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Tuesday, October 15, 2019

Del. court recommends keeping AG's racketeering case against Gold Fever alive

Lawsuits

By Tomas Kassahun | Oct 17, 2018


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WILMINGTON, Del. (Legal Newsline) – The Superior Court of the state of Delaware has recommended to deny a motion to dismiss a case over alleged criminal enterprise filed by the state.

Judge Katharine L. Mayer wrote the recommendation on Sept. 27.

According to the report, Delaware resident Shaun S. Reilly sought to dismiss the case after the state filed a lawsuit against Reilly over alleged violation of the Delaware Organized Crime and Racketeering Act.

The report said Delaware seeks forfeiture of assets and civil penalties arising from alleged criminal enterprise operated by Shaun S. Reilly, Kisha Reilly, Gold Fever LLC, Gold Fever Finance LLC and Denise Toy.

“A hearing was held on July 20, 2018, and this is my report and recommendation and order after considering the arguments presented by the parties,” Mayer said.

According to the report, the state first argued that Reilly’s motion to dismiss was filed out of time since it was filed 247 days from the service of the complaint.

“The state argues Reilly has not demonstrated excusable neglect because Reilly 'had access to the available information throughout this litigation and neglected to avail himself of a timely opportunity to file a motion to dismiss,'” Mayer said.

Reilly argued that he never received the discovery from the criminal trial and has needed time to identify what property was seized and may be unaccounted for, according to the ruling.

Mayer agreed with Reilly, saying Reilly demonstrated excusable neglect because he acted within a reasonable timeframe considering the "unique obstacles" involved in the case.

“In light of the moving target set by the state with the filing of three liens over time as well as the fact that a complete list of the seized property is not yet available, I find that Reilly has not had ‘access to the available information’ nor could he have reasonably acted sooner,” Mayer wrote. “The late filing is justified under the circumstances presented.”

Reilly also argued that the state doesn’t have standing, but Mayer said the state has standing and its attorney general has authority to institute proceedings under the RICO Statute and to seek forfeiture of real and personal property to the state.

According to the ruling, Reilly also argued that "the complaint is not well pled because evidence has been overlooked, mistakes have been made and the state has unclean hands because it knowingly withheld evidence stored in an unprotected location for approximately two years."

“If true, these accusations are disturbing, but even granting Mr. Reilly some leeway due to his pro se status, do not rise to the level necessary to justify dismissal,” Mayer said.

Accepting the facts as alleged as true, Mayer said the complaint sufficiently sets forth facts in support of a claim that Reilly engaged in a pattern of racketeering activity under the RICO Statute.

Reilly added that the state has unclean hands because neither the first or second lien "disclosed the actual and true scope of items seized," the ruling states.

“I do not find that the state’s conduct has so offended the integrity of the court that the claims should be denied, regardless of merit,” Mayer wrote. “I decline to dismiss the complaint on this basis.” 

Mayer also ordered to deny the state’s motion to amend the complaint, saying new factual obligations or claims or additional theories of liability shouldn’t be introduced this late in the case.

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