RICO Claim Dismissed

Posted: February 25, 2026 / Written by: Joshua Wurtzel, Channing J. Turner, Thomas A. Kissane, Samuel L. Butt / Categories Commercial, Motion to Dismiss

RICO Claim Dismissed

On January 5, 2026, in Bank of India, N.Y. Branch v. Anaya Gems, Inc., Index No. 655240/2018, Justice Andrea Masley dismissed plaintiffs’ RICO claims. The Court explained:

Plaintiffs’ RICO claim is based on certain allegations of fraud – the customs fraud (NYSCEF 590, SAC ¶¶ 16-27 [redline copy]) and the fraud to divest Anaya Gems of its assets (id. ¶¶ 28-54, 132-226, 322-332). However, these are separate instances and there are no allegations connecting the actors such as to satisfy the requirement that plaintiffs plead an enterprise.

As for the customs fraud, plaintiffs merely expanded on how the customs fraud was conducted based on certain admissions made in connection with a settlement with the federal government. Even with additional details about how that scheme was conducted, plaintiffs still fail to sufficiently plead an association-in-fact between the actors outside and beyond that one fraud scheme. There are no allegations of an association-in-fact beyond the fraudulent conduct itself evidencing “a purpose, relationships among those associated with the enterprise, and longevity sufficient to permit these associates to pursue the enterprise's purpose.” (Boyle v United States, 556 US at 946.)

As for the new allegations of fraud by SDC Designs and other actors, specifically paragraphs 146, 150-151, 162 in the SAC, again, these allegations fail to sufficiently plead that there was an association-in-fact between defendants that would be separate and apart from the fraudulent scheme itself. The fraud conduct alleged was spearheaded by SDC Designs and its shell company, Diagem; the fraud in our case is allegedly spearheaded by the Gandhi family and for their benefit. SDC Designs is not alleged to be an entity of the Gandhi family (NYSCEF 590, SAC ¶¶ 152 [listing SDC Designs principals], 147, 149, 162, 212.) The allegation that “[t]he principals of SDC Designs, who had operated their companies in a long-standing relationship with the companies of Anshul, Ajay and the Gandhi family” is not enough to show both “interpersonal relationships and a common interest.” (Boyle v United States, 556 US at 946.) The fraud allegedly committed by SDC Designs and other actors appears to be a remote instance of fraud conducted in a manner like the fraud allegedly conducted in this action. (See id. ¶ 162.)

Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning RICO.