Allington

ORDER

On June 19, 1985, plaintiffs filed a second amended complaint alleging violations of the Racketeering Influenced and Corrupt Organizations (RICO) statute, 18 U.S.C. § 1962 (c) and (d). According to the complaint, the five individual and five corporate defendants formed an “association in fact” through which the defendants carried out a scheme to defraud plaintiffs of approximately $190,000 during the period April 1983 to June 1984. The essence of the scheme was falsely to promise high rates of return on loans that were secured by worthless promissory notes or real estate trust deeds. A number of fraudulently induced loans are alleged: a $30,000 loan in April 1983; a $13,000 loan in May 1983; a $20,000 loan in August 1983; a $10,000 loan in September 1983; and a $100,000 loan in March 1984. As pleaded, the moving defendants’ participation in the scheme was limited to the March 1984 transaction.

For the reasons stated below, I conclude that the complaint fails adequately to plead a RICO violation against Gae Rude (hereinafter “Rude”), Don Rude, and Don Rude Incorporated. However, because the Supreme Court’s clarification of RICO’s requirements in Sedima v. Imrex Co., Inc., —…