SOURCE: Diaz, Reus & Targ, LLP

Diaz, Reus & Targ, LLP

August 27, 2010 14:47 ET

Diaz, Reus & Targ, LLP: Federal Court's Decision Limits RICO's Reach Outside U.S.

(United States District Court Southern District of New York - Case 09-CV-9716)

NEW YORK, NY--(Marketwire - August 27, 2010) -  Yesterday, a federal court in New York dismissed a RICO lawsuit brought by one of Venezuelan President Hugo Chavez's most vocal critics, Eligio Cedeno. Mr. Cedeno, a fugitive from the Venezuelan justice system who is currently in Miami, Florida, sued various individuals and members of the Venezuelan government, charging that they conspired to arrest him, and extorted him out of millions of dollars. 

Siding with the defense, United States District Judge Jed S. Rakoff stated that notwithstanding Cedeno's claim that he was a victim of the Chavez regime, the RICO statute did not reach the alleged actions complained of by Cedeno. The alleged conspiracy, along with the actions underlying the conspiracy, explained the court, took place in Venezuela.

Citing to recent Supreme Court precedent, the court explained that Congress must clearly specify its intent that U.S. laws reach conduct occurring outside the United States. In the absence of a clear statement to that effect, the court concluded, RICO's reach is limited to the territorial boundaries of the United States. 

Said the court, "If . . . RICO evidences no concern with foreign enterprises, RICO does not apply where, as here, the alleged enterprise and the impact of the predicate activity upon it are entirely foreign."

The court further rejected the notion that RICO would apply simply because the Plaintiffs were able to point to a few isolated financial transactions in the U.S. "[T]he presumption against extraterritoriality," noted the court, "would be a craven watchdog indeed if it retreated to its kennel whenever some domestic activity is involved in the case." 

Michael Diaz, Jr., the Managing Partner of Miami-based Diaz, Reus & Targ, LLP, and lead counsel for one of the defendants, Ruben Idler, agreed with the outcome. "It was a correct ruling on the law and a significant victory for the Venezuelan authorities who have asked the U.S. for the extradition of Cedeno." Diaz added that the court's ruling would "severely impair Cedeno's legal strategy of using a RICO lawsuit as a vehicle to avoid extradition and obtain political asylum in the U.S."

Contact Information

  • Contacts:
    Brian Levitt
    Brian Levitt Communications
    Email Contact

    Michael Diaz Jr., Esq.
    Diaz Reus & Targ, LLP


    Carlos Gonzalez, Esq.
    Diaz Reus & Targ, LLP