A steel company’s claim that it was harmed by a rival in the steel products trade who opened a competing warehouse with funds gained through tax fraud is enough to satisfy the proximate cause for damages under the Racketeer Influenced and Corrupt Organizations Act, the U.S. Court of Appeals for the Second Circuit ruled yesterday.

A divided circuit panel reinstated the claims of Ideal Steel Supply, which asserted that National Steel Supply opened a competing facility in the Bronx with money it gained by luring customers to its Queens location by not charging sales tax if they paid in cash and then filing fraudulent sales and income tax reports.

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