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FDIC v. BEALL

September 9, 1987

Federal Deposit Insurance Corporation, Plaintiff
v.
Gilbert Beall, Frederic Mascolo, Jilly Enterprises, Inc., Jilly Rizzo, Anthony DelVecchio and Katherine DelVecchio, Defendants



The opinion of the court was delivered by: NEALON

 WILLIAM J. NEALON, Chief Judge

 The Federal Deposit Insurance Corporation (FDIC) instituted this action on May 4, 1987 in its corporate capacity as successor in interest to the Aurora Bank, Aurora, California. In its Complaint, the FDIC states a claim under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq., against defendants Anthony DelVecchio and Jilly Rizzo. Specifically, the FDIC asserts that DelVecchio and Rizzo participated in a fraudulent scheme which led to the failure of the Aurora Bank in late 1985. The FDIC previously filed a separate civil RICO action against DelVecchio and Rizzo based upon the same facts in the United States District Court for the District of Colorado, and that action is presently pending before the Colorado district court. According to the Complaint, Jilly Enterprises, Inc. is an alter ego of DelVecchio and Rizzo.

 The FDIC also avers in its Complaint that DelVecchio and Rizzo fraudulently transferred one of the fruits of their scheme involving the Aurora Bank, a tract of land in excess of one hundred acres (Echo Lake property) in Monroe County, Pennsylvania, to defendants Gilbert Beall and Frederic Mascolo in violation of Pennsylvania's Uniform Fraudulent Conveyance Act, 39 Pa.C.S.A. § 351 et seq. Beall and Mascolo were originally named as defendants in the Colorado action but were dismissed for lack of personal jurisdiction. In its Complaint, the FDIC seeks various forms of relief directly affecting the Echo Lake property.

 The final defendant, Katherine DelVecchio, is listed as a grantor of the Echo Lake property on one deed in the chain of title from her husband and Rizzo to Beall and Mascolo.

 DISCUSSION

 I.

 The moving defendants argue that this court lacks subject matter jurisdiction. Without citing any supporting authority, they propose that the court lacks jurisdiction over the RICO claim because none of the alleged predicate acts occurred in Pennsylvania. They add that the FDIC's allegations under Pennsylvania's Uniform Fraudulent Conveyance Act constitute a purely state law cause of action over which this court cannot exercise independent jurisdiction.

 The jurisdictional provision for civil RICO actions, 18 U.S.C. § 1964, contains no requirement relating to where the predicate acts occurred. Having been advised by the moving defendants of no statutory or case law precedent for their proposition that a district court lacks jurisdiction over a civil RICO action unless some of the predicate acts occurred in the state where the district court is sitting, this court declines to fashion such a rule. Moreover, even if the RICO claim were dismissed, the court would possess independent jurisdiction over the claim brought under Pennsylvania's Uniform Fraudulent Conveyance Act. Under 12 U.S.C. § 1819, district courts have subject matter jurisdiction over "all suits of a civil nature at common law or in equity to which the Corporation [FDIC] shall be a party," and the FDIC has appeared in this action solely in its corporate capacity. See Federal Deposit Ins. Corp. v. Braemoor Associates, 686 F.2d 550 (7th Cir. 1982), cert. denied, 461 U.S. 927, 77 L. Ed. 2d 297, 103 S. Ct. 2086 (1983) (district court had subject matter jurisdiction over FDIC's suit under Illinois law where FDIC was suing in its corporate capacity); and Federal Deposit Ins. Corp. v. Gates, 594 F. Supp. 36 (D.C. Kan. 1984) (phrase "common law" in 12 U.S.C. § 1819 is not to be interpreted as contrasted with statutory law, and district court had jurisdiction over action instituted by the FDIC in its corporate capacity to collect on a promissory note under the provisions of the Kansas Consumer Credit Code and Uniform Commercial Code). The sole case cited by the moving defendants to support their position that this court lacks independent jurisdiction over the state law claim, Chas. Kurz Co. v. Lombardi, 595 F. Supp. 373 (E.D. Pa. 1984), is inapplicable because the FDIC was not a party in that action. The court, therefore, possesses subject matter jurisdiction over the present dispute.

 II.

 Beall and Mascolo assert in their Motion to Dismiss that the court lacks personal jurisdiction over them. Since they did not pursue this contention in their supporting brief, it will be deemed withdrawn pursuant to Middle District of Pennsylvania Local Rule 401.5.

 III.

 The moving defendants also maintain that venue is improper in this district because none of the alleged activities in the scheme to defraud the Aurora Bank occurred in Pennsylvania. Anthony DelVecchio argues that it would unfair to allow the FDIC to pursue the ...


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