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Friday, August 23, 2019

Southern District Court removes two defendants in racketeering, wire fraud suit between brothers

By Dee Thompson | Dec 4, 2017


EAST ST. LOUIS – A motion to dismiss in a business dispute between two brothers has been partially granted in a dispute involving a cash lending business.

On Nov. 16, U.S. District Judge Phil Gilbert dismissed counts against Denise and Evan Bartlett without prejudice for failure to state a claim, terminating them as defendants.

Plaintiff Mark Bartlett alleges that three of the defendants—Jim Bartlett, Anoosh Motamedi and Mark Keenan—engaged in illegal theft of trade secrets by funneling resources away from American and Cash Loans and into the new Quick Cash stores. These resources included customer lists and information, financial data, borrowing and lending protocols, form loan applications, disclosure forms and authorization forms, according to background in court papers.

Mark Bartlett filed suit early in 2017 against his brother James Bartlett, his wife Denise Bartlett, their son Evan Bartlett, and their friends Anoosh Motamedi and Mark Keenan. The suit claims that James Bartlett and the other defendants siphoned cash from the cash lending business plaintiff owned jointly with James Bartlett and put it into a competing loan business. 

According to the court’s memorandum and order filed Nov. 16, the two Bartlett brothers “... jointly own nine cash-lending stores via four business entities. These businesses are spread throughout New Mexico, Florida, Illinois and Wisconsin. Mark manages five of these stores while Jim operates four. The brothers own via two entities the four stores that Jim operates: American Cash Loans, LLC ('American') and B&B investment Group Inc. ('B&B'). B&B does business as Cash Loans Now ('Cash Loans'). Mark claims that the two had an agreement to split profits from all nine stores 50/50, with Mark receiving an extra bonus each year for managing one more store than Jim.” 

However, in his original complaint filed earlier this year, Mark Bartlett claims that his brother revived a defunct business entity (Dellano Inc.) and funneled profits in a complex web of business entities whose sole purpose was to defraud him.

Currently, Mark Bartlett has brought a Racketeer Influenced and Corrupt Organizations Act (RICO) action alleging the theft of trade secrets and wire fraud. 

The brothers have filed other lawsuits against one another, including another RICO action in New Mexico. 

In regard to the trade secrets allegation, “The plaintiff alleges that three of the defendants—Jim Bartlett, Anoosh Motamedi, and Mark Keenan—engaged in illegal theft of trade secrets by funneling resources away from American and Cash Loans and into the new Quick Cash stores. These resources included customer lists and information, financial data, borrowing and lending protocols, form loan applications, TILA disclosure forms, and ACH authorization forms,” according to the order.

The defendants dispute those allegations. According to the order, “The defendants have moved to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. First, the defendants assert that Mark has not properly alleged a 'pattern of racketeering activity:' each defendant must have committed at least two predicate acts and the acts must satisfy the continuity requirement. Second, they argue that courts in the 7th Circuit have routinely dismissed cases like this one for failure to state a claim. Third, the defendants argue that the predicate acts were not a proximate cause of Mark’s injury.” 

The court concluded that not all of the parties should stay in the case. The order notes, “...the complaint alleges that two of the defendants—Denise and Evan Bartlett—only committed the predicate acts of mail and wire fraud. As courts in this circuit have repeatedly explained, a federal RICO claim is not the appropriate mechanism to deal with garden-variety fraud disputes. Accordingly, the counts against Denise and Evan Bartlett must be dismissed.”

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U.S. District Court for the Southern District of Illinois