USCA4 Appeal: 24-1027 Doc: 66 Filed: 02/18/2025 Pg: 1 of 24
UNPUBLISHED
UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
No. 24-1027
FX AVIATION CAPITAL LLC,
Plaintiff – Appellant,
v.
HECTOR GUERRERO; MARK LIKER; ANATOLY GALUNOV; AIRLUX AIRCRAFT INC., f/k/a Stratus Aircraft; LG AVIATION INC.,
Defendants – Appellees,
and
VARGHESE SAMUEL,
Defendant.
Appeal from the United States District Court for the District of South Carolina, at Greenville. Henry M. Herlong, Jr., Senior District Judge. (6:22-cv-01254-HMH)
Submitted: November 26, 2024 Decided: February 18, 2025
Before WILKINSON, GREGORY, and RICHARDSON, Circuit Judges.
Affirmed by unpublished opinion. Judge Gregory wrote the opinion, in which Judge Wilkinson and Judge Richardson joined.
ON BRIEF: William H. Foster, LITTLER MENDELSON, P.C., Greenville, South Carolina, for Appellant. Craig R. Smith, SMITH LAW FIRM, Woodland Hills, California, for Appellees.
Unpublished opinions are not binding precedent in this circuit. USCA4 Appeal: 24-1027 Doc: 66 Filed: 02/18/2025 Pg: 2 of 24
GREGORY, Circuit Judge:
This appeal stems from a long-standing dispute between Plaintiff-Appellant FX
Aviation Capital, LLC (“FX”) and several former business partners——LG Aviation, Inc.,
Mark Liker, Hector Guerrero, Anatoly Galunov, and Stratus Aircraft n/k/a Airlux Aircraft,
Inc. (collectively “Defendants”). FX alleges that, based on Defendants’ misrepresentation
of their assets, it loaned significant sums of money to Defendants for the purpose of
acquiring and refitting airplanes. After Defendants defaulted on the loans, FX gained
control of the planes. But, in an effort to force FX to forgive the loans, Defendants refused
to hand over the planes’ logbooks, significantly decreasing their value.
FX brought a civil Racketeer Influenced and Corrupt Organization Act (“RICO”)
suit against the Defendants alleging that they had: (1) conducted or participated in an
enterprise’s pattern of racketeering activity, in violation of 18 U.S.C. § 1962(c); and (2)
engaged in a conspiracy to do so, in violation of 18 U.S.C. § 1962(d). The district court
granted summary judgment for Defendants on both counts. For the reasons set forth below,
we affirm.
I.
A.
In February 2016, Liker and Guerrero formed LG Aviation, Inc., with the two
serving as co-owners and Liker as CEO. 1 J.A. 214, 385. Prior to the formation of LG,
1 Because we affirm the grant of summary judgment in Defendants’ favor, we recount the facts in the light most favorable to FX. See Goodman v. Diggs, 986 F.3d 493, 497–98 (4th Cir. 2021). 2 USCA4 Appeal: 24-1027 Doc: 66 Filed: 02/18/2025 Pg: 3 of 24
Guerrero also owned Stratus (later renamed Airlux Aircraft). Id. At some later point, Liker
hired Gulanov to manage Stratus. J.A. 215.
From March 2016 through December 2017, FX and LG entered into various loan
agreements relating to four aircrafts: a Boeing 737-400, an Embraer, and two Learjets.
J.A. 215, 224. Under the agreements, FX loaned money to LG to allow LG to purchase
and refurbish the planes. J.A. 7. FX alleges that, on multiple occasions, Liker and LG
repeatedly misrepresented their assets and, rather than use the loans for the purchase and
refurbishment of the aircrafts, the Defendants used the loan proceeds for their personal
benefit and use. Id.; Opening Br. at 13. For example, Liker provided financial documents
to FX stating that his net worth exceeded $20 million. J.A. 14. FX alleges that, at the time
he made these representations, Liker knew that his net worth was less than $20 million.
J.A. 9.
As 2017 continued, LG began missing loan payments. See J.A. 459. But the parties
continued to enter into loan agreements. J.A. 10–12. In support of these additional loans,
in mid-August 2017, Liker emailed FX additional documents and pledged a trust account
he controlled to secure the loans. J.A. 10. In October 2017, another company, Regional
One, expressed interest in purchasing the Embraer aircraft. J.A. 11–12. Due to the poor
condition of the plane, the sale fell through. Id. FX alleges that Liker “absconded” with
Regional One’s deposit. J.A. 13. In December 2017, FX declared a default on all loans.
J.A. 218, 386.
In the words of the district court, on March 22, 2018, “Guerrero—seemingly acting
on LG’s behalf—executed a bill of sale transferring the Boeing to FX.” J.A. 386; see also
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J.A. 318 (Boeing bill of sale). Liker insists that he was unaware that Guerrero made the
sale until July 2018. J.A. 142, 342. In violation of federal law, LG failed to deliver the
Boeing’s logbooks along with it. J.A. 386–87; see 14 C.F.R. § 91.417(b)(1) (requiring
maintenance records to be “transferred with the aircraft at the time the aircraft is sold.”).
An aircraft without its logbooks has a significantly lower market value than it would
with them. As the district court explained, “without the maintenance records, FX asserts
that the [planes] were essentially unmarketable.” J.A. 388; see also J.A. 310 (deposition
of Kimbrell: “we were essentially told [by various aviation experts and lawyers] that the
value of the plane was scrap without the records”).
Still believing that LG owned the aircraft, Liker purported to hire a man named
Varghese Samuel to conduct a comprehensive maintenance check of the Boeing plane,
which required a review of the plane’s logbooks. J.A. 388. FX alleges that Liker and
Samuel worked in concert to conceal the logbooks and that Liker and Galunov demanded
that FX forgive the loans before handing over the logbooks. Opening Br. at 9; see J.A.
433–34, 454. In essence, FX alleges that Liker and Gulanov held the Boeing’s “flight and
maintenance records for ransom.” Opening Br. at 9. Citing the Bill of Sale, the legitimacy
of which FX does not appear to question, Defendants state that FX sold the Boeing to CF
Aviation Trust, LLC on June 25, 2018. J.A. 347.
On July 6, 2018, Liker and Joshua Kimbrell, FX’s Chief Operating Officer, engaged
in an exchange of emails regarding logbooks for the Embraer aircraft. Liker wrote:
With regard to a potential buyer [for the Embraer], please provide me with his contact information and I will call him early in the morning. Given the
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change in tone reflected in the default notice email, I would like to discuss his intentions and may send the logbooks if satisfactory.
J.A. 340.
On the same day, Guerrero signed over ownership of the Embraer from LG to FX.
J.A. 319. And, on July 19, Guerrero signed over both Learjets to FX. J.A. 320–21.
On July 30, 2018, Liker sent Kimbrell another email. In that email, he expressed
surprise that FX had purchased the four airplanes. J.A. 342. Liker stated:
There was no communication with you with regard to and I had no knowledge of these transactions. The bills of sale were signed by Hector [Guerrero] who was not involved in our planning discussions, has not been making any payments on the aircraft loans and who abandoned the operations and left the country about 3 months ago to run for political office in Mexico. If you were honest, why ask Hector and not me to sign the bill of sale?
J.A. 342.
On August 20, 2018, Liker sent Kimbrell and his attorney the following email:
. . . While we have been discussing the possibility of bringing this matter to an amicable resolution, I received this letter from your attorney threatening me with contempt proceedings unless I produce the logbooks by this coming Tuesday.
As you know from [Samuel] and myself, I don’t have the logbooks in my possession and don’t have control of them. We have both been in discussion with [Samuel] to obtain these . . . .
J.A. 345.
On September 4, 2018, FX claims that Samuel, “acting on behalf and/or direction
of LIKER, sent an electronic text message to [FX], stating that GULANOV was demanding
money from [FX] in exchange for the return of the Boeing 737 aircraft’s flight and
maintenance records.” J.A. 16.
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FX also stated that Liker directed Samuel to falsely claim that he had done $500,000
worth of maintenance on the planes. Opening Br. at 13; J.A. 437–38. On December 26,
2018, FX sold the Embraer to Exodus Aircraft. J.A. 348.
In total, after having repossessed the four planes, FX sold the planes at considerable
losses. Because FX did not have the logbooks, it was forced to sell the Boeing for
$400,000—a loss of approximately $1,550,000. J.A. 15–16. FX suffered a loss of
$530,000 and $365,000 on the two Learjets. J.A. 14–15.
B.
In April 2022, FX sued Galunov, Guerrero, LG, Liker, Samuel, and Stratus Aircraft,
alleging civil RICO violations under 18 U.S.C. §§ 1962(c) and (d). J.A. 389.
FX sought, and received, an entry of default as to Guerrero. Request for Entry of
Default Against Guerrero, FX Aviation Capital LLC v. Guerrero et al., 6:22-cv-01254
(D.S.C.), ECF No. 16; 2 Entry of Default as to Galunov, Guerrero, Stratus Aircraft n/k/a
Airlux, ECF No. 19. FX then filed an Amended Complaint, naming Galunov, Guerrero,
LG Aviation, Liker, and Stratus. Amended Complaint, ECF No. 30. The district court
reissued summons to Guerrero. Summons Reissued as to Guerrero, ECF No. 32.
In October 2022, Galunov, LG Aviation, Liker, and Stratus moved to dismiss or,
alternatively, for summary judgment, arguing that FX’s claims were time-barred. J.A. 389.
Applying the “separate accrual rule,” the district court denied the motion, explaining that
“FX claims are not time-barred in their entirety.” J.A. 389; see also J.A. 87–98. The
All ECF citations are to the district court record. See FX Aviation Capital LLC v. 2
Guerrero et al., 6:22-cv-01254 (D.S.C.). 6 USCA4 Appeal: 24-1027 Doc: 66 Filed: 02/18/2025 Pg: 7 of 24
district court held that because FX was “on notice that it had suffered concrete financial
losses stemming from Defendants’ default before April 19, 2018 [the furthest back the
statute of limitations stretched],” “FX cannot recover under RICO any damages, including
any unpaid loan balances, caused by Defendants’ pre-April 19, 2018 predicate acts.” J.A.
94. However, it also held that “[t]he existence of time-barred predicate acts does not
prevent FX from recovering for new injuries caused by non-time barred predicate acts
occurring within the limitations period.” J.A. 96. Because FX alleged potential acts of
wire fraud that were not time-barred (Liker’s July 3, July 30, and August 20, 2018 emails
and Samuel’s September 4, 2018 text message), the district court denied Defendants’
motion to dismiss. J.A. 96–98. Neither party is appealing that order.
In October 2023, Galunov, LG, Liker, and Stratus filed a motion for summary
judgment as to all claims. J.A. 180. After the summary judgment motion was fully briefed,
the district court ordered FX “to provide the court [by December 5, 2023] with proof of
proper service in this case as to defendant Hector Guerrero or the case against this
defendant will be dismissed for lack of prosecution.” Text Order, ECF No. 144. On
December 5, in accordance with the court’s order, FX filed a waiver of service as to
Guerrero. Waiver of Service, ECF No. 148.
The following day, the court granted Galunov, LG, Liker, and Stratus’s motion for
summary judgment. J.A. 385. In the grant of summary judgment, the district court held
that summary judgment was appropriate because FX failed to demonstrate that the scheme
constituted a “pattern of racketeering activities”—one of the elements of a RICO cause of
action. J.A. 391.
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The district court then directed the clerk to enter judgment in the case, stating “[t]he
issue of whether Defendant Hector Guerrero has been properly served or whether an
answer is required in this case is moot in light of the court’s December 6, 2023 order
granting summary judgment in this case.” Text Order, ECF No. 153. Per the court’s
direction, the clerk granted summary judgment as to Liker, Galunov, Stratus, and LG
Aviation. Judgment, ECF No. 154.
FX Aviation then filed a notice of appeal. J.A. 397. Also pending before us are
Appellees’ Request for Judicial Notice (Dkt. 34) and Appellant’s Consent Motion to
Supplement Record on Appeal (Dkt. 58).
II.
Before we consider the merits of an appeal, we have an independent “obligation to
verify the existence of appellate jurisdiction.” Palmer v. City Nat’l Bank, of W. Va., 498
F.3d 236, 240 (4th Cir. 2007). This Court has “jurisdiction of appeals from all final
decisions of the district courts of the United States.” 28 U.S.C. § 1291 (emphasis added).
We hold that the district court’s grant of summary judgment constitutes a final decision
and, therefore, this Court may exercise jurisdiction.
“In the ordinary course a ‘final decision’ is one that ends the litigation on the merits
and leaves nothing for the court to do but execute the judgment.” Calderon v. GEICO Gen.
Ins. Co., 754 F.3d 201, 204 (4th Cir. 2014) (cleaned up). “In making . . . [the finality]
assessment, we look to substance, not form.” Porter v. Zook, 803 F.3d 694, 696 (4th Cir.
2015). So, “[r]egardless of the label given a district court decision, if it appears from the
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record that the district court has not adjudicated all of the issues in a case, then there is no
final order.” Id.
“Ordinarily, a district court order is not ‘final’ until it has resolved all claims as to
all parties.” Fox v. Balt. City Police Dep’t, 201 F.3d 526, 530 (4th Cir. 2000); see also
Britt v. DeJoy, 45 F.4th 790, 793 (4th Cir. 2022). For example, this Court determined that
a district court’s dismissal of the plaintiff’s complaint was not a “final decision” when the
district court failed to rule on one of the plaintiff’s claims. Porter, 803 F.3d at 696–97.
For this reason, only complete (and not partial) grants of summary judgment constitute
final orders. Calderon, 754 F.3d at 203.
In Hixson v. Moran, this Court distinguished Porter and found that it did possess
jurisdiction. See generally 1 F.4th 297 (4th Cir. 2021). There, the plaintiff, a prisoner,
brought two claims for deliberate indifference, one based on the denial of insulin and one
on the denial of other medication. Id. at 301. On appeal, the plaintiff argued that the district
court only ruled on his noninsulin claim and, therefore, there was no final order. Id. The
Court disagreed, explaining that the district court “addressed the ‘central component’ of
[the plaintiff’s] deliberate indifference claims.” Id. (quoting Porter, 803 F.3d at 699). The
Court noted that the district court “order display[ed] an awareness of the second claim”
and used “language encompassing [the doctor’s] consideration of medication in addition
to insulin.” Id.
We find that this case presents a situation closer to Hixson then Porter. At first
blush, that does not seem so: Here, the district court’s judgment, by its terms, only applies
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to Liker, Galunov, Stratus, and LG. Judgment, ECF No. 154. And the motion which the
district court granted was only for those four defendants—and not Guerrero. J.A. 180.
But, while the district court’s order failed to mention Guerrero, the record as a whole
demonstrates the district court’s awareness of the claims against Guerrero and its intention
to dismiss the case in its entirety, including as to Guerrero. The district court’s opinion
granting summary judgment states that FX’s two RICO claims failed as a matter of law
because FX could not establish that Defendants had engaged in a “pattern of racketeering
activity.” J.A. 391. This element of the RICO analysis hinges on the nature and duration
of the scheme as a whole, not the individual actions of each member. Therefore, as the
parties agree, the inclusion of Guerrero would not alter the analysis of whether the scheme
satisfied this requirement. FX Supplemental Br. at 3–5 (Dkt. 60); Defendants
Supplemental Br. at 2–3 (Dkt. 61). The district court’s summary judgment order thus
addressed the “central component” of the claims against Guerrero, indicating that it is a
final decision. Hixson, 1 F.4th at 301.
Furthermore, after granting summary judgment, the district court held that any
further proceedings pursuant to Guerrero were moot, indicating the district court’s belief
that its summary judgment order had dealt with the case in its entirety. Text Order, ECF
No. 153. The district court then directed the clerk to enter judgment “in this case,” not
only as to the parties listed in the motion for summary judgment or in the summary
judgment order. Text Order, ECF No. 153. As in Hixson, this shows the district court’s
“awareness” of FX’s claims against Guerrero and its belief that it had resolved all claims
as against all parties, including through a mootness ruling. 1 F.4th at 301.
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While the district court should have been clearer, taken together with the summary
judgment opinion and the district court’s subsequent orders, the grant of summary
judgment was a final order for purposes of § 1291. In light of the entire record, we hold
that we possess jurisdiction.
III.
Having satisfied ourselves that we have jurisdiction, we turn to the merits of the
case. “We review the district court’s grant of summary judgment de novo, ‘using the same
standard applied by the district court.’” Goodman, 986 F.3d at 497 (quoting Brooks v.
Johnson, 924 F.3d 104, 111 (4th Cir. 2019)). “[A] court should grant summary judgment
only if, taking the facts in the best light for the nonmoving party no material facts are
disputed and the moving party is entitled to judgment as a matter of law.” Id. at 497–98.
IV.
FX brought two claims against all Defendants: one count of a civil violation of the
Racketeer Influenced and Corrupt Organizations Act (“RICO”), see 18 U.S.C. § 1962(c),
and one count of RICO conspiracy, see 18 U.S.C. § 1962(d). J.A. 19, 26.
Finding that FX failed to demonstrate that the Defendants had engaged in a “pattern
of racketeering activities,” one of the elements for a RICO cause of action, the district court
granted summary judgment on Count I. J.A. 395. And, because it granted summary
judgment on Count I, the district court concluded that the conspiracy count, Count II,
“necessarily fails” and granted summary judgment on that as well. Id.
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On appeal, FX objects to this holding, arguing that there is a genuine dispute of
material fact that the Defendants engaged in a pattern of racketeering activity. In contrast,
Defendants defend the district court’s holding and, in addition, argue that: FX lacks
constitutional standing; FX is not a proper party to bring a RICO claim; and FX failed to
establish that Defendants committed a predicate offense. 3
We first find that FX has constitutional standing. As for FX’s RICO claim under
18 U.S.C. § 1962(c), we affirm the district court’s finding that there is no genuine dispute
as to whether Defendants engaged in a pattern of racketeering activity, such that FX’s claim
fails. We decline to consider whether FX is a proper party to bring suit and whether
Defendants committed a predicate offense. Because Defendants did not conspire to engage
in a pattern of racketeering activity, summary judgment must be granted as to FX’s
§ 1962(d) claim. We therefore affirm the district court’s grant of summary judgment on
both counts.
We first consider whether FX has constitutional standing to bring its claims.
“Article III of the Constitution requires a litigant to possess standing to sue in order for a
3 Defendants also challenge the district court’s reliance on two pieces of evidence: the Verified Complaint and Eliezer Appel’s deposition. Response Br. at 30–33. But, Defendants failed to raise these objections below and have therefore waived them. See Bell v. Brockett, 922 F.3d 502, 513 (4th Cir. 2019) (“Appellants may not raise arguments on appeal that were not first presented below to the district court.”). We will treat the Verified Complaint as the equivalent of an affidavit for purposes of summary judgment and will also consider Appel’s deposition testimony. See Goodman, 986 F.3d at 498 (“a verified complaint is the equivalent of an opposing affidavit for summary judgment purposes, when the allegations contained therein are based on personal knowledge.”) (cleaned up). 12 USCA4 Appeal: 24-1027 Doc: 66 Filed: 02/18/2025 Pg: 13 of 24
lawsuit to proceed in federal court.” Ali v. Hogan, 26 F.4th 587, 595 (4th Cir. 2022). The
United States Supreme Court outlined the “irreducible constitutional minimum”
requirements for Article III standing: “(1) an injury in fact; (2) a causal connection between
the injury and the conduct complained of, such that the injury is fairly traceable to the
defendant’s actions; and (3) a likelihood that the injury will be redressed by a favorable
decision.” Id. at 595–96 (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992)).
For an injury to satisfy Article III’s requirements, it “must be concrete, particularized, and
not conjectural or hypothetical.” Pye v. United States, 269 F.3d 459, 467 (4th Cir. 2001).
Defendants argue that FX has failed to satisfy the first element: injury-in-fact.
Response Br. at 36–37. Defendants argue that because FX had already transferred title of
the Boeing to an affiliate before it requested the logbooks, it lacks standing for any alleged
financial losses stemming from being forced to sell the plane without the logbooks.
Response Br. at 36; see J.A. 347 (FX selling the Boeing to CF Aviation Trust, LLC on June
25, 2018). 4 Pointing to the losses it suffered as a result of Defendants’ alleged scheme, FX
protests that it has satisfied the injury-in-fact requirement.
We hold that FX has alleged financial harm, which constitutes an injury-in-fact. As
this Court has explained, “financial harm is a classic and paradigmatic form of injury in
fact.” Air Evac EMS, Inc. v. Cheatham, 910 F.3d 751, 760 (4th Cir. 2018) (citation
4 Defendants also argue that, in repossessing the Embraer, FX violated numerous provisions of the South Carolina Commercial Code. Response Br. at 42–43. The district court made no findings on this matter and, if Defendants wanted to challenge the repossession, they could have brought a counterclaim or suit under South Carolina law. For purposes of the standing inquiry, the Court declines to consider this argument. 13 USCA4 Appeal: 24-1027 Doc: 66 Filed: 02/18/2025 Pg: 14 of 24
omitted). This includes a reduction in property value, even if the plaintiff does not
imminently intend to sell the property in question. See Pye, 269 F.3d at 468 (decreased
property values constitutes an injury-in-fact). Here, FX alleged that because Defendants
withheld the Boeing and Embraer’s logbooks, the planes were worth significantly less
money without the logbooks, such that it suffered a diminution in property value. J.A. 388
(“without the maintenance records, FX asserts that the Embraer and Boeing were
essentially unmarketable.”); J.A. 310 (deposition of Kimbrell: “we were essentially told
[by various aviation experts and lawyers] the value of the plane was scrap without the
records”); see also United States v. Sturm, 870 F.2d 769, 770 (1st Cir. 1989) (“A plan[e]
without logbooks ordinarily can be used only for noncommercial purposes, and thus has a
lower value.”). Additionally, FX alleged that because Defendants did not use the loans to
maintain and convert the planes, it was forced to sell the planes at a significant loss, J.A.
14–16 (describing selling the four planes for a total loss of $2,445,000), which is also a
cognizable financial injury. 5
Reading the record in the light most favorable to FX—the nonmoving party—FX
has sufficiently demonstrated all three standing requirements.
5 It is true that there is some uncertainty regarding how and why FX transferred ownership of the two planes. While this is unaddressed by FX and the district court, the record provides clarification. In his deposition, Kimbrell describes both transfers as “internal transfers” for the purpose of easing certification with various regulatory bodies. J.A. 311–15. The Bills of Sale support this understanding. J.A. 347 (CF Aviation Trust paying $1 for the Boeing); J.A. 348 (Exodus Aircraft paying $10 for the Embraer). If remanded, the fact finder may need to make additional inquiry and findings into the nature of these transfers and the relationships between the various entities. But, for purposes of summary judgment, FX’s allegations are sufficient. 14 USCA4 Appeal: 24-1027 Doc: 66 Filed: 02/18/2025 Pg: 15 of 24
Next, we turn to whether summary judgment was appropriate on FX’s § 1962(c)
claim. For the reasons set forth below, we hold that there is no genuine dispute of material
fact that Defendants did not engage in a pattern of racketeering activity, and, for this reason,
we affirm the district court’s grant of summary judgment for the Defendants.
Section 1962(c) states: “It shall be unlawful for any person employed by or
associated with any enterprise engaged in, or the activities of which affect, interstate or
foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such
enterprise’s affairs through a pattern of racketeering activity . . . .” 18 U.S.C. § 1962(c)
(emphasis added). “The Supreme Court has explained that a civil RICO claim has four
essential elements: (1) conduct; (2) of an enterprise; (3) through a pattern; (4) of
racketeering activity.” Whitney, Bradley & Brown, Inc. v. Kammermann, 436 F. App’x
257, 258 (4th Cir. 2011) (unpublished) (citing Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S.
479, 496 (1985)).
For purposes of this appeal, we assume (without deciding) that FX has satisfied its
burden as to three of the four elements. We assume that there is a genuine dispute of
material fact that Defendants together constituted an enterprise. We also assume that there
is a genuine dispute of material fact that Defendants committed racketeering activity,
namely by engaging in wire fraud and extortion. 18 U.S.C. § 1961(1)(B) (defining
racketeering activity). For wire fraud, we assume that there is a genuine dispute of material
fact that Defendants engaged in a scheme to defraud FX by withholding the logbooks and
submitting invoices for work that was never performed, and that Defendants used wire
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communications as part of that scheme. See 18 U.S.C. § 1343; see also ePlus Tech., Inc.
v. Aboud, 313 F.3d 166, 181 (4th Cir. 2002) (to prove wire fraud, a plaintiff must “show
(1) a scheme to defraud and (2) use of a . . . wire communication in furtherance of that
scheme.”). In addition, we assume that there is a genuine dispute of material fact that
Defendants engaged in extortion by withholding the logbooks. See 18 U.S.C. § 1951(b)(2);
see also Sturm, 870 F.2d at 773 (holding that a debtor committed extortion by withholding
a plane’s logbooks when the lender repossessed the plane). Our discussion here only
pertains to the third element—whether Defendants have engaged in a pattern of
racketeering activity.
“[T]here is no mechanical formula to assess whether the pattern requirement has
been satisfied; it is a commonsensical, fact-specific inquiry.” ePlus Tech., Inc., 313 F.3d
at 182. A “‘pattern of racketeering activity’ requires at least two acts of racketeering
activity, . . . the last of which occurred within ten years . . . after the commission of a prior
act of racketeering activity.” 18 U.S.C. § 1961(5). And as the Supreme Court has observed,
“while two acts are necessary, they may not be sufficient” to establish a “pattern of
racketeering activity;” in fact, “two isolated acts of racketeering activity do not constitute
a pattern.” Sedima, 473 U.S. at 496 n.14. Rather, a pattern only exists if there is “continuity
plus relationship.” Id. (quoting S. Rep. No. 91–617, p. 158 (1969)) (emphasis in original);
H.J. Inc. v. N.W. Bell Tel. Co., 492 U.S. 229, 239 (1989) (“[T]o prove a pattern of
racketeering activity a plaintiff or prosecutor must show that the racketeering predicates
are related, and that they amount to or pose a threat of continued criminal activity.”); see
also US Airline Pilots Ass’n v. Awappa, LLC, 615 F.3d 312, 318 (4th Cir. 2010). “These
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requirements are designed to prevent RICO’s harsh sanctions, such as treble damages, from
being applied to garden-variety fraud schemes.” ePlus Tech., 313 F.3d at 181. “We have
reserved RICO liability for ongoing unlawful activities whose scope and persistence pose
a special threat to social well-being.” Al-Abood ex rel. Al-Abood v. El-Shamari, 217 F.3d
225, 238 (4th Cir. 2000) (cleaned up).
Here, the parties agree that the alleged predicate acts are related, but they dispute
whether the continuity element is satisfied. The Supreme Court has recognized two types
of continuity: closed-ended and open-ended. US Airline Pilots Ass’n, 615 F.3d at 318
(discussing H.J. Inc., 492 U.S. at 241–42). As we have explained, “[c]ontinuity refers
‘either to a closed period of repeated conduct, or to past conduct that by its nature projects
into the future with a threat of repetition.’” GE Inv. Priv. Placement Partners II v. Parker,
247 F.3d 543, 549 (4th Cir. 2001) (quoting H.J. Inc., 492 U.S. at 241). And as we set forth
in Brandenburg v. Siedel,
[f]actors relevant to th[e] inquiry [regarding the existence of a RICO pattern] include the number and variety of predicate acts and the length of time over which they were committed, the number of putative victims, the presence of separate schemes, and the potential for multiple distinct injuries . . . . These factors are not exclusive, and no one of them is necessarily determinative.
859 F.2d 1179, 1185 (4th Cir. 1988), abrogated on other grounds by Quackenbush v.
Allstate Ins. Co., 517 U.S. 706 (1996). FX argues that both closed-ended and open-ended
continuity are satisfied here. We disagree, holding that neither are met.
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1.
A party can demonstrate closed-ended continuity “by proving a series of related
predicates extending over a substantial period of time.” H.J. Inc., 492 U.S. at 242. It is
undisputed that FX has failed to do so.
Here, the Defendants engaged in a years-long scheme, stretching from 2016 to at
least 2022 (when FX filed its complaint). This suggests that the continuity element may
be met. 6 But, while “the length of time over which [the predicate acts] were committed”
is certainly a factor for this court to consider, no factor is “exclusive” nor “necessarily
determinative.” Brandenburg, 859 F.2d at 1185.
Turning to the other Brandenburg factors and our subsequent case law, FX’s claim
falls short. Integral to this analysis is the scope of the scheme, including the intended goal
and the number of victims. See Menasco, Inc. v. Wasserman, 886 F.2d 681, 684 (4th Cir.
1989) (finding no “pattern of racketing activity” when the defendants’ actions “were
narrowly directed towards a single fraudulent goal”); Int’l Data Bank, Ltd. v. Zepkin, 812
F.2d 149, 155 (4th Cir. 1987) (finding no “pattern of racketeering activity” when
defendants only engaged in “a single, limited scheme”); Al-Abood, 217 F.3d at 238
(acknowledging that “[t]here is no per se rule against a RICO claim involving only one
victim,” but finding the factor significant in holding that there was no pattern).
6 Because of RICO’s statute of limitations, the district court found that FX is time barred from collecting damages stemming from predicate acts occurring before April 19, 2018, see J.A. 94, and neither party has challenged this holding on appeal. Nonetheless, for purposes of determining whether there is a “pattern of racketeering activity,” the Court will look to time-barred conduct. This is because the pattern analysis goes to the merits of whether a RICO violation occurred, not to the computation of damages. 18 USCA4 Appeal: 24-1027 Doc: 66 Filed: 02/18/2025 Pg: 19 of 24
Here, the scheme was only focused on one goal (obtaining money from FX) and
only targeted one victim (FX). While FX argues that Defendants’ scheme “actually harmed
multiple victims,” it fails to identify those other victims. Opening Br. at 23; see also Reply
Br. at 6. The closest FX gets to identifying another victim is discussing Regional One, the
company that considered purchasing the Embraer. Opening Br. at 22. But, at best, FX
alleges that the sale fell through, and Defendants held on to Regional One’s original
deposit. J.A. 10–13. But FX’s allegations relating to Regional One are a far cry from
Defendants’ alleged scheme of entering into fraudulent loans with and extorting money
from FX. Indeed, FX’s own characterization of the scheme shows that FX was the only
victim and the scheme’s only goal was to defraud and extort it. See Opening Br. at 13
(Defendants “devised a fraudulent scheme to obtain loans from FX” and “attempted to
extort money from FX by concealing the essential logbooks and maintenance records for
the aircraft”).
Additionally, the type of alleged predicate acts at issue cuts against a finding of a
RICO pattern. Wire fraud constitutes most of the scheme’s alleged predicate acts, and the
extortion took place via email and text message. Because in the modern era almost all
frauds include some form of mail or wire fraud, this Court is “cautious about basing a RICO
claim on predicate acts of mail and wire fraud.” Al-Abood, 217 F.3d at 238 (4th Cir. 2000);
see also GE Inv., 247 F.3d at 549. This is particularly so when wire fraud is only conducted
in one way, rather than in an “extensive or varied manner.” Whitney, Bradley & Brown,
436 F. App’x at 263 (contrasting a case where the defendant only used mail and wire
transfers in one way to one where the defendants’ acts “encompassed a variety of
19 USCA4 Appeal: 24-1027 Doc: 66 Filed: 02/18/2025 Pg: 20 of 24
techniques to deplete corporate assets”) (cleaned up). That is the case here. Defendants
only used wire fraud to communicate directly with FX and its officers. The use of wire
communications here does not raise this case beyond routine fraud, further reinforcing
FX’s failure to demonstrate that Defendants engaged in a pattern of racketeering. See e.g.,
Flip Mortg. Corp. v. McElhone, 841 F.2d 531, 538 (4th Cir. 1988) (declining to apply
RICO when “the scheme in the present case does not rise above the routine”).
Just as in Al-Abood, “the narrow focus of the scheme . . . combined with the
commonplace predicate acts” precludes a finding of closed-ended continuity, and therefore
of a RICO pattern on this basis. 217 F.3d at 238–39.
2.
FX also alleges that Defendants’ scheme constitutes “open-ended continuity.” “To
allege open-ended continuity, a plaintiff must plead facts that demonstrate a ‘threat of
continuity,’ i.e., facts that give rise to a reasonable expectation that the racketeering activity
will ‘extend[ ] indefinitely into the future.’” US Airline Pilots Ass’n, 615 F.3d at 318
(quoting H.J., 492 U.S. at 242). Again, it is undisputed that FX has failed to meet its
burden.
Even if the racketeering activity extends over a significant period of time, “[a]
plaintiff cannot demonstrate open-ended continuity if the racketeering activity has a ‘built-
in ending point, and the case does not present the necessary threat of long-term, continued
criminal activity.’” US Airline Pilots Ass’n, 615 F.3d at 318–19 (4th Cir. 2010) (quoting
GE Inv., 247 F.3d at 549). “[T]he threat of continuity may be established by showing that
20 USCA4 Appeal: 24-1027 Doc: 66 Filed: 02/18/2025 Pg: 21 of 24
the predicate acts or offenses are part of an ongoing entity’s regular way of doing business.”
H.J., 492 U.S. at 242.
In GE Investment, this Court found that open-ended continuity was not satisfied in
a general scheme to defraud investors. 247 F.3d at 549. As we explained, “Defendants’
conduct was all designed for the single goal of allowing Defendants to profit from their
interests in [a single corporation]” and “the very nature of the lender fraud was such that
Defendants could not continue the fraud beyond a limited period of time.” Id. at 549–50.
The same is true here. Allegedly, Defendants had one goal: to defraud FX. And, like with
other schemes to defraud investors, such as in GE Investment, there is no reasonable
expectation that the scheme will proceed indefinitely. FX, the sole victim, has identified
the scheme and may now take steps to protect itself, including through the prosecution of
state tort law remedies.
* **
To be clear, FX’s allegations are serious. However, “this circuit will not lightly
permit ordinary business contract or fraud disputes to be transformed into federal RICO
claims.” Flip Mortg. Corp., 841 F.2d at 538. This case simply does not present the type
of “ongoing unlawful activity whose scope and persistence pose a special threat to social
well-being” warranting RICO intervention. Anderson v. Found. for Advancement, Educ.
& Emp. of Am. Indians, 155 F.3d 500, 506 (4th Cir. 1998) (citation omitted).
Since there is no genuine dispute of material fact that Defendants did not engage in
a pattern of racketeering activity, FX’s § 1962(c) claim must fail. And, because Defendants
have not satisfied the pattern element, it is not necessary for us to consider whether FX is
21 USCA4 Appeal: 24-1027 Doc: 66 Filed: 02/18/2025 Pg: 22 of 24
a proper party to bring suit and whether Defendants committed a RICO predicate offense.
We therefore affirm the district court’s grant of summary judgment to the Defendants.
C.
We also hold that the district court properly granted summary judgment for the
Defendants on FX’s RICO conspiracy claim.
RICO’s conspiracy provision states: “It shall be unlawful for any person to conspire
to violate any of the provisions of subsection . . . (c) of this section.” 18 U.S.C. § 1962(d).
RICO’s conspiracy is more comprehensive than the general federal conspiracy provision
and does not require that each defendant perform “some overt act or specific act” in
furtherance of the conspiracy. Salinas v. United States, 522 U.S. 52, 63 (1997). In this
way, “a plaintiff could . . . sue co-conspirators who might not themselves have violated one
of the substantive provisions of § 1962.” Beck v. Prupis, 529 U.S. 494, 506–07 (2000).
To satisfy a RICO conspiracy, “a conspirator must intend to further an endeavor which, if
completed, would satisfy all of the elements of a substantive criminal offense.” Salinas,
522 U.S. at 53. 7
Here, as explained above, Defendants have not engaged in a pattern of racketeering
activity that would satisfy the substantive RICO claim under § 1962(c). Moreover, FX has
presented no evidence that Defendants intended for any scheme to extend any further than
7 While Salinas concerned criminal RICO, the same elements apply in the civil context. See Baisch v. Gallina, 346 F.3d 366, 376–77 (2d Cir. 2003) (applying Salinas in the civil context); Smith v. Berg, 247 F.3d 532, 538–39 (3d Cir. 2001) (same); Empress Casino Joliet Corp. v. Balmoral Racing Club, Inc., 831 F.3d 815, 822–23 (7th Cir. 2016) (same); RSM Prod. Corp. v. Freshfields Bruckhaus Deringer U.S. LLP, 682 F.3d 1043, 1048 (D.C. Cir. 2012) (same). 22 USCA4 Appeal: 24-1027 Doc: 66 Filed: 02/18/2025 Pg: 23 of 24
it did so as to, if completed, satisfy all the elements of a substantive RICO offense. See
Salinas, 522 U.S. at 65. We therefore affirm the district court’s grant of summary judgment
to the Defendants.
Turning to the two motions pending before us, we deny Appellees’ Request for
Judicial Notice (Dkt. 34) and grant Appellant’s Consent Motion to Supplement Record on
Appeal (Dkt. 58).
As for the first motion, Appellees-Defendants request that this Court take judicial
notice of six documents, largely filings or transcriptions from separate but apparently
related proceedings. Defendants motion is devoid of any reasoning explaining why the
documents are relevant or what facts they contain that are “not subject to reasonable
dispute.” Fed. R. Evid. 201(b). Indeed, several of the documents are briefs filed by the
Defendants in other cases. And, as all these briefs were filed and the proceedings
transcribed occurred prior to the Notice of Appeal in this case, it is not clear why these
were not included in the record below and in the Joint Appendix. We deny this motion.
As for the second motion, the parties jointly seek to supplement the record with the
district court’s December 7, 2023, order stating that any question relating to Guerrero’s
service or need to file an answer was moot in light of the district court’s grant of summary
judgment. As this is part of the district court’s record below and relates to the question of
this Court’s jurisdiction, the motion is granted.
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VI.
We hold that FX has Article III standing to bring it claims. But FX failed to
demonstrate a genuine dispute of material fact that Defendants engaged in a pattern of
racketeering activity, dooming its § 1962(c) claim. And, because FX has failed to allege
that Defendants conspired to engage in a pattern of racketeering activity, FX’s § 1962(d)
claims fail as well. For the foregoing reasons, we affirm the district court’s grant of
summary judgment to Defendants on both counts. We deny Appellees’ Request for
Judicial Notice (Dkt. 34) and grant Appellant’s Consent Motion to Supplement Record on
AFFIRMED