Civil RICO Lawsuit Filed Against Former Biotech CEO In Central Florida
According to a recent report from Law Street Media, Hemostemix Inc.—a biotech company focused on blood-derived cell therapies—has filed a civil RICO lawsuit against its former chief executive officer (CEO) Kyle Makofka and several related individuals, including Jed Wood. The plaintiff is seeking a jury trial in the lawsuit filed in the United States District Court for the Middle District of Florida. In this blog post, our West Palm Beach RICO claims attorney discusses the key things to understand about this legal dispute and civil RICO claims.
Allegations: RICO Conspiracy to Steal Intellectual Property
In its civil RICO complaint, Hemostemix Inc. contends that its former CEO Kyle Makofka and an alleged co-conspirator named Jed Wood engaged in a long-term fraud scheme designed to steal intellectual property from the company. The biotech firm argues that Mr. Makofka and Mr. Wood committed civil RICO violations.
The company alleges that the two men had a long-standing personal business relationship. Through this relationship and Mr. Makofka’s position as the company’s CEO, Hemostemix Inc. argues that the two men created an enterprise designed to execute a hostile takeover of the company. Among other things, the plaintiffs allege fraud, self-dealing, theft, and misappropriation of funds.
A RICO Violation Requires an “Enterprise”
Civil RICO cases are notoriously challenging. A significant percentage of civil RICO lawsuits are dismissed relatively early on in the legal claims process based on the plaintiff’s “failure to state a claim upon which relief can be granted.” Proving that a defendant acted in an unprofessional or even unlawful manner is not sufficient to prove a RICO violation. A plaintiff in a state of federal civil RICO lawsuit must also prove certain things, including the existence of an “enterprise.” To satisfy the so-called enterprise element in a civil RICO case, a plaintiff must prove the following three things:
- There was a genuine connected relationship between the defendants;
- The defendants created a formal or informal association with a common purpose; and
- There was sustained operation of the enterprise.
In other words, the plaintiff in a civil RICO lawsuit in Florida must establish that the defendant(s) formed some sort of formal or informal association (enterprise) in order to carry out an intentional fraud scheme. An enterprise can be a formal legal entity, such as a business partnership or a registered corporation. However, that is not required. An informal association could constitute a RICO enterprise if certain conditions are satisfied. The plaintiff has the burden of demonstrating that such an enterprise existed.
Schedule a Confidential Consultation With a Civil RICO Lawyer in Florida
At Pike & Lustig, LLP, our South Florida commercial litigation attorneys have the professional skills and legal knowledge to effectively represent clients in civil RICO cases. We provide representation to both plaintiffs and defendants in civil RICO claims. Call us now for a confidential review of your legal case. We have law offices in West Palm Beach, Wellington and Miami and we represent clients in South Florida.