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Employer Loses Effort To Apply RICO Statute To Employee Double-Billing

Published by on July 26, 2010

The U.S. District Court for the Eastern District of Virginia dismissed RICO claims brought by a defense industry consulting company against a former employee.  More after the break. In Whitney, Bradley & Brown, Inc. (“WBB”) v .Christian L. Kammermann, WBB alleged that Kammermann, a former senior manager, started his own consulting firm, CLK Executive Decisions, […]

The U.S. District Court for the Eastern District of Virginia dismissed RICO claims brought by a defense industry consulting company against a former employee.  More after the break.

In Whitney, Bradley & Brown, Inc. (“WBB”) v .Christian L. Kammermann, WBB alleged that Kammermann, a former senior manager, started his own consulting firm, CLK Executive Decisions, LLC (“CLKED”), during the last several years of his employment with WBB.  The Complaint alleged that on fourteen different occasions, Kammermann was reimbursed for expenses from WBB, and billed his CLKED clients for the same expenses, generating an extra $13,387.95 for himself.  WBB also accused Kammermann of submitting inaccurate timesheets.

Kammermann submitted his expenses reports to WBB via Federal Express, and to his clients via email.  WBB claimed that his a double-billing amounted to a RICO violation; the court disagreed.   The fourteen occasions of double-billing, spread over a twelve-month period, was not alleged to be a “continuing” pattern of behavior, as must be shown to demonstrate an open-ended scheme.  Nor could WBB establish a “close ended” RICO scheme, because the number of predicate acts was too slight, was not varied, had only one victim, and was a single scheme, rather than a number of separate schemes.

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