U.S. High Court Allows RICO Tax Lien Lawsuit

     WASHINGTON (CN) – A pair of Chicago-area companies have the right to sue their competitors under federal racketeering law for allegedly gaining more than their fair share of tax liens, the U.S. Supreme Court ruled.




     BCS Services Inc. and Phoenix Bond & Indemnity Co. sued their competitors under the Racketeer Influenced and Corrupt Organizations Act, claiming they committed mail fraud when they sent notices to delinquent taxpayers.
     At issue were the competitors’ statements that they were independent organizations bidding for the tax liens, when there were instances of relatives bidding for the same properties, the plaintiffs claimed.
     The district court had ruled that BCS and Phoenix did not have standing because the taxpayers did not receive the notices in the mail. Justice Thomas, writing for the unanimous court, upheld the 7th Circuit’s reversal of that decision, which ruled that BCS and Phoenix had standing because they were injured by the defendants’ actions.
     The competitors had argued that BCS and Phoenix did not rely on the competitors’ statements of independence because they were made to the county, not to BCS and Phoenix.

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