Cleary Gottlieb Wins Dismissal of $5.5 Billion RICO Lawsuits

July 24, 2015

Cleary Gottlieb secured the dismissal of civil RICO and related state law claims asserted against BNP Paribas and HSBC PLC in the U.S. District Court for the Southern District of New York.

The plaintiffs brought claims against our clients after unsuccessfully satisfying a $2.9 billion default judgment they won against the Republic of Cuba in a Florida state court in 2011 arising out of claims of state-sponsored terrorist acts committed during the Fidel Castro regime. They alleged that BNP Paribas and HSBC, both of which previously pled guilty to aiding Cuba in processing U.S. dollar-denominated transactions prior to 2010, had formed a RICO enterprise with Cuba for the purpose of evading the plaintiffs’ judgment — which did not exist at the time of the alleged wrongful conduct. Had those banks frozen Cuban funds in accordance with the U.S. sanctions regime, the plaintiffs argued that they would have been able to seize those frozen assets when they eventually did win their judgment. They sought $5.421 billion in damages from BNP Paribas and $90 million from HSBC.

On July 21, 2015, Judge Alvin Hellerstein dismissed the plaintiffs’ claims as a “creative attempt to collect further on default judgments.” Among other matters, he dismissed the RICO claims because the plaintiffs, who did not win their judgment against Cuba until after the conclusion of the defendants’ alleged wrongful conduct, had had a “mere expectancy” interest in Cuban property, an injury not protected by RICO.