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District Judge Katherine Polk Failla

 

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Chinese firm Dandong is one of the largest buyers of U.S. soybeans. U.S. citizen Hu was its executive director and general manager. Since 2013 he had been imprisoned in China after convictions arising from the same events underlying Dandong’s RICO action claiming Hu conspired with others to defraud it into paying above-market prices on tons of soybeans, resulting in losses exceeding $10.877 million. Hu allegedly laundered fraud proceeds through New York real estate transactions involving his ex-wife Wang and their daughter Mangan, domiciliaries of New York and Washington state, respectively. The court dismissed the claims against Wang and Mangan. Despite personal jurisdiction over them, the court held Dandong did not state a RICO claim under 18 USC §1962(d) because it did not properly allege that defendants’ conduct caused a domestic injury to its business. Even if Dandong suffered losing its U.S. supplier of soybeans, it felt the effects of that loss only in China, its country of incorporation and principal place of business. Nor was Dandong deprived of its property in the U.S., as it received all of the soybeans for which it contracted with U.S. suppliers.

District Judge Katherine Polk Failla

 

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Chinese firm Dandong is one of the largest buyers of U.S. soybeans. U.S. citizen Hu was its executive director and general manager. Since 2013 he had been imprisoned in China after convictions arising from the same events underlying Dandong’s RICO action claiming Hu conspired with others to defraud it into paying above-market prices on tons of soybeans, resulting in losses exceeding $10.877 million. Hu allegedly laundered fraud proceeds through New York real estate transactions involving his ex-wife Wang and their daughter Mangan, domiciliaries of New York and Washington state, respectively. The court dismissed the claims against Wang and Mangan. Despite personal jurisdiction over them, the court held Dandong did not state a RICO claim under 18 USC §1962(d) because it did not properly allege that defendants’ conduct caused a domestic injury to its business. Even if Dandong suffered losing its U.S. supplier of soybeans, it felt the effects of that loss only in China, its country of incorporation and principal place of business. Nor was Dandong deprived of its property in the U.S., as it received all of the soybeans for which it contracted with U.S. suppliers.