Court denies motion to dismiss by bank and its affiliated reinsurer in rico suit

This dispute involves class action claims under RICO, claims for unjust enrichment and allegations that Bank of America and its affiliate reinsurer engaged in a conspiracy to defraud home mortgage borrowers into funding sham captive reinsurance arrangements through illegal kickbacks. Specifically, plaintiffs allege that Bank of America referred homeowner borrowers to private mortgage insurance providers in exchange for a kickback of the private mortgage insurance payment to the bank’s affiliated reinsurer, and that in reality, the bank and its reinsurer did not assume any real risk in exchange for the payments, and thus the reinsurance was illusory.  Bank of America moved to dismiss the claims as time-barred, for lack of standing and for failure to state a RICO claim.

A Pennsylvania federal court denied the motion to dismiss on all grounds. However, with respect to the statute of limitations, the court denied the motion to dismiss based on the current record, and gave leave to proceed to limited discovery as to the statute of limitations, injury-discovery and tolling issues.  Weiss, et al. v. Bank of America Corp., et al., No. 15-62 (W.D. Pa. Dec. 22. 2015).

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