The opinion of the court was delivered by: Reagan, District Judge
Plaintiffs, Jay E. Hayden Foundation, Charles C. Palmer and Sara Johnson, filed in this Court a two-count second amended complaint against Defendants, First Neighbor Bank, N.A., Carol Jo Fritts, Bradley Fitch, June Hayden, William A. Sunderman, John Cutright, Cutright & Cutright, Ltd., Ralph Glenn, Glenn & Logue and Morris Lane Harvey (Doc. 95). The second amended complaint alleges that Defendants entered into a conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1962(c)-(d), by obtaining money from the Jay Hayden estate, Martha Hayden and R. Maurine Johnson through false and fraudulent pretenses and representations.
The Court has previously had cause to consider the issues herein. On December 17, 2008, the Court granted motions to dismiss filed by Defendants Sunderman, Harvey, Cutright and Cutright & Cutright, Ltd.; Glenn and Glenn & Logue; and First Neighbor Bank, N.A., Bradley Fitch, Carol Jo Fritts and June Hayden (Doc. 94). The Court determined that Plaintiffs' claims were barred by the applicable statute of limitations and dismissed the action without prejudice to Plaintiffs' filing an amended complaint. On January 5, 2009, Plaintiffs timely filed the second amended complaint, on which this action now proceeds.
Now before the Court are Defendants Cutright & Cutright, Ltd., and John Cutright's Motion to Dismiss Plaintiffs' Second Amended Complaint (Doc. 98); Defendants First Neighbor Bank, N.A., Bradley Fitch, Carol Jo Fritts and June Hayden's Motion to Dismiss Second Amended Complaint(Doc. 100); Defendant Morris Lane Harvey's Motion to Dismiss Plaintiffs' Second Amended Complaint (Doc. 102); Defendant William A. Sunderman's Motion to Dismiss the Second Amended Complaint (Doc. 104); and Defendants Glenn & Logue and Ralph Glenn's Motion to Dismiss Plaintiffs' Second Amended Complaint (Doc. 106). The motions have been fully briefed. The Court begins its analysis with a recitation of the key facts alleged by Plaintiffs.
The factual background set forth by Plaintiffs comprises a series of schemes: Martha and Jay Hayden scheme, M&M account scheme, IGA scheme, suspicions and attempted cover-up, and the stonewall. The Court adopts Plaintiffs' organization of their claims.
A. The Martha and Jay Hayden Scheme
Martha Hayden ("Martha') survived both her husband and her only child, Jay Hayden ("Jay"). She inherited various assets from her husband's estate and $400,000 from Jay, an investor in real estate, oil leases, horses and a grocery store. Robert Cochonour, a former state's attorney and former Illinois 5th Circuit Court Judge, was appointed executor of Jay's estate in 1985 and served as such until 2002. Martha Hayden was diagnosed with Alzheimer's disease several years prior to October 2000 and died in 2001.
According to Plaintiffs, beginning in July 1985, Cochonour, in combination with Defendants, embarked upon an enterprise whereby he converted Martha's funds and Jay's estate to his own use by forging signatures, selling assets and transferring money among various accounts. Plaintiffs allege that Defendants assisted Cochonour in concealing his activities by such actions as preparing false legal and other documents, making misrepresentations in court and elsewhere, allowing him to forge signatures, approving and enabling fraudulent transactions, and obstruction.
B. The M&M Account Scheme
Plaintiffs contend that, between February 1993 and February 1996, Cochonour and the Bank Defendants (Fritts, Fitch, Hayden and First Neighbor Bank*fn1 ) engaged in a continuous course of conduct to defraud R. Maurine Johnson ("Maurine") and Mary Cochonour Johnson ("Mary") of their property through the unlawful use of monies from Jay's estate and Martha's accounts. Specifically, Plaintiffs allege that Cochonour forged Maurine's and Mary's signatures, and intermingled funds from Maurine's account with funds from Jay's estate; he then used Plaintiffs' funds for his own benefit and that of his family. Plaintiffs maintain that the Bank Defendants approved and enabled these fraudulent transactions.
Plaintiffs allege that, in 2000, Martha's signature was forged on three loans, two of which were made to Hayden's IGA Partnership by Greenup Bank. By October, when the latter of these loans was made, Martha's doctor had concluded that she lacked the mental capacity to participate in any decision pertaining to business matters because of Alzheimer's disease.
Plaintiffs contend that Defendants Fritts, Fitch and Hayden knew that Martha's signature was forged but allowed the loan to be closed and the funds to be dispersed. They also contend that Defendant Sunderman, who represented Toledo Bank, learned of the forgery but did not take any action to report the matter to the bank, government officials or the Illinois Judicial Inquiry Board, of which he was chairman at that time. Plaintiffs submit that the forged promissory note and security agreement were used to assist Greenup Bank in obtaining insurance proceeds after a fire at the IGA.
Lastly, Plaintiffs allege that the third loan - made in December 2000 - was authorized by Fritts, Fitch, Hayden and Toledo Bank on Martha's forged signature. They assert that the loan was made despite the fact that Fritts knew that Martha was incapacitated and despite the fact that the IGA had burned while it purportedly owed approximately $89,000 to Toledo Bank.
C. Suspicions and Attempted Cover-Up
Plaintiffs submit that between January and June 2002, the schemes began to unravel. In January 2002, Cochonour partially acknowledged his theft of some of Maurine's funds used to open the M&M account. Cochonour allegedly persuaded Mary to drop the inquiry with a promise ...