contemplated this
arrangement whereby Renta could inject or remove personal funds as needed in his
discretion. Further, Renta maintained that this arrangement was essentially a
gentlemen’s agreement between himself and Baez-Figueroa, consummated on a
handshake and not reduced to writing. Of course, if the jury believed his
testimony, it should have found for Renta, because the funds transfers would be
payments of bona fide liabilities.
If Renta injected personal funds into the duty free store venture, Bankinvest
would indeed have substantial liabilities to him. Thus, one would expect the
documents consummating the sale of Bankinvest to Baez-Figueroa to recognize
these obligations. They do not, or at least, there was sufficient evidence for the
jury to reject this characterization. The sale documents do not specifically list the
existence or amount of any debts owed by Bankinvest to Renta. Rather, the
agreement provided that Renta represented that Bankinvest’s only liabilities were
used to pay off Interduty’s debts. Because Bankinvest was overdrawn, that amount then became
a liability of Bankinvest to BanInter, which was assumed by Bankinvest’s purchaser, Baez-
Figueroa. Renta admitted that he did not know at the time he ordered the debit whether
Bankinvest’s account at BanInter had sufficient funds to cover this transaction, but stated that he
assumed it did, because (according to Renta) BanInter asked him to use Bankinvest to pay
Interduty’s liabilities in this fashion.
Not coincidentally, by the time of trial, Renta again controlled the duty free stores, which
had $37 million less debt than when Renta originally took them over.
13
(i) those to BanInter or related entities,10 including Interduty, and (ii) credit
obligations with other banks directly or indirectly guaranteed by BanInter. The
agreement did not specifically state that Bankinvest owed Renta or Wadeville $30
million. Renta tries to argue that the agreement indirectly referenced this alleged
liability, because it noted that the sale was subject to liabilities related to Interduty,
which included the alleged liability to him. But the sale documents hardly compel
this conclusion, and the jury was free to disbelieve Renta’s characterization of
these transactions. The Bankinvest sale documents state that the company had
liabilities related to Interduty, but they do not state that any of those liabilities are
to Renta. At best, the sale documents are ambiguous, and did not compel the court
or the jury to accept Renta’s story.
Renta also made numerous inconsistent or implausible statements which
may have undermined his credibility in stating that Bankinvest owed him money.
For example, he admitted telling inconsistent stories about the purposes of the
funds transfers – telling BanInter and TIBOM that they were to pay on letters of
credit for which Bankinvest was liable, but frequently transferring funds to
Wadeville, his personal expense account, or to Interduty, which then transferred
them to Wadeville. And it appears Renta never represented to BanInter that the
10
It is important to note that the sale documents specifically state that Bankinvest has
overdraft liabilities to BanInter.
14
funds he requested were repayment of loans by him. Renta also stated that he did
not need documentation concerning his injection of funds into the duty free stores
because he had adequate collateral for the loans, namely, shares of the duty free
stores. But the evidence showed that Renta was required to relinquish those shares
as collateral for another loan. In short, although the jury would have been free to
accept Renta’s testimony that the transfers to him were payments of loans he made
to the duty free stores, there were also ample grounds for it to reject this
characterization of the transactions.
Thus, because there was a sufficient basis for the jury to conclude that the
funds transfers did not represent repayment of loans by Renta to the duty free
stores, the jury could permissibly find that Renta had no right to the funds. As
explained in part II, this affects the analysis of the sufficiency of the evidence on
the RICO claims.
F. The Fallout
TIBOM officials became interested in suspicious account activity at
Bankinvest in October 2002. They approached Renta, who in the process of
explaining the account activity stated that he maintained financial and operational
control of Bankinvest “pursuant to an agreement with other shareholders.”
Once it became evident that BanInter was in financial distress, there was
15
allegedly an attempted merger with Banco del Progreso, another Dominican bank,
which was encouraged by the Dominican government. Renta played a part in the
negotiations. The merger was never consummated, but Renta argues that the
merger documents support his theory of the case. This is because in the
documents, Baez-Figueroa acknowledged his personal liability on $45 million in
liabilities of Bankinvest and Interduty to BanInter. (As the funds transfers
effectively changed Bankinvest’s alleged liability to Renta into a Bankinvest
liability to BanInter, Baez-Figueroa’s acknowledgment supposedly validated the
existence of a Bankinvest debt to Renta.) But in the merger documents Baez-
Figueroa did not acknowledge liability on all of Bankinvest’s debt, and the
damages sought here encompass the amount he did not acknowledge. The merger
documents do not help Renta.
Ultimately, BanInter collapsed in the spring of 2003. This suit followed in
2004. It was accompanied by parallel civil and criminal proceedings against
Renta, Baez-Figueroa, and Baez-Cocco in the Dominican Republic.
II.
On appeal, Renta11 argues (i) that the Commission’s RICO claims are not
ripe, (ii) that RICO does not apply extraterritorially or does not apply to the
11
We use “Renta” to refer to both appellants, as Wadeville is controlled by Renta and is
not separately represented.
16
putatively extraterritorial conduct at issue here, (iii) that he should have been
granted judgment as a matter of law on the RICO claims, and (iv) that the case
should be dismissed, or the judgment remitted, for failure to plead fraud with
particularity. We review these issues de novo.12
Renta also argues (v) that the entire case should have been dismissed in
favor of a Dominican forum, and (vi) that post judgment relief is warranted based
on newly-discovered evidence. We review these decisions for abuse of
discretion.13
III.
A. RICO Ripeness
Renta first argues that before the Commission can sue him under RICO, it
must pursue any contractual remedies under the promissory notes against Baez-
Figueroa. Baez-Figueroa is the allegedly responsible party because when he
bought Bankinvest, he assumed its liabilities to BanInter. Although Renta labels
12
See Maiz v. Virani, 253 F.3d 641, 654 (11th Cir. 2001) (RICO standing); Reahard v.
Lee Cty., 30 F.3d 1412, 1415 (11th Cir. 1994) (Article III ripeness); United States v.
MacAllister, 160 F.3d 1304, 1306-07 (11th Cir. 1998) (extraterritorial application of a statute);
Action Marine, Inc. v. Continental Carbon Inc., 481 F.3d 1302, 1309 (11th Cir. 2007) (judgment
as a matter of law); United States v. R & F Properties of Lake County, Inc., 433 F.3d 1349, 1355
(11th Cir. 2005) (denial of motion to dismiss).
13
See Ford v. Brown, 319 F.3d 1302, 1308 (11th Cir. 2003) (forum non conveniens);
Frederick v. Kirby Tankships, Inc., 205 F.3d 1277, 1287 (11th Cir. 2000) (post-judgment relief
under Rule 60).
17
his argument lack of standing and some cases use the same language,14 he is really
arguing that the Commission’s claims are unripe – that is, its damages are too
uncertain for a claim to have accrued – because it might get some of its money
back elsewhere. Renta relies chiefly on Second Circuit caselaw concluding that a
RICO plaintiff’s damages must be “clear and definite” before a claim accrues. See,
e.g., Denney v. Deutsche Bank AG, 443 F.3d 253, 267 (2nd Cir. 2006) (citation
omitted). He argues this heightened standard of certainty in pleading and proving
damages prevents accrual of these claims, because BanInter has not yet reached a
net loss figure by collecting on the debts.
This argument is unpersuasive. First, our opinion in Arabian American Oil
Co. v. Scarfone, 939 F.2d 1472, 1478-79 (11th Cir. 1991), arguably rejects Renta’s
premise, as it permits RICO claims even when a breach of contract claim would
also lie against the RICO defendant. Other circuits have rejected the “clear and
definite” standard for accrual of a RICO claim outright, holding that a claim may
accrue even when the amount of loss may be reduced by other lawsuits. These
courts hold that the possibility of recovery on other claims affects the amount of
14
RICO standing is really just a heightened proximate causation standard, as it requires a
claimant to prove that he was injured in his business or property “by reason of” the RICO
violation. 18 U.S.C. § 1964(c); First Nationwide Bank v. Gelt Funding Grp., 27 F.3d 763, 767
(2nd Cir. 1994) (RICO standing requires predicate acts, injury to business or property, and
causation). But the construction urged by Renta that damages must be “clear and definite,”
Denney, 443 F.3d at 267 (citation omitted), although sometimes stated as a standing
requirement, is better framed as one of ripeness.
18
RICO damages, not the accrual of the RICO claim. See, e.g., Grimmett v. Brown,
75 F.3d 506, 516-17 (9th Cir. 1996). Even assuming without deciding that the
Second Circuit’s “clear and definite” standard is the correct one and is consistent
with Arabian American Oil, it does not require the metaphysical certainty in
damages that Renta suggests, and he could not obtain relief thereunder. Applying
the “clear and definite” standard, the Second Circuit has concluded that the mere
possibility of a state law claim for fraud or breach of contract does not necessarily
render RICO claims predicated on fraud unripe. This is particularly true when the
underlying debt is unsecured and other recovery is unlikely because the defendant
has stripped a corporate defendant of assets. GICC Capital v Technology Finance
Grp., 30 F.3d 289, 293 (2nd Cir. 1994). (Contrast that situation to one where a
secured debtor-plaintiff has not yet foreclosed on collateral, meaning damages
have not yet been incurred or are not ascertainable with the requisite clarity. See
Motorola Credit Corp. v. Uzan, 322 F.3d 130, 136-38 (2nd Cir. 2003), and First
Nationwide Bank, 27 F.3d at 768-69.)
In other words, there is no per se rule – in this Circuit, the Second Circuit, or
elsewhere – that a plaintiff must pursue every other avenue of recovery, such as
realization on collateral or claims for fraud or breach of contract, before his RICO
claim is ripe. Nor is there a per se rule to the contrary. Rather, whether a plaintiff
19
must pursue other remedies before a RICO claim depends on whether those other
contingencies are sufficiently likely to mitigate the plaintiff’s loss that damages in
the RICO case cannot be ascertained, or may not have occurred at all. RICO need
not necessarily be the claim of last resort, but neither can a plaintiff seek to treble
damages that he did not actually incur.
With these principles in mind, we do not believe the Commission’s claim is
unripe simply because the Commission has not pursued contractual remedies, if
any, against Baez-Figueroa. First, the notes probably are not enforceable contracts;
they are shams lacking consideration. The notes were issued under highly irregular
circumstances, BanInter never took steps to enforce them against Bankinvest
before the bank’s collapse, and assuming the notes were signed in a signing spree,
many of the bank transfers to which they ostensibly corresponded could not have
been consideration for the notes. The transactions are more plausibly characterized
as conversion than fraudulent inducement of unsecured loans. Even assuming the
notes created enforceable contract rights, the damages BanInter suffered at Renta’s
hands were not so uncertain that threshold dismissal was warranted. Although the
ongoing Dominican civil proceedings may result in possible recovery against
Baez-Figueroa, who has significant personal assets but is also in jail and facing
other claims from the collapse of BanInter, this mere possibility does not render the
20
amount of damages unclear. This is not a case like Motorola, 322 F.3d at 136-38,
or First Nationwide Bank, 27 F.3d at 768-69, where it was virtually certain that the
amount of a fraudulently induced debt would be reduced by foreclosure on
collateral. Recovery on the notes is, at best, a remote and highly contingent
possibility. These RICO claims were ripe enough to be tried, under any standard.
B. Extraterritoriality
Next, Renta argues that the RICO claims should be dismissed because RICO
cannot reach extraterritorial conduct, or at least, cannot reach the “extraterritorial”
conduct at issue here. Although Renta explains his argument in terms of “choice
of law,” we believe the issue is properly considered through the lens of
extraterritoriality, because “[w]here a federal statute is involved . . . a choice of law
analysis does not apply in the first instance. The initial question, rather, is whether
Congress intended the statute in question to apply to conduct occurring outside the
United States. This is a question of statutory interpretation . . . not a question of
choice of law.” Orion Tire Corp v. Goodyear Tire & Rubber, 268 F.3d 1133, 1137
(9th Cir. 2001); see also United States v. Plummer, 221 F.3d 1298, 1304-06 (11th
Cir. 2000) (whether a statute applies extraterritorially is a matter of statutory
interpretation).
The first question, one of first impression in this Circuit, is whether RICO
21
applies extraterritorially at all. Courts have divided over this issue. Some have
concluded that RICO does not apply extraterritorially, essentially because
Congress made no explicit statement to that effect. See, e.g., Jose v. M/V Fir
Grove, 801 F. Supp. 349 (D. Or. 1991). The more widely accepted view, and the
one we adopt today, is that RICO may apply extraterritorially if conduct material to
the completion of the racketeering occurs in the United States, or if significant
effects of the racketeering are felt here. See, e.g., North-South Fin. Corp. v. Al-
Turki, 100 F.3d 1046, 1051 (2nd Cir. 1996); Poulos v. Caesar’s World, Inc., 379
F.3d 654, 663-64 (9th Cir. 2004) (citations omitted).
It is clear that the effects test is not satisfied here. No United States person
or business harmed by this scheme has been brought to our attention. The effects
were felt predominantly in the Dominican Republic, where BanInter was based and
where the majority of its depositors and creditors were located. Extraterritorial
jurisdiction, if it exists, must derive from the conduct test.
We also agree with the North-South court that use of the conduct test to
assert extraterritorial RICO jurisdiction must be undertaken with particular care.
The conduct test is borrowed from the securities laws, but American courts will not
exercise jurisdiction over a transnational securities fraud suit if the conduct
occurring in the United States is preparatory or far removed from the
22
consummation of the fraud. See North-South Fin., 100 F.3d at 1052-53. Likewise,
extraterritorial RICO jurisdiction may not be appropriate when conduct occurring
in or directed at the United States is not central to consummation of the
racketeering, for example, where the sole nexus is utilization of American mail or
wires to prepare for or cover up a fraud scheme perpetrated by foreigners against
other foreigners. Id.
But that is not this case. Significant amounts of conduct in furtherance of
the RICO conspiracy occurred in both the United States as well as the Dominican
Republic. Indeed, the conduct occurring in, or directed at, the United States in this
case was not an insubstantial or preparatory part of the overall looting scheme, but
the actual means of its consummation. This scheme was carried out by directing
transfers of funds to and from accounts at American banks, including the American
bank accounts of the victim, BanInter, and of one RICO enterprise, Bankinvest.
Among its primary goals was enrichment of an American entity, Wadeville,
controlled by an American defendant. We have no doubt that under these
circumstances, Congress would intend BanInter to have recourse to American
courts and remedies.
C. Judgment as a Matter of Law
Renta next argues that he is entitled to judgment as a matter of law on all
23
claims. Three RICO claims were raised: one under § 1962(a), which prohibits
investing the proceeds of a pattern of racketeering activities in an enterprise, and
two RICO conspiracies, one conspiracy to violate § 1962(a), and also one
conspiracy to violate § 1962(c), which prohibits conducting the affairs of an
enterprise through a pattern of racketeering activity. BanInter was the RICO
enterprise for the § 1962(c) conspiracy, and Bankinvest was the enterprise for the
other two claims. The alleged predicate acts were mail and wire fraud (based on
transmission of the notes) as well as money laundering and interstate transportation
and receipt of stolen property (based on the funds transfers). The jury found for
the Commission on all three counts.
Renta argues that the Commission did not prove: (i) the existence of either
conspiracy, (ii) the “investment injury” putatively required by § 1962(a), (iii)
scienter as to all three RICO claims and the fraudulent transfer claim, or (iv)
proximate causation as to all three RICO claims.
We conclude that the Commission adequately proved a conspiracy to violate
§ 1962(c), and that the full amount of damages found by the jury was proximately
caused thereby. To prove a conspiracy to violate § 1962(c), a plaintiff must
demonstrate that a defendant “objectively manifested, through words or actions, an
agreement to participate in the conduct of the affairs of the enterprise” through a
24
pattern of racketeering activity. United States v. Starrett, 55 F.3d 1525, 1543 (11th
Cir. 1995) (citation omitted). An agreement to participate in a RICO conspiracy
may be shown either by proving “an agreement on the overall objective of the
conspiracy” or by showing that the defendant agreed to commit two predicate acts.
United States v. Browne, 505 F.3d 1229, 1264 (11th Cir. 2007) (citation omitted).
The existence of an agreement, as well as its objective, may be inferred from
circumstantial evidence demonstrating “that each defendant must necessarily have
known that the others were also conspiring to participate in the same enterprise
through a pattern of racketeering activity.” Id. (citation omitted). But this does not
require proof that “each conspirator agreed with every other conspirator . . . [or]
was aware of all the details of the conspiracy.” Starrett, 55 F.3d at 1544. Indeed,
participation in a conspiracy may be inferred merely from acts which furthered its
object. United States v. Kopituk, 690 F.2d 1289, 1323 (11th Cir. 1982) (citation
omitted).
Here there is no need to infer the existence of an agreement. Renta
represented to TIBOM that he controlled and operated Bankinvest, and that he did
so pursuant to an agreement with other shareholders. Because the evidence
showed Bankinvest existed in large measure to serve as a conduit for BanInter
funds headed for Wadeville and other entities controlled by the conspirators, the
25
jury could properly infer that the agreement’s scope extended to the conduct of
BanInter’s affairs as well.
Moreover, there was abundant circumstantial evidence from which the jury
could infer that the object of the agreement was to conduct BanInter’s affairs
through a pattern of racketeering activity, to wit, a pattern of diverting money from
BanInter through transactions constituting the transmission and receipt of
converted funds.15 In fact, the conspiracy largely achieved its goal. Millions in
BanInter funds to which Renta had no right were transferred to his control. Even
though Bankinvest was perpetually overdrawn, Renta’s transfer requests were
always honored by BanInter, precisely because of the business relationships and
agreements between Renta and BanInter insiders. The jury could certainly
conclude that the acknowledged agreement between Renta and Baez-Figueroa was
what kept the money flowing. Indeed, it would be difficult to conclude otherwise.
It is unlikely (to say the least) that BanInter would permit an ordinary depositor to
rack up massive overdraft positions and fail to make any payments on “loans” over
15
Although Renta’s conduct may have violated other predicate statutes, the most obvious
predicate acts on this record are violations of 18 U.S.C. §§ 2314-15, which prohibit transmission
and receipt of converted funds, respectively. Section 2314 provides that “whoever . . . transmits,
or transfers in interstate or foreign commerce any . . . money, of the value of $5,000 or more,
knowing the same to have been stolen, converted, or taken by fraud” commits a felony. Section
2315 provides that “whoever receives . . . any . . . money of the value of $5,000 or more . . .
which have crossed a State or United States boundary after being stolen, unlawfully converted,
or taken, knowing the same to have been stolen, unlawfully converted, or taken,” commits a
felony.
26
a period of several years, without suffering any attempts at collection or even a
tightening of credit. But this is precisely what BanInter tolerated from Bankinvest,
and it did so because of an agreement between Renta and the two Baezs about how
to operate BanInter.
Renta explained his indifference to BankInvest’s overdrafts by his
relationship with Baez-Figueroa: he stated that he thought Baez-Figueroa, as owner
of Bankinvest and controlling shareholder of BanInter, would take care of any
overdrafts. Renta argued that because Bankinvest owed him money and, like
BanInter, was controlled by Baez-Figueroa, he was merely converting
Bankinvest’s liability to him to a liability to BanInter, at Baez-Figeroa’s request.
But for that argument to succeed, Bankinvest would have had to owe Renta money.
The jury found it did not, and quite reasonably so.
Further, contrary to his protestations, Renta was not an unwitting participant
in the looting of BanInter. He protests that he lacked the requisite scienter for the
RICO predicate acts; instead, he argues he acted in good faith, as he did not know
that BanInter was funding his transfer requests with overdrafts rather than, as he
expected, personal funds of Baez-Figueroa. The predicate acts alleged here – mail
and wire fraud, transportation of converted funds, and money laundering – each
require proof of scienter. Republic of Panama v. BCCI Holdings (Luxembourg)
27
SA, 119 F.3d 935, 948-49 (11th Cir. 1997) (citations omitted). Transportation and
receipt of converted funds in particular requires knowledge that the funds were
converted or taken by fraud. Id. Under the circumstances, Renta’s knowledge (or
deliberate ignorance) in this regard was a jury question. The jury could very well
have disbelieved Renta’s testimony that he never knew about Bankinvest’s
negative account balances, not only because it could have made an adverse
credibility determination, but also because of the statement in the Bankinvest sale
documents signed by Renta that Bankinvest did, in fact, have overdraft liabilities to
BanInter. Moreover, Renta’s participation in “papering the file” with the notes
further contributes to an inference of scienter with respect to his receipt of the
funds. In other words, Renta knew that Bankinvest was receiving BanInter’s
money in the wire transfers rather than its own, and when asked to participate in a
cover up by signing sham promissory notes, he obliged. An inference of scienter is
perfectly plausible on this record.
In sum, the record supports the jury’s conclusion that Renta was a
participant in a conspiracy to conduct the affairs of BanInter through a pattern of
transactions which constituted transmission and receipt of converted funds, that the
transfers at issue were carried out pursuant to that agreement and succeeded
because of it, and that Renta possessed the requisite scienter.
28
Renta also asserts that he was entitled to judgment as a matter of law based
on the equitable defense of in pari delicto. Under this defense, “a plaintiff who has
participated in wrongdoing may not recover damages resulting from the
wrongdoing.” Official Committee of Unsecured Creditors of PSA, Inc. v.
Edwards, 437 F.3d 1145, 1152 (11th Cir. 2006) (citation omitted) (recognizing that
in pari delicto is a defense to RICO claims). Renta argues that Baez-Figueroa, a
co-conspirator, was the controlling shareholder of BanInter and that his
participation in the wrongdoing is appropriately imputed to the bank, barring its
recovery.
We agree with the district court that imputation of wrongdoing or guilty
knowledge to BanInter should not occur as a matter of law here. Imputation is
inappropriate where a jury could permissibly conclude that an agent (here, Baez-
Figueroa) was engaged in fraud or self-dealing adverse to a corporate principal
(here, BanInter). See FDIC v. Lott, 460 F.2d 82, 88 (5th Cir. 1972) 16 (bank
officer/director’s knowledge not imputed to bank where he fraudulently dealt with
bank in his own interest); see also Restatement (Third) of Agency § 5.04; Bank of
China v. NBM LLC, 359 F.3d 171, 179 (2nd Cir. 2004).
Renta argues that in pari delicto necessarily applies because Baez-Figueroa
16
Pursuant to Bonner v. City of Pritchard, 661 F.2d 1206 (11th Cir. 1981) (en banc), this
former Fifth Circuit decision is binding precedent.
29
was the controlling shareholder of BanInter. This argument confuses the in pari
delicto defense itself with the agency law principles that permit it to be asserted
against a corporate plaintiff. As Renta argues, we have recognized that in pari
delicto doctrine bars recovery by a corporation whose sole shareholder is engaged
in wrongdoing, Edwards, 437 F.3d at 1149, and Renta cites other cases permitting
the defense to be asserted against a corporation whose controlling shareholder
engaged in the wrongdoing which forms the basis of the plaintiff’s claims. See,
e.g., Nisselson v. Lernout, 469 F.3d 143, 157 (1st Cir. 2006). The defense is,
however, not available because of the wrongdoer’s ownership of a plaintiff
corporation, but because of his agency relationship with it. Indeed, wrongdoing by
a mere employee might be a sufficient basis for the defense in some cases. The
point is that corporations act only through their agents, and an agent’s guilty
conduct and knowledge is typically imputed to his principal. Once the agent’s
knowledge and conduct are imputed to the corporation, the corporation is
considered a wrongdoer; only then does in pari delicto become a defense against it.
The question here is not whether in pari delicto would bar recovery by BanInter if
it is a wrongdoer – Edwards is clear that it would – but whether BanInter is a
wrongdoer at all, that is, whether the wrongdoing of its agents should be imputed
to it. The adverse interest exception addresses this question, and it typically
30
presents a jury question. See Bank of China, 359 F.3d at 179.
The district court held, and our review of the record confirms, that there was
sufficient evidence from which the jury could conclude that Baez-Figueroa acted
adversely to BanInter’s interests, indeed, looted it alongside Renta. Thus,
imputation of Baez-Figueroa’s wrongdoing to the bank would be inappropriate,
and Renta’s defense fails. It would be perverse indeed if the Commission was
unable to pursue a claim on behalf of BanInter’s other stakeholders solely because
some of the people who stole from it were insiders in a position to carry out the
fraud!
Because the § 1962(c) conspiracy provides a sufficient evidentiary basis to
affirm the judgment in full, and because Renta’s in pari delicto defense fails, we
need not reach Renta’s other arguments about the sufficiency of the evidence.
D. Particularized Pleading
Renta next argues the case should be dismissed, or the judgment remitted,
for failure to plead the predicate acts of fraud with particularity, as the verdict was
based on numerous fraudulent promissory notes not pleaded in the complaint.
When a RICO claim is based on predicate acts involving fraud, those
predicate acts must be pleaded with particularity, in accordance with Fed. R. Civ.
P. 9(b). See, e.g., Ambrosia Coal & Const. Co. v. Pages Morales, 482 F.3d 1309,
31
1316-17 (11th Cir. 2007); see also 5 Wright & Miller, Federal Practice and
Procedure § 1251.1. We now hold that RICO predicate acts not sounding in fraud
need not necessarily be pleaded with the particularity required by Fed. R. Civ. P.
9(b). When fraud is pleaded as an alterative claim, the non-fraud claims in the
complaint need not be pleaded with particularity unless the same misrepresentation
forms the basis of both the fraud and non-fraud claim. Wagner v. First Horizon
Pharmaceutical Corp., 464 F.3d 1273, 1277-78 (11th Cir. 2006) (requiring
particularized pleading when the same misrepresentation supports fraud claims
under Rule 10b-5 and non-fraud claims under § 11 of the Securities Exchange
Act). The rule should be the same when the alternative theory of the case is a
predicate act rather than an independent claim.
Applied here, these principles suggest that the transactions underlying the
verdict need not have been pleaded with particularity because the non-fraud RICO
predicate statutes do not require proof of a misrepresentation. The verdict was
based on $48.5 million in wire transfers to Bankinvest, Interduty, and Groupwide
Florida, and the $10.5 million in currency exchange transfers to Wadeville. There
was a sufficient evidentiary basis to conclude that these transfers by themselves
violated 18 U.S.C. § 2314-15, regardless of whether the related promissory notes
or transfer requests would also support a wire fraud claim. Because proving a
32
violation of the stolen property statutes does not require proof of a
misrepresentation,17 and because the evidence was sufficient to sustain the verdict
based on these non-fraud predicate acts, no error has been shown.
E. Forum Non Conveniens
Renta next argues the entire case should have been dismissed for forum non
conveniens. That doctrine authorizes a court with venue to decline to exercise its
jurisdiction when the parties’ and court’s own convenience, as well as the relevant
public and private interests, indicate that the action should be tried elsewhere.
Ford, 319 F.3d at 1307. Domestic plaintiffs enjoy a strong presumption that their
chosen forum is convenient; foreign plaintiffs, such as the Commission, enjoy a
weaker presumption. Leon v. Million Air, Inc., 251 F.3d 1305, 1311 (11th Cir.
2001). A defendant seeking dismissal for forum non conveniens bears the burden
of demonstrating (i) that an adequate alternative forum is available, (ii) that
relevant public and private interests weigh in favor of dismissal, and (iii) that the
plaintiff can reinstate his suit in the alternative forum without undue inconvenience
17
When a violation of § 2314 is based on transmission of funds, the statute only requires
proof that the defendant transmitted more than $5,000 in interstate or foreign commerce, and that
the defendant knew the money was stolen, converted, or obtained by fraud. Cf. United States v.
Herring, 602 F.2d 1220, 1224 (5th Cir. 1979); Pereira v. United States, 347 U.S. 1, 9 (1954).
Likewise, proof under the receipt of stolen property statute requires that a defendant receive
$5,000 or more which crossed a state or United States boundary after having been stolen or
converted, and that the defendant know the funds were stolen or converted. 18 U.S.C. § 2315.
Neither statute requires proof of a misrepresentation.
33
or prejudice. Membreno v. Costa Crociere SPA, 425 F.3d 932, 937 (11th Cir.
2005). Pertinent private interests of the litigants include relative ease of access to
evidence in the competing fora, availability of witnesses and compulsory process
over them, the cost of obtaining evidence, and the enforceability of a judgment.
Ford, 319 F.3d at 1307 (citing Gulf Oil v. Gilbert, 330 U.S. 501, 508-09 (1947)).
Relevant public interests include the familiarity of the court(s) with the governing
law, the interest of any foreign nation in having the dispute litigated in its own
courts, and the value of having local controversies litigated locally. Id.
Finally, the Commission urges us to adopt the rule of some courts requiring
a defendant to show “great prejudice” to succeed on a post-trial forum non
conveniens motion, even if it is merely a renewal of a denied pre-trial motion
where “great prejudice” need not be shown. See Zelinski v. Columbia 300 Inc.,
335 F.3d 633, 643 (7th Cir. 2003); McLennan v. American Eurocopter Corp. Inc.,
245 F.3d 403, 423 (5th Cir. 2001) (citing In Re Air Crash Disaster Near New
Orleans, 821 F.2d 1147, 1168 n.35 (5th Cir. 1987) (en banc), vacated on other
grounds sub nom. Pan American World Airways Inc. v. Lopez, 490 U.S. 1032
(1989), opinion reinstated on remand, 883 F.2d 17 (5th Cir. 1989)). But we need
not decide whether to adopt a “great prejudice” requirement for post-trial motions
because Renta has not made the other showings necessary for relief.
34
Our review of the district court’s orders addressing forum non conveniens
reveals no abuse of discretion. Although a Dominican forum was available and
adequate, Renta has not shown error in the district court’s conclusion that the
public and private factors were in equipoise and, thus that the presumption in favor
of the plaintiff’s chosen forum should govern.
First, we cannot say the district erred in finding the public factors in
equipoise. Although the effects of the fraud were felt mostly in the Dominican
Republic, American law properly governs BanInter’s claims, militating in favor of
an American forum.
As for private factors, we again agree with the district court. Significant
amounts of evidence were located in each country. In particular, because the
transactions consummating the looting were mostly carried out between U.S.
banks, including BanInter’s dollar-denominated accounts at U.S. banks, the “paper
trail” evidence was predominantly located in the United States, as were several
necessary witnesses from those banks. Renta nonetheless argues that there was an
unfair evidentiary imbalance, as the district court lacked subpoena power over key
documents and witnesses, including Baez-Figueroa and Baez-Cocco. The
unavailability of this evidence was all the more unfair to Renta, he argues, because
the Commission had access to it. The Commission replies, in essence, that Renta
35
testified to the same facts which he seeks to prove by the witnesses and documents
allegedly in the Dominican Republic; thus, even assuming the evidence is as Renta
describes, it would be cumulative. Fortunately, we need not speculate about the
missing evidence, because the most significant documentary evidence from the
Dominican Republic – Bankinvest’s ledger and the reports of an audit of BanInter
– are part of the record on appeal. As explained below in our analysis of Renta’s
motion for post-judgment relief, this was not the type of smoking gun evidence
that would require retrial. We cannot say that its absence at trial so dramatically
tipped the balance of interests that the district court abused its discretion in not
dismissing the case. Likewise, although Baez-Figueroa and Baez-Cocco may have
been available in a Dominican forum, we doubt that their availability so outweighs
the probative value of the evidence available only in an American forum that the
district court abused its discretion in maintaining jurisdiction.
F. Post-Judgment Relief
Renta finally argues that the district court abused its discretion in denying
him post-judgment relief under Fed. R. Civ. P. 60(b)(2) based on newly discovered
evidence, namely, the BanInter audit report and the ledger of Bankinvest. To
obtain relief under Rule 60(b)(2), a party must show that evidence was (i)
discovered after trial, (ii) material, (iii) not merely impeaching or cumulative, (iv)
36
likely to produce a different result on retrial, and further that the party exercised
due diligence to obtain the evidence. Waddell v. Hendry Co. Sheriff’s Office, 329
F.3d 1300, 1309 (11th Cir. 2003).
This evidence was allegedly unavailable at trial because the audit report was
not yet completed and the ledger was in the hands of Renta’s accountant, who was
not authorized to release it for reasons related to the then-ongoing Dominican
proceedings. Yet the ledger and audit are not likely to produce a different result on
retrial, for essentially the reasons propounded by the district court. The audit is of
questionable relevance and is largely cumulative of Renta’s own testimony. It
certainly does not decisively establish the critical point that Renta would need to
establish to obtain relief: that he was owed millions by Bankinvest.
The ledger is a closer question. Like the Bankinvest sale documents, it
could be construed as consistent with Renta’s theory of the case. (Renta testified
to many of the facts he would seek to prove with the ledger, but because Renta’s
theory of the case is an implausible oral agreement for which he had no
documentary proof, strong documentary support for his assertions might have
changed the result.) The ledger arguably establishes more detail about
Bankinvest’s liabilities than Renta himself could provide. But it does not
conclusively establish that Bankinvest owed Renta the millions he claimed. As
37
with the case of the Bankinvest sale documents, for the ledger to support Renta’s
theory of the case, the jury would have had to accept his characterization of
particular ambiguous line items. Moreover, there are significant questions about
the authenticity of the ledger. In short, with or without the ledger, this case hinged
on Renta’s credibility. Given the other evidence in the case, the ledger was not
likely to have altered the jury’s assessment of Renta’s credibility, nor does it
otherwise suggest that the result of a new trial would likely be different. The
district court did not abuse its discretion in denying post-judgment relief.
G. Conclusion
Renta raises assorted other arguments, which do not merit relief or further
analysis. For the foregoing reasons, the judgment of the district court is
AFFIRMED.
38