Case 1:11-cv-02794-KMW Document 131 Filed 09/18/15 Page 1 of 15

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK
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YULIA TYMOSHENKO, SCOTT SNIZEK,

CHRISTY GREGORY RULLIS, and JOHN
DOES 1 through 50, On Behalf of Themselves
and All Those Similarly Situated,

Plaintiffs, 11-CV-2794 (KMW)

OPINION AND ORDER
-against-

DMYTRO FIRTASH, et al.,

Defendants.
---------------------------------------------------------------X

KIMBA M. WOOD, District Judge:

Plaintiff Yulia Tymoshenko, former Prime Minister of Ukraine, and Plaintiffs Scott

Snizek and Christy Gregory Rullis have filed a Third Amended Complaint (“TAC”) against

Ukrainian businessman Dmytro Firtash, several Ukrainian associates, and a number of U.S.

individuals and corporations alleging that Defendants’ conduct violated the Racketeer Influenced

and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961–1968, as well as state law.

Several U.S. Defendant corporations and citizens have moved to dismiss the TAC with

prejudice pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(6). For the reasons set

forth below, the Court GRANTS the motion to dismiss the TAC and DENIES Plaintiffs leave to

amend their complaint for a fourth time.

I. BACKGROUND

What follows is an abbreviated summary of the history of the case and the factual

background. A more detailed discussion of this background can be found in Tymoshenko v.

Firtash, 57 F. Supp. 3d 311, 314–319 (S.D.N.Y. 2014) (Wood, J.) (“Tymoshenko II”).

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A. Relevant Procedural History

In December 2011, Plaintiff Tymoshenko filed the Amended Complaint (“AC”) in this

action, asserting claims against Dmytro Firtash and his associates under RICO, the Alien Tort

Statute, 28 U.S.C. § 1350, and various state laws. See [Dkt. No. 23]. The AC alleged that Firtash

and his co-Defendants had induced Ukrainian officials to unlawfully prosecute and detain

Tymoshenko and her political allies in retaliation for their political opposition to Firtash’s

interests. See AC ¶¶ 15, 93–94,160–62, 279. In March 2013, the Court dismissed the RICO

claims as impermissibly extraterritorial, based on the prevailing legal framework at the time,

because the enterprise and pattern of racketeering activity described in the AC were

predominantly foreign. See Tymoshenko v. Firtash, No. 11-CV-2794, 2013 WL 1234821

(S.D.N.Y. Mar. 26, 2013) (Wood, J.).

Tymoshenko asserted a revised RICO claim in the Second Amended Complaint (“SAC”)

in November 2013, adding U.S.-based Plaintiffs Scott Snizek and Christy Gregory Rullis, and

alleging that the Defendants’ racketeering enterprise was domestic and therefore fell within

RICO’s territorial scope as then understood. See [Dkt. No 87]. In September of last year, the

Court dismissed the SAC on the grounds that Plaintiffs failed to adequately plead predicate acts

of wire fraud, mail fraud, or money laundering necessary to support a RICO claim. Tymoshenko

II, 57 F. Supp. 3d at 319. However, the Court granted leave for Plaintiffs to amend their

complaint in light of European Community v. RJR Nabisco, Inc., 764 F.3d 149 (2d Cir. 2014),

which was decided after the briefs had been filed and which changed the framework for applying

RICO extraterritorially. 1

1
Because Tymoshenko II was decided based on Plaintiffs’ failure to plead predicate acts, the Court did not reach the
issue of extraterritoriality. 57 F. Supp. 3d at 319.

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Plaintiffs then filed their Third Amended Complaint (“TAC”) in November of last year,

again alleging violations of both RICO and state law. See [Dkt. No. 120]. The TAC asserts

largely the same claims as the SAC, although Plaintiffs have added several new Defendants and

have reframed their allegations regarding the purpose of the alleged racketeering enterprise. See

id. ¶¶ 4, 17–21, 34. In response, U.S. Defendants Paul J. Manafort; Barbara Ann Holdings, LLC;

CMZ Ventures, LLC; The Dynamic Group; Brad S. Zackson; and Vulcan Properties, Inc.

(collectively, “the Moving Defendants”) have filed motions to dismiss the TAC with prejudice. 2

See [Dkt. No 121] (Manafort, et al.); [Dkt. No. 124] (Vulcan).

B. Factual Allegations

What follows is a summary of the factual allegations asserted in the TAC. These

allegations closely parallel those in the SAC. They are accepted as true for purposes of the

Moving Defendants’ motions to dismiss. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

Defendant Dmytro Firtash is the owner of a Ukrainian energy company, RosUkrEnergo

(“RUE”). TAC ¶ 3. From 2004 to 2009, RUE earned millions of dollars by serving as a

“middleman” in natural gas contracts between Naftogaz—a Ukrainian state-owned gas

company—and Gazprom—a Russian gas company that is also partially state-owned. Id. RUE

was able to obtain this lucrative position by virtue of Firtash’s close relationship with Ukrainian

government officials. Id. In December 2007, Plaintiff Yulia Tymoshenko became Ukraine’s

Prime Minister. Id. ¶ 10. Over the following two years, she took steps to exclude RUE from

natural gas transactions between Ukraine and Russia, culminating in her negotiation of new

2
Vulcan filed a separate motion to dismiss “based on the reasons . . . fully set forth” by the other Moving
Defendants, Mot. Dismiss (Vulcan) [Dkt. No. 124] at 1, and which “join[ed], adopt[ed], and incorporate[d] the
arguments” made in the Manafort Defendants’ motion, Mem. of Law in Supp. (Vulcan) [Dkt. No. 125] at 3.
Therefore the Court considers the motions together.

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natural gas contracts with Russia in 2009 that entirely eliminated RUE as an intermediary. See

id. ¶ 112.

In 2010, Viktor Yanukovych—an ally of Firtash—narrowly defeated Tymoshenko to

become President of Ukraine, and Tymoshenko resigned as Prime Minister. Id. ¶ 41. The

Yanukovych administration then began a campaign targeting Tymoshenko and her political allies

with unfounded and malicious prosecutions that resulted in her imprisonment. Id. ¶¶ 4, 43.

Plaintiffs allege that this campaign against Tymoshenko was funded by a U.S.-based

racketeering enterprise (“the Enterprise”) that was orchestrated by Firtash but that included

members of the Yanukovych administration, Ukraine-based individuals and companies

controlled by Firtash, and a number of U.S.-based corporations and U.S. citizens. See id. ¶ 65.

According to Plaintiffs, Firtash and his associates funneled money generated through unlawful

“skimming” of natural gas transactions between the Ukraine and Russia to corporations based in

the U.S., under the guise of legitimate real estate transactions that the Defendants in fact had no

interest in pursuing. See id. ¶ 27. Defendants then funneled this money back to the Ukraine

“through the labyrinth of Firtash . . . companies and bank accounts located in Europe, Cyprus,

Panama, and elsewhere” so as to generate “virtually untraceable funds” that could be used to pay

Ukrainian prosecutors and others within the Yanukovych administration. Id. ¶¶ 4, 10, 15, 22–23,

27, 35.

Plaintiffs also allege that an additional purpose of the Enterprise was to defraud several

groups of U.S. plaintiffs: (1) Plaintiffs Scott Snizek and Christy Gregory Rullis, who are former

employees of U.S. defendant corporations allegedly participating in the Enterprise and were

denied promised wages and other benefits, id. ¶¶ 11, 97, 150; (2) John Doe U.S. Plaintiffs who

were owners or developers of real estate holdings in which the Enterprise feigned serious

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interest, and who lost valuable time and money as a result of this deception, id. ¶¶ 13, 27, 148;

and (3) John Doe U.S. Plaintiffs to whom the Enterprise marketed Ukrainian real estate

opportunities at “grossly inflated” prices, id. ¶¶ 13, 150.

The TAC also incorporates new allegations relating to “recent developments,” none of

which appear to be relevant to either their RICO or state law claims. Specifically, Plaintiffs

allege that an “independent” investigation conducted by Skadden Arps into the prosecution of

Tymoshenko by the Yanukovych administration was in fact “orchestrate[d] and coordinate[d]”

by Defendant Paul Manafort, TAC ¶ 127, and that the Yanukovych administration intentionally

underestimated their payment to Skadden for the investigation in order to avoid application of a

Ukrainian anti-corruption law. Id. ¶ 129. The TAC has also added allegations describing separate

investigations and proceedings taking place in other U.S. jurisdictions that involve either Firtash

or purported associates of other Defendants, but it alleges no connection between the schemes at

issue in those proceedings and the scheme alleged here. See id. ¶¶ 133–36.

II. LEGAL STANDARD

To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead facts sufficient “to

state a claim to relief that is plausible on its face.” Bell Atl. Corp v. Twombly, 550 U.S. 544, 570

(2007). A claim is facially plausible when the supporting factual allegations “allow[] the court to

draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556

U.S. at 678. Where a plaintiff has failed to “nudge” a claim “across the line from conceivable to

plausible,” a district court must dismiss the complaint. Twombly, 550 U.S. at 570.

The Court must accept as true all well-pleaded factual allegations in a complaint and

“draw[] all inferences in the plaintiff’s favor.” Allaire Corp. v. Okumus, 433 F.3d 248, 249–50

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(2d Cir. 2006) (internal quotations omitted). But a court is “not bound to accept as true a legal

conclusion couched as a factual allegation.” Twombly, 550 U.S. at 555.

III. DISCUSSION

The Moving Defendants contend that the TAC, like the SAC before it, fails to plead the

elements of a civil RICO claim because it does not plead a predicate act of racketeering that

proximately caused Plaintiffs’ injuries. See Mem. of Law in Supp. (Manafort et al.) [Dkt. No.

122]; Mem. of Law in Supp. (Vulcan) [Dkt. No. 125]. 3 The Court agrees.

A. RICO Claims

RICO proscribes four different types of racketeering activity. 18 U.S.C. § 1962. The first

applies to anyone “who has received any income derived, directly or indirectly, from a pattern of

racketeering activity” from using or investing that income either to acquire an interest in,

establish, or fund the operation of an “enterprise” affecting interstate or foreign commerce. 18

U.S.C. § 1962(a). The second prevents any person from acquiring an interest in or maintaining

control of such an enterprise “through a pattern of racketeering activity.” Id. § 1962(b). The third

bars anyone “employed by or associated with” such an enterprise from “conduct[ing] or

participat[ing], directly or indirectly, in the conduct of such enterprise’s affairs through a pattern

of racketeering activity.” Id. § 1962(c). And the fourth applies to any conspiracy to commit one

of the prior offenses. Id. § 1962(d).

Thus, to establish a RICO violation under any of these provisions, a plaintiff must allege

(1) that the defendant participated in an enterprise, and (2) that the enterprise engaged in a

“pattern” of racketeering activity, which requires the commission of at least two predicate acts

3
Defendant Manafort also moves to dismiss on the additional ground that the Court lacks personal jurisdiction over
him, as he did in response to the AC and the SAC. See Mem. of Law in Supp. (Manafort et al.) [Dkt. No. 121] at 24.
As in the two previous opinions, the Court resolves the motion without reaching Manafort’s jurisdictional argument.

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identified in 18 U.S.C. § 1961(1). In a case against multiple defendants, the defendant must have

“personally committed or aided and abetted in the commission of two predicate acts.” Sanchez v.

ASA Coll., Inc., No. 14-CV-5006, 2015 WL 3540836, at *6 (S.D.N.Y. June 5, 2015) (Furman, J.)

(emphasis added) (quoting McLaughlin v. Anderson, 962 F.2d 187, 192 (2d Cir. 1992)).

In order to obtain a civil remedy for a RICO violation under 18 U.S.C. § 1964(c), a

plaintiff must also demonstrate that he has standing, which requires: (1) a violation of 18 U.S.C.

§ 1962, (b) an injury to plaintiff’s business or property, and (c) proximate causation of the injury

by the defendant’s violation. Commercial Cleaning Servs., L.L.C. v. Colin Serv. Sys., Inc., 271

F.3d 374, 380 (2d Cir. 2001). Proximate cause, in turn, is established when the plaintiff’s injuries

are directly caused by the conduct that constitutes the RICO violation, id. at 381 (citing Holmes

v. Sec. Investor Prot. Corp., 503 U.S. 258, 268–73 (1992)), and the plaintiff’s injury is

“reasonably foreseeable or anticipated as a natural consequence” of the defendant’s conduct,

Lerner v. Fleet Bank, N.A., 318 F.3d 113, 123 (2d Cir. 2003) (internal quotation marks omitted);

Hecht v. Commerce Clearing House, Inc., 897 F.2d 21, 24 (2d Cir. 1990). An injury is

reasonably foreseeable when the plaintiff is the “target[], competitor[], or intended victim[]” of

the racketeering enterprise. Lerner, 318 F.3d at 124; In re Am. Express Co. S’holder Litig., 39

F.3d 395, 400 (2d Cir. 1994); Sperber v. Boesky, 849 F.2d 60, 65 (2d Cir. 1988).

Here Plaintiffs allege violations of all four subsections of 18 U.S.C. § 1962, predicated on

three types of acts: wire fraud under 18 U.S.C. § 1343, mail fraud under 18 U.S.C. § 1341, and

money laundering under 18 U.S.C. § 1956. See TAC ¶¶ 140, 142–44. However the TAC—like

the SAC—fails to plead adequately any predicate act that proximately caused Plaintiffs’ injuries,

and therefore fails to state a civil RICO claim.

1. Predicate Acts of Wire and Mail Fraud

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The elements of wire fraud and mail fraud are almost identical. For both, a plaintiff must

show (1) that the defendant initiated a scheme to defraud, (2) in order to obtain money or

property, and (3) that the scheme was furthered by the use of either interstate wires, 18 U.S.C. §

1343, or the mails, 18 U.S.C. § 1341. In both cases, the object of the fraud must be something of

value (i.e. money or property) “in the victim’s hands.” Pasquantino v. United States, 544 U.S.

349, 355 (2005).

Claims of either mail or wire fraud are subject to the heightened pleading standard under

Federal Rule of Civil Procedure 9(b), which requires, “at a minimum, a plaintiff pleading RICO

predicate acts sounding in fraud . . . [to] ‘specify the statements it claims were false or

misleading, give particulars as to the respect in which plaintiffs contend the statements were

fraudulent, state when and where the statements were made, and identify those responsible for

the statements.’” Lefkowitz v. Reissman, No. 12 CIV. 8703, 2014 WL 925410, at *4 (S.D.N.Y.

Mar. 7, 2014) (Abrams, J.) (quoting Moore v. PaineWebber, Inc., 189 F.3d 165, 173 (2d Cir.

1999)). A plaintiff must do more than say that a particular statement was false or misleading; he

or she must “demonstrate with specificity why and how that is so.” Sanchez, 2015 WL 3540836,

at *5 (quoting Rombach v. Chang, 355 F.3d 164, 174 (2d Cir. 2004)). When there are multiple

defendants, a plaintiff must specify how each contributed to the fraud, rather than simply allege

general participation in an overall fraudulent scheme. DiVittorio v. Equidyne Extractive Indus.,

Inc., 822 F.2d 1242, 1247 (2d Cir. 1987) (“Where multiple defendants are asked to respond to

allegations of fraud, the complaint should inform each defendant of the nature of his alleged

participation in the fraud.”); see also Spool v. World Child Int’l Adoption Agency, 520 F.3d 178,

185 (2d Cir. 2008) (“Allegations of predicate mail and wire fraud acts should state . . . who was

involved.”).

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Here, as with the previous complaint, Plaintiffs fail to allege predicate acts of mail and

wire fraud with sufficient particularity to pass the heightened pleading standard under Federal

Rule of Civil Procedure 9(b). In Tymoshenko II, the Court noted that, “Plaintiffs never explicitly

identify any particular act or transaction that constitutes wire or mail fraud.” 57 F. Supp. 3d at

317. The SAC did identify three courses of conduct that could be considered fraudulent: (1) the

false promises of salaries and benefits to Plaintiffs Snizek and Rullis, as well as other employees;

(2) the “sham real estate investment proposals” that falsely asserted Defendants had a serious

interest in properties in the U.S.; and (3) the marketing of Ukrainian properties to U.S. investors

at “fraudulently inflated prices.” Id. However the Court concluded that the pleadings were

inadequate to establish any of these as a predicate act for RICO purposes. Id. at 321–22.

The TAC identifies these same three courses of conduct, and offers nearly identical

factual allegations in support of them. Compare TAC ¶¶ 98–100, 139, 145, 148, 150 with SAC

¶¶ 93–95, 128, 131. Plaintiffs have amended their pleadings to incorporate some new references

to communications made via interstate mail or wires, e.g., TAC ¶¶ 76, 81, 84, 89-91, 98, but

none of these modifications provides enough specificity to overcome the failings identified

previously. With respect to all three courses of conduct, the TAC still fails to plead with

particularity specific statements that were made, when and where the statements were made, how

statements were fraudulent, and most crucially, who was responsible for making them. See

Lundy v. Catholic Health Sys. of Long Island, Inc., 711 F.3d 106, 119 (2d Cir. 2013); Rombach,

355 F.3d at 174.

Plaintiffs have also failed to establish that the alleged acts of mail and wire fraud

proximately caused the victims’ harms, because again they have failed to plead facts to establish

that they were the “targets, competitors, or intended victims” of the Enterprise. Although

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Plaintiffs have amended their complaint to include general allegations to this effect, see, e.g.,

TAC ¶ 13, these statements amount to no more than legal conclusions couched as factual

allegations, which the Court is not bound to accept as true. Twombly, 550 U.S. at 555. Plaintiffs

have not plead facts adequate to support the conclusion that obtaining money from the John Doe

investors was the purpose or object of the alleged scheme, even accepting as true the allegation

that investors wasted “time, money, and property” in reliance on Defendants’ misleading

statements. See Tymoshenko II, 57 F. Supp. 3d at 322–23. Plaintiffs have also not provided any

facts to show that obtaining the unpaid labor of Plaintiffs Snizek and Rullis was the purpose or

object of the alleged scheme. Therefore, the conclusory allegations that Plaintiffs were the

“targets or intended victims” of the Enterprise is insufficient to establish proximate cause for a

civil RICO claim based on a predicate act of wire or mail fraud.

2. Predicate Acts of Money Laundering

There are two primary sections to the money laundering statute, one that applies to

domestic activity and one that applies to international activity. The section that applies to

domestic activity, 18 U.S.C. § 1956(a)(1) (hereinafter the “domestic money laundering statute”),

requires that a defendant (1) engaged in a financial transaction that in fact involved the proceeds

of a specified unlawful activity, (2) knew that the transaction involved such proceeds, and (3)

either intended “to promote the carrying on of a specified unlawful activity,” 18 U.S.C. §

1956(a)(1)(A)(i), or knew the transaction was designed “to conceal or disguise the nature,

location, source, ownership, or control of the proceeds,” 18 U.S.C. § 1956(a)(1)(B)(i). A

“specified unlawful activity” is any activity listed in 18 U.S.C. § 1956(c)(7). Meanwhile the

section that applies to international activity, 18 U.S.C. § 1956(a)(2) (hereinafter the

“international money laundering statute”), applies whenever a defendant moves funds across the

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U.S. border “with the intent to promote the carrying on of a specified unlawful activity,” 18

U.S.C. § 1956(a)(2)(A). Importantly, this latter statute does not require that the funds being

transferred be the “proceeds” of a specified unlawful activity, so long as the party engaging in

the transfer has the requisite intent to “promote the carrying on of a specified unlawful activity.”

See Piervinanzi, 23 F.3d 670, 679–80 (contrasting the domestic and international money

laundering statute). 4

Whether Plaintiffs sufficiently plead a predicate act of money laundering is a closer

question than whether Plaintiffs have sufficiently plead acts of either wire or mail fraud, in part

because the pleading standard is lower. In Tymoshenko II, the Court identified three transactions

described in the SAC that could conceivably constitute money laundering: (1) the transfer of

funds from the Ukraine to the U.S.; (2) the acquisition of new U.S. companies to expand the

Enterprise; and (3) the transfer of funds from the U.S. back to the Ukraine. 57 F. Supp. 3d at 323.

The TAC describes these same transactions in almost identical terms. See TAC ¶¶ 24, 25, 27, 85,

104. None of these three transactions is plead with enough detail to state a violation of the

domestic money laundering statute, because Plaintiffs have failed to sufficiently allege that

Defendants engaged in a “specified unlawful activity” that actually generated proceeds that could

then be laundered. 5

Plaintiffs come closer to pleading an activity that would violate the international money

laundering statute when they allege that Defendants funneled money “through various Firtash-

4
There is one portion of the international money laundering statute, 18 U.S.C. § 1956(a)(2)(B), that does require the
defendant to have knowledge that the assets involved in the transfer are the proceeds of some form of unlawful
activity. But the requirement that the money involved in the transaction be the proceeds of an unlawful activity does
not apply to all subsections of the international money laundering statute, in contrast to the domestic statute.
5
Plaintiffs’ allegations that Defendants generated proceeds through unlawful “skimming” of natural gas transactions
between the Ukraine and Russia, see, e.g., TAC ¶ 24, are not enough to support a violation of the domestic money
laundering statute, even assuming such conduct is in fact a violation of Ukrainian law. The domestic money
laundering statute applies only to the laundering of proceeds of specified unlawful activities listed in 18 U.S.C. §
1956(c), none of which encompasses the “skimming” conduct Plaintiffs describe.

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controlled European banks and bank accounts to New York-based banks, and then wired [the

money] back to European bank accounts . . . through various complex and circuitous transfers”

in order to generate “untraceable funds.” TAC ¶ 10. According to Plaintiffs, these funds were

then used to finance a “campaign to neutralize and destroy Tymoshenko . . . by means of illegal

pay-offs to prosecutors and others in the Yanukovich administration.” Id. Accepting these

allegations as true, Plaintiffs have arguably plead that Defendants (collectively) (1) transferred

funds across the U.S. border, and (2) that they did so with the intent of promoting a specified

unlawful activity, namely, “an offense against a foreign nation involving . . . bribery of a foreign

official.” 18 U.S.C. § 1956(c)(7)(B)(iv).

But even assuming Plaintiffs have successfully plead a predicate act of money

laundering, they nonetheless fail to establish a violation of RICO for two primary reasons: first,

because they have not provided enough detail in their allegations to show that the predicate acts

of money laundering took place on more than one occasion, which is necessary to establish a

“pattern” of activities for RICO; and second, because they have failed to allege facts sufficient to

establish that the Defendants were involved.

As discussed previously, in order to sufficiently plead any of the alleged RICO

violations, Plaintiffs must show that there was a “pattern” of racketeering activity. GICC Capital

Corp. v. Technology Finance Grp., Inc., 67 F.3d 463, 465 (2d Cir. 1995). A “pattern of

racketeering activity” requires “at least two acts of racketeering activity.” 18 U.S.C. § 1961(5).

These acts (1) must be related, and (2) must amount to or pose a threat of continuing criminal

activity. H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229, 239 (1989); Spool, 520 F.3d at

183. Continuity can be either “open-ended”—meaning there is a “threat of continuing criminal

activity beyond the period during which the predicate acts were performed,” Cofacrédit, S.A. v.

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Windsor Plumbing Supply Co., 187 F.3d 229, 242 (2d Cir. 1999)—or “closed-ended”—which

requires “a series of related predicates extending over a substantial period of time,” H.J., 429

U.S. at 242. Although there is no bright line rule, the Second Circuit has never held a period of

less than two years to constitute a substantial period of time. Spool, 520 F.3d at 184. The relevant

time period is the period during which the RICO predicate activity took place, rather than the

time during which the underlying scheme was in operation. Id.; see also DeFalco v. Bernas, 244

F.3d 286, 321 (2d Cir. 2001).

The TAC fails to allege predicate acts of money laundering with enough specificity to

establish a pattern under RICO. The TAC doesn’t even clearly state that there was more than one

transaction. Reading the pleadings generously, one could assume that Defendants must have

engaged in at least two transactions, namely one moving funds from the Ukraine to the U.S. and

one moving funds from the U.S. to the Ukraine, both by way of numerous intermediaries. See

TAC ¶ 4. But the pleadings could just as plausibly be read as describing transfers that were part

of one continuous transaction that routed funds out of the Ukraine, through numerous

intermediate locations (of which the U.S. was just one), and back to the Ukraine. And even

taking the more generous view, i.e. assuming the existence of at least two independent

transactions, nothing in the TAC specifies when these transactions took place, approximately

how many there were, and most crucially, which Defendants were involved in which transactions

and in what capacity. See Reply Mem. in Supp. [Dkt. No. 130] at 6.

Furthermore, the TAC does not state how Defendants are the proximate cause of

Tymoshenko’s harms. 6 Although Plaintiffs have incorporated in the TAC conclusory allegations

6
The TAC alleges no facts to show how Plaintiffs Snizek and Rullis, as well as the unknown John Doe Plaintiffs,
were harmed by the Defendants’ alleged money laundering for the purpose of promoting bribery of a Ukrainian
official. Therefore, the Court’s analysis of proximate cause in the context of money laundering as a RICO predicate
act focuses only on Plaintiff Tymoshenko.

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that Defendants “intentionally and knowingly” funded the “unlawful investigations and

prosecutions” of Tymoshenko, TAC ¶ 10, the pleadings do not describe what role each

Defendant played in the “complex and circuitous” series of transfers funneling money back and

forth across the Atlantic, id. In the RICO context, proximate cause analysis must focus on the

directness of the relationship between the conduct and the harm. Hemi Grp., LLC v. City of New

York, N.Y., 559 U.S. 1, 12 (2010). Without specifying the particular contribution of each

Defendant to the money laundering scheme, Plaintiffs fail to establish the requisite directness of

relationship between each Defendant’s conduct and the harm suffered by Tymoshenko. See

McLaughlin, 962 F.2d at 192.

Therefore, because Plaintiffs have failed to plead a pattern of money laundering acts by

Defendants that proximately caused their harms, they have failed to allege acts necessary to

support their civil RICO claim.

B. State Law Claims

Plaintiffs also bring claims under state law alleging fraud and malicious prosecution.

TAC ¶¶ 147–55. However, the TAC’s RICO allegations are the only claims over which this

Court has original jurisdiction. Having dismissed those claims, the Court declines to exercise

supplemental jurisdiction over Plaintiffs’ state law claims, pursuant to 28 U.S.C. § 1367(c)(3).

IV. CONCLUSION

Given that this is now Plaintiffs’ fourth unsuccessful attempt to plead RICO claims, and

given that the changes in the TAC fail to remedy the deficiencies found in the SAC, the Court

declines to grant Plaintiffs yet another opportunity to amend their pleadings. When further

amendment is likely to be futile, leave to amend need not be granted. See De Jesus v. Sears,

Roebuck & Co., 87 F.3d 65, 72 (2d Cir. 1996) (“Plaintiffs were accorded four opportunities to

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plead their claims in this case, and the deficiencies in their federal claims are fundamental. The

district court did not abuse its discretion by refusing them a fifth opportunity.” (internal citations

omitted)); see also Ruffolo v. Oppenheimer & Co., 987 F.2d 129, 131; BNP Paribas Mortgage

Corp. v. Bank of Am., N.A., No. 09 Civ. 9783, 2013 WL 6484727, at 6* (S.D.N.Y. Dec. 9, 2013)

(Sweet, J.). The changes from the SAC to the TAC are largely superficial or irrelevant and have

not remedied the fundamental defects identified by this Court in Tymoshenko II.

For the foregoing reasons, the TAC is dismissed with prejudice. The Clerk of Court is

directed to close this case.

SO ORDERED.

DATED: New York, New York

September 18, 2015

/s/
KIMBA M. WOOD
United States District Judge

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