for U.S. Grinding while he was still employed by Midwest. (Id. para. 92.)
After U.S. Grinding commenced operations, a number of Midwest customers began sending a portion of their grinding work to this new competitor in the industry. With respect to certain customers, this occurred as early as May 1986, while Spitz still was employed by Midwest. The record is replete with factual issues regarding whether Spitz was involved in obtaining some or all of this business for U.S. Grinding. The evidence presented by plaintiff permits the reasonable inference that Spitz, during the time that he was employed by Midwest, participated in the transfer of some or all of this grinding work to defendant U.S. Grinding. (See, e.g., id. paras. 67, 94, 96, 98, 100, 103-24, 125, 127, 129-31, 133-37, 140-42.) Similarly, after Spitz resigned from Midwest, other Midwest customers began to send grinding work to U.S. Grinding. (See id. paras. 138-39.)
In June 1986, after Spitz already had been soliciting business for U.S. Grinding, Midwest presumably experienced a decline in its grinding orders. Spitz reported to plaintiff's Board of Directors that the grinding business was in a depressed state and that he had been spending a substantial amount of his time in the field in an effort to obtain new business. (Id. para. 207; see also id. paras. 208, 216.)
The Midwest customers who began to utilize the services of U.S. Grinding placed orders with that company in one of two ways -- either orally (by telephone or in person) or by preparing and mailing to U.S. Grinding a purchase order. (Def. 12(m) para. 28.) At times, a customer would place an order verbally and then confirm that order in writing. (Pl. 12(n) para. 28.) After U.S. Grinding received an order, it would prepare five copies of an invoice, one of which eventually would be mailed to the customer as a bill for the grinding work performed. (Def. 12(m) para. 29.)
Plaintiff also presented evidence suggesting that Spitz may have induced other Midwest employees to become involved with U.S. Grinding during the time that they were employed by Midwest. (Pl. Add. 12(n) paras. 56, 201-03; see also Def. 12(m) paras. 31-36.) For example, Dick Harrison and Carolyn Mathewson both were employed by Midwest, both purportedly were involved with U.S. Grinding while still employed by Midwest, and both accepted positions with U.S. Grinding shortly after Spitz did so in August 1986. (Pl. Add. 12(n) para. 169, 175, 178-79, 181-83, 184, 187-88, 190-92, 195, 198.) Moreover, in June 1986, Spitz fired or laid off Midwest's entire night shift, which consisted of approximately six men. (Id. paras. 210, 212; cf. id. paras. 213-14.) Certain of these individuals were later employed by U.S. Grinding. (Def. 12(m) paras. 31-36.)
On August 12, 1986, Spitz mailed to the Board of Directors of Klein Tool a request that Klein Tool buy his stock in Midwest, effective August 11, 1986. (Pl. Add. 12(n) para. 217; see also Def. 12(m) para. 9.) In that letter, Spitz neither disclosed the existence of U.S. Grinding nor his involvement with that company. (Pl. Add. 12(n) para. 217.) At the time of his resignation, Spitz knew that certain Midwest customers had been sending grinding work to U.S. Grinding. (Id. para. 218.) He also knew that certain grinders who once had been employed by plaintiff were now working for U.S. Grinding. (Id.) On the same day that he mailed the above letter, Spitz became an employee of U.S. Grinding. (Id. para. 42.) The U.S. Grinding payroll ledgers reflect that, beginning on September 7, 1986, that company paid Spitz a net salary of $ 775.00 per week. (Id. para. 58.)
Plaintiff retained an expert to ascertain the measure of its damages. The expert's opinion, as submitted to the Court with the materials on summary judgment, is that Midwest was damaged by defendants' conduct in the following ways: (1) sales lost to U.S. Grinding prior to the date of Spitz' departure from Midwest; (2) sales lost to U.S. Grinding between August 11 and December 31, 1986 as a result of contacts initiated by Spitz while still employed by Midwest; (3) loss of profit margins on sales retained by Midwest during the relevant time period as a result of competition from U.S. Grinding; and (4) compensation paid to Spitz by plaintiff when Spitz actually was helping to form and to operate U.S. Grinding. (Id. para. 228.)
Defendants have moved for summary judgment with respect to all of plaintiff's claims, contending that Midwest has failed to establish a genuine issue of material fact as to any of the four counts in its second amended complaint. The Court reaches only the RICO claim.
In moving for summary judgment, defendants bear the burden of establishing that there is no genuine issue of material fact and that they are entitled to judgment as a matter of law. New Burnham Prairie Homes, Inc. v. Village of Burnham, 910 F.2d 1474, 1477 (7th Cir. 1990); Fed.R.Civ.P. 56(c). The Court must consider the facts and all reasonable inferences drawn therefrom in the light most favorable to the nonmovant, and where there are doubts as to whether a genuine factual dispute exists, the Court must resolve such doubts in favor of Midwest, the nonmoving party. Burnham, 910 F.2d at 1477. However, once the movants have satisfied their initial burden, the nonmovant has the affirmative burden to come forward with evidence demonstrating that there is a genuine issue of material fact which must reach the factfinder. Id.; Baucher v. Eastern Indiana Production Credit Association, 906 F.2d 332, 334 (7th Cir. 1990). A disputed fact is material when it is "outcome determinative under the governing law." Whetstine v. Gates Rubber Co., 895 F.2d 388, 392 (7th Cir. 1990); see also Shlay v. Montgomery, 802 F.2d 918, 920 (7th Cir. 1986). A fact is genuinely in dispute when "'the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Whetstine, 895 F.2d at 392 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986)).
A. Count I -- The RICO Claim.
Defendants contend that they are entitled to summary judgment on count I of plaintiff's second amended complaint, which alleges violations of §§ 1962(c) & (d) of the RICO statute, 18 U.S.C. §§ 1962(c) & (d). Section 1962(c) makes it unlawful "for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt." Section 1962(d) makes it unlawful to conspire to violate subsections (a), (b), or (c) of § 1962. Plaintiff's § 1962(c) claim is directed only at defendant Spitz, whereas the § 1962(d) conspiracy claim is aimed at both Spitz and U.S. Grinding. See Midwest, 716 F. Supp. at 1093-94.
To establish a violation of § 1962(c), plaintiff must show that Spitz conducted an enterprise through a pattern of racketeering activity. Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496, 105 S. Ct. 3275, 3285, 87 L. Ed. 2d 346 (1985); Hartz v. Friedman, 919 F.2d 469, 471 (7th Cir. 1990); Haroco, Inc. v. American National Bank and Trust Co., 747 F.2d 384, 387 (7th Cir. 1984), aff'd, 473 U.S. 606, 105 S. Ct. 3291, 87 L. Ed. 2d 437 (1985). Plaintiff contends that Spitz conducted U.S. Grinding, the RICO "enterprise" in this instance, through such a pattern of illegal activity. The predicate acts purportedly giving rise to a RICO violation are those of mail fraud; plaintiff contends that Spitz violated the mail fraud statute by devising a scheme to defraud Midwest and by using the mails for the purpose of executing that scheme. See 18 U.S.C. § 1341; Midwest, 716 F. Supp. at 1092 & n. 1. The mailings at issue are the series of invoices sent by U.S. Grinding to former customers of Midwest, as well as the August 12, 1986 letter from Spitz to Klein Tools in which Spitz requested that Klein Tools purchase his Midwest shares.
According to plaintiff, the invoices were instrumental in defendants' scheme to defraud Midwest because they were the vehicle through which U.S. Grinding collected payments from Midwest's former customers. Moreover, the August 12, 1986 letter purportedly furthered the scheme because, in requesting that Klein Tools purchase his Midwest shares, Spitz failed to inform Klein Tools of his involvement with U.S. Grinding, a company that was directly competing with Midwest in the market for grinding services.
In the present motion, Spitz advances three independent bases for a grant of summary judgment in his favor on the RICO count. First, Spitz claims that the scheme to defraud was complete when the invoices at issue were mailed to Midwest's former customers and that, therefore, the mailings were not made in furtherance of the scheme to defraud. Second, Spitz argues that plaintiff has failed to establish the requisite "pattern of racketeering activity" in light of the Supreme Court's decision in H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 109 S. Ct. 2893, 106 L. Ed. 2d 195 (1989). Finally, Spitz contends that plaintiff has not shown that he conducted or participated in the affairs of U.S. Grinding, the "enterprise" for purposes of plaintiff's RICO claim. Because it finds that plaintiff has failed to establish a pattern of racketeering activity, the Court grants defendants' motion on that ground and will not reach Spitz' alternative arguments.
1. The "Pattern" Requirement.
Defendants contend that, even if the Court were to accept plaintiff's argument that the mailing of the invoices constitutes a prohibited predicate act of mail fraud, plaintiff still has not made out a RICO claim because it has not established the requisite pattern of racketeering activity. In advancing this argument, defendants rely primarily on the Supreme Court's decision in H.J. Inc., contending that pursuant to that decision, plaintiff must prove that the racketeering acts occurred over an extended period of time and continue or pose a threat of doing so. (Defendants' Mem., at 6-7.)
According to defendants, plaintiff has failed to establish this "continuity" element because the fraudulent scheme alleged by plaintiff occurred at most over a three- to four-month period, and the scheme necessarily ended when Spitz resigned from Midwest. (Id. at 7.) Thus, defendants contend that there is no threat that the allegedly fraudulent conduct will or might continue.
In response, Midwest fails to address the possible impact of H.J. Inc., but instead retorts that "the Court has already rejected [defendants'] argument that the facts alleged are insufficient to support the conclusion of a pattern of racketeering activity." (Plaintiff's Mem., at 8.) In light of the Court's earlier decision on the motion to dismiss, plaintiff maintains that "Spitz would be entitled to summary judgment on the pattern point only if Midwest had no evidence to support its allegations." (Id.)
Midwest contends that it has produced such evidence and that, therefore, the requisite pattern of racketeering activity has been established. The Court cannot agree. Under H.J. Inc. and subsequent decisions of the Seventh Circuit interpreting the pattern requirement, Midwest has failed to establish the existence of a pattern of racketeering activity. As a result, defendants are entitled to summary judgment on plaintiff's RICO claim.
A "pattern of racketeering activity" under the statute "consists of at least two predicate acts of racketeering committed within a ten-year period." Olive Can Co. v. Martin, 906 F.2d 1147, 1150 (7th Cir. 1990); see also 18 U.S.C. § 1961(5). The Supreme Court reaffirmed in H.J. Inc. that two elements are to be considered in analyzing the pattern requirement -- relationship and continuity. H.J. Inc., 492 U.S. at 239, 109 S. Ct. at 2900 ("'It is this factor of continuity plus relationship which combines to produce a pattern.'") (Supreme Court's emphasis) (quoting S.Rep. No. 91-617, at 158 (1969)); see also Sedima, S.P.R.L., 473 U.S. at 496 n. 14, 105 S. Ct. at 3285 n. 14; J.D. Marshall International, Inc. v. Redstart, Inc., 935 F.2d 815 (7th Cir. 1991); Sutherland v. O'Malley, 882 F.2d 1196, 1203 (7th Cir. 1989); Hartz, 919 F.2d at 472; Morgan v. Bank of Waukegan, 804 F.2d 970, 975 (7th Cir. 1986); Midwest, 716 F. Supp. at 1094. To establish the requisite pattern of racketeering activity, Midwest must show both "that the racketeering predicates are related, and that they amount to or pose a threat of continued criminal activity." H.J. Inc., 492 U.S. at 239, 109 S. Ct. at 2900 (emphasis in original); see also U.S. Textiles, Inc. v. Anheuser-Busch Cos., 911 F.2d 1261, 1266 (7th Cir. 1990); Olive Can Co., 906 F.2d at 1150 ("To establish a pattern, the plaintiff must prove continued criminal activity or a threat of continued activity (the continuity element), and a relationship between the predicate acts (the relationship element).").
In its opinion on defendants' motion to dismiss, the Court held that plaintiff had sufficiently alleged a pattern of racketeering activity. Midwest, 716 F. Supp. at 1094-96. In doing so, the Court relied upon the four factors identified by the Seventh Circuit as relevant to the pattern requirement: "(1) the number and variety of predicate acts and the length of time over which they were committed; (2) the number of victims; (3) the presence of separate schemes; and (4) the occurrence of distinct injuries." Id. at 1094 (quoting Jones v. Lampe, 845 F.2d 755, 757 (7th Cir. 1988)); J.D. Marshall, 935 F.2d at 820; see also Morgan, 804 F.2d at 975. Subsequent to the Supreme Court's decision in H.J. Inc., the Seventh Circuit has recognized the continued vitality of these four factors in analyzing the existence of a RICO pattern. See, e.g., Hartz, 919 F.2d at 472; U.S. Textiles, 911 F.2d at 1266.
In its earlier opinion, the Court concluded that the allegations in plaintiff's second amended complaint passed the "continuity plus relationship" test. Midwest, 716 F. Supp. at 1095. Addressing the alleged scheme to divert business, employees, and property from Midwest to U.S. Grinding, the Court stated:
the factual circumstances alleged in Midwest's complaint with relation to this scheme are not properly characterized as only "one episode of fraud," and the multiple racketeering acts allegedly committed by defendants do not relate to only "one basic transaction." Instead, Midwest's allegations set forth a series of transactions, each of which amounted to a single episode of fraud.
Id. The Court concluded that, based upon the allegations in plaintiff's complaint, "each lost transaction therefore caused Midwest a distinct injury." Id. The Court found that the acts alleged
were sufficiently separate in time and place to meet the "continuity" prong of the test. The acts related to separate transactions, caused numerous distinct injuries, and occurred over a seven-month span. At the same time, the acts are sufficiently related to meet the "relationship" prong of the test. The acts were inflicted upon the same victim, Midwest, involved the same type of fraud, and were committed somewhat closely in time.
Id. at 1095-96. Accordingly, the Court found the allegations sufficient to allege a pattern of racketeering activity. Id. at 1096.
At the summary judgment stage, the Court concludes that the relationship element of the pattern requirement still has been satisfied. The Seventh Circuit has held that predicate acts are related "if the acts 'have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events.'" Hartz, 919 F.2d at 472 (quoting H.J. Inc., 492 U.S. at 240, 109 S. Ct. at 2901); see also J.D. Marshall, 935 F.2d at 820; U.S. Textiles, 911 F.2d at 1267; Sutherland, 882 F.2d at 1204. In its earlier opinion, the Court held that the acts of mail fraud alleged in plaintiff's complaint satisfied the "relationship" test because the "acts were inflicted upon the same victim, Midwest, involved the same type of fraud, and were committed somewhat closely in time." Id. In their motion for summary judgment, defendants do not challenge the existence of a relationship between the predicate acts of mail fraud alleged by plaintiff, and the evidence plainly establishes the existence of such a relationship. The predicate acts involve the same type of misconduct occurring over a relatively short period of time. Moreover, all such acts were undertaken with a common purpose -- to divert plaintiff's grinding business to U.S. Grinding. See J.D. Marshall, 935 F.2d at 820. Accordingly, the Court finds that the "relationship" element of the pattern requirement has been satisfied.
Defendants do contend, however, that plaintiff has failed to establish the continuity element. (Defendants' Mem., at 6-7.) In its earlier opinion, the Court found that plaintiff had pleaded facts sufficient to satisfy the continuity element because the acts alleged -- the diversion of business in nearly one hundred separate transactions, the diversion of Midwest employees to U.S. Grinding, and the use of Midwest's truck for U.S. Grinding deliveries -- "related to separate transactions, caused numerous distinct injuries, and occurred over a seven-month span." Midwest, 716 F. Supp. at 1095. Accordingly, the Court found the acts "sufficiently separate in time and place to meet the 'continuity' prong of the test." Id.
Defendants suggest that H.J. Inc., decided by the Supreme Court after this Court's initial decision in Midwest, changed the rules regarding the "continuity" necessary to establish a RICO pattern. In particular, defendants focus on the Supreme Court's statement in H.J. Inc. that "predicate acts extending over a few weeks or months and threatening no future criminal conduct do not satisfy [the continuity] requirement." 492 U.S. at 242, 109 S. Ct. at 2902; see Defendants' Mem. at 7. It is with good reason that defendants focus on H.J. Inc., for since the Supreme Court's decision in that case, the Seventh Circuit has not found a pattern of racketeering activity to exist in any civil RICO case that has presented the issue. Hartz, 919 F.2d at 472. Rather, in each case decided since H.J. Inc., the Seventh Circuit has concluded "that the necessary continuity was absent." Id. (collecting cases).
The Supreme Court held in H.J. Inc. that in order to satisfy the continuity requirement, a RICO plaintiff must establish that "the predicates themselves amount to, or that they otherwise constitute a threat of, continuing racketeering activity.'" H.J. Inc., 492 U.S. at 240, 109 S. Ct. at 2901 (emphasis in original); see also J.D. Marshall, 935 F.2d at 820; U.S. Textiles, 911 F.2d at 1267. Recognizing the difficulty in the abstract of formulating any definitive test for continuity, the Supreme Court defined the concept as both closed- and open- ended. "Continuity," the Court held, refers "either to a closed period of repeated conduct, or to past conduct that by its nature projects into the future with a threat of repetition." H.J. Inc., 492 U.S. at 241, 109 S. Ct. at 2902; see also U.S. Textiles, 911 F.2d at 1267; R.E. Davis Chemical Corp. v. Nalco Chemical Co., 757 F. Supp. 1499, 1517 (N.D. Ill. 1990) (Rovner, J.) ("the plaintiff must either demonstrate that the defendants have engaged in racketeering activity over a substantial period of time in the past, or that the defendants have embarked upon a course of racketeering activity which threatens to continue into the future."). A "party alleging a RICO violation may demonstrate continuity over a closed period by proving a series of related predicates extending over a substantial period of time;" however, "predicate acts extending over a few weeks or months and threatening no future criminal conduct do not satisfy this requirement." H.J. Inc., 492 U.S. at 242, 109 S. Ct. at 2902.
In interpreting and applying this closed-ended test of continuity, the Court is mindful of the Supreme Court's admonition that Congress intended RICO to "reach activities that amount to or threaten long-term criminal activity." H.J. Inc., 492 U.S. at 243 n. 4, 109 S. Ct. at 2902 n. 4; see also P & P Marketing, Inc. v. Ditton, 746 F. Supp. 1354, 1367 (N.D. Ill. 1990) (Lindberg, J.).
Whether such long-term criminal conduct exists in a particular case requires the Court to carefully examine all facts; the Seventh Circuit has held that "no one factor is determinative" to the continuity analysis. Olive Can Co., 906 F.2d at 1151; see also H.J. Inc., 492 U.S. at 242, 109 S. Ct. at 2902 ("Whether the predicates proved establish a threat of continued racketeering activity depends on the specific facts of each case."). With these principles in mind, the Court turns to the evidence presented by the parties on the current motion.
4. "Continuity" is absent here.
After the Supreme Court's decision in H.J. Inc., perhaps the most important of the four factors identified by the Seventh Circuit as relevant to the continuity analysis is the first: the number and variety of predicate acts and the length of time over which they were committed. In the materials presented to the Court on summary judgment, plaintiff has identified numerous instances in which the mails were used to further defendants' purportedly fraudulent scheme. Plaintiff references hundreds of invoices that were mailed by defendants to former Midwest customers in furtherance of their scheme. (See Midwest Mem., at 7 n. 3.) This voluminous number of predicate acts in most circumstances would suggest the continuity necessary to establish a pattern. In most instances, proof of a significant number of predicate acts will clearly benefit a RICO plaintiff in meeting the pattern requirement. See U.S. Textiles, 911 F.2d at 1268. However, with respect to the type of mail fraud involved here, the sheer number of mailings does not aid plaintiff's cause. The Seventh Circuit recently reaffirmed that it "does not look favorably on relying on many instances of mail and wire fraud to form a pattern." Hartz, 919 F.2d at 473. Instead, the Court of Appeals has indicated that "allegations of mail fraud and wire fraud are unique among predicate acts" because a multiplicity of such acts "'may be no indication of the requisite continuity of the underlying fraudulent activity.'" Id. (quoting Lipin Enterprises v. Lee, 803 F.2d 322, 325 (7th Cir. 1986) (Cudahy, J., concurring); see also Ashland Oil, Inc. v. Arnett, 875 F.2d 1271, 1278 (7th Cir. 1989) ("the number of [mail and wire fraud] offenses is only tangentially related to the underlying fraud, and can be a matter of happenstance.").
These principles have particular application to the present case. The predicate acts identified by plaintiff all involve use of the mails to further defendants' purportedly fraudulent scheme. For the most part, the mailings at issue were invoices sent to former Midwest customers requesting payment for services rendered by U.S. Grinding. Although the number of such invoices may have been great, there was little if any variety in the acts alleged. See Olive Can Co., 906 F.2d at 1151 ("while there were a large number of predicate acts, they were not of great variety.").
Instead, U.S. Grinding utilized the mails to invoice all of its customers, both those that may have been wrongfully diverted from Midwest and others that had not been so diverted. Although numerous invoices were involved in the present case, those invoices were largely directed to a limited number of customers. As a result, the number of mailings at issue is only tangentially related to the scope of the underlying fraud.
In these circumstances, the Court concludes that the sheer number of invoices does not translate automatically into a pattern of racketeering activity. See Hartz, 919 F.2d at 473.
Moreover, and more importantly, although plaintiff suggests that the allegedly fraudulent scheme extended over a nine month period (Plaintiff's Mem., at 8),
there is no dispute that the scheme had a definite conclusion and that no threat of continued criminal activity is posed. As presented by plaintiff itself, the "real issue in this case . . . is that for about nine months, from December 1985 into August 1986, Spitz secretly competed with Midwest, while remaining the president and a director" of that company. (Plaintiff's Mem., at 8.)
Plaintiff does not suggest and has presented no evidence to prove that defendants' conduct continues today or poses a threat of continuing sometime in the future. The reason is clear -- once Spitz left plaintiff's employment on August 11, 1986, he was free to compete with plaintiff. The undisputed evidence establishes that Spitz was not bound by any agreement restricting such competition. Once the employer-employee relationship between Midwest and Spitz was terminated, Spitz no longer owed plaintiff the duties of trust and loyalty associated with the positions of an officer and director. Thus, any scheme to defraud Midwest by virtue of his involvement with U.S. Grinding necessarily ended with Spitz' resignation and his subsequent employment with U.S. Grinding. Although Spitz perhaps may be liable under Illinois law for injuries sustained subsequent to the period of his breach (see Vendo Co. v. Stoner, 58 Ill. 2d 289, 321 N.E.2d 1 (1974), cert. denied, 420 U.S. 975, 95 S. Ct. 1398, 43 L. Ed. 2d 655 (1974)), he was free after the termination of his employment to compete with plaintiff in the market for grinding services. At that point, it was not unlawful for Spitz and U.S. Grinding to solicit Midwest's customers, for competitors regularly engage in such conduct. In short, once Spitz terminated his employment relationship with Midwest, there was no threat that the alleged unlawful conduct would continue. There can be no doubt, therefore, that this is a "closed-ended" case under H.J. Inc. See H.J. Inc., 492 U.S. at 242, 109 S. Ct. at 2902.
In a closed-ended case such as this, plaintiff may establish the requisite continuity only by showing "a series of related predicates extending over a substantial period of time." Id. In attempting to make such a showing here, plaintiff is met with (and fails to address) the Supreme Court's admonition in H.J. Inc. that "predicate acts extending over a few weeks or months and threatening no future criminal conduct do not satisfy this requirement." Id.
The Seventh Circuit extensively addressed the issue of closed-ended continuity in Olive Can Co. v. Martin, supra. In that case, the plaintiff alleged a RICO violation when the defendants established a sham corporation, concealed the existence of that corporation from plaintiffs, and utilized the corporation to divert funds owed to plaintiffs to one of the individual defendants. 906 F.2d at 1148-49. After five years of discovery, Judge Holderman granted the defendants' motion for summary judgment on the RICO claim, finding that defendants' fraudulent activity "was limited to the last six months of 1983," that the scheme was "closed-ended," and that "there was no threat of continuing racketeering activity." Id. at 1150.
The Seventh Circuit affirmed that determination, emphasizing that the fraudulent scheme alleged by the plaintiffs had "a single, short-term goal: giving [the individual defendant] a security interest in the proceeds of the sales of [a corporate defendant] without notifying their secured lender or their trade creditors." Id. at 1152. The Court concluded that
the scheme, therefore, had a natural ending with no threat of continued criminal activity. This single scheme was to be short-lived and there is no evidence that, had the scheme worked, it would have been repeated in the future. There is, therefore, no "specific threat of repetition," nor has there been a showing that the predicate acts are part of the defendants' "regular way of doing business."