“No one understands RICO.” I reflected on this peculiar comment made by an opposing counsel in my January 2023 Legal Intelligencer column highlighting the U.S. Court of Appeals for the Ninth Circuit’s decision in Smagin v. Yegiazaryan, 37 F.4th 562 (9th Cir. June 10, 2022). The Supreme Court recently issued its opinion in Yegiazaryan v. Smagin, No. 22-381, (June 22, 2023), affirming the Ninth Circuit’s holding and providing RICO (Racketeer Influenced and Corrupt Organization) plaintiffs with a powerful tool against debtors employing fraudulent tactics to avoid payment. This decision not only resolves a circuit split on the application of RICO but also illustrates the expanding comprehension and scope of RICO.


Smagin involved defendant Ashot Yegiazaryan (a Russian citizen at the time) using a series of transactions to defraud plaintiff Vitaly Smagin (also a Russian citizen) out of his investment in a joint real estate venture in Moscow, Russia, between 2003 and 2009. Yegiazaryan was criminally indicted for his fraudulent scheme in 2010. As a result of the indictment and to escape prosecution in Russia, Yegiazaryan fled to the United States, moving to a mansion in Beverly Hills, California.