Opinion ID: 2585
Heading Depth: 5
Heading Rank: 1

Heading: Nexicon Association-In-Fact Enterprise

Text: The District Court erred in holding that the City failed to adequately plead an enterprise with respect to the Nexicon association-in-fact enterprise. First, the City has sufficiently alleged a functioning unit by alleging that Nexicon and American Indian CigCo entered profit sharing and employment agreements and that they have interlocking financial and management agreements. The City further alleged that American Indian CigCo transfers assets from Nexicon to American Indian CigCo in order to hide assets and that American Indian CigCo regularly transfers funds earned from illegal cigarette sales to Nexicon. The relatedness requirement also was met with respect to this enterprise. See United States v. Daidone, 471 F.3d 371, 375 (2d Cir.2006) (per curiam) (citing United States v. Minicone, 960 F.2d 1099, 1106 (2d Cir.), cert denied, 503 U.S. 950, 112 S.Ct. 1511, 117 L.Ed.2d 648 (1992)); see also Satinwood, 385 F.3d at 174. In this regard, the City alleges that defendants' business plans depended on (1) concealing their customers' purchases from state tax authorities; (2) informing their customers that the purchases would be concealed; and (3) concealing purchasers' tax liability from the purchasers themselves. Thus, the relatedness requirement was met because the alleged acts of mail and wire fraud were more than merely related to the activities of the online cigarette sellers; they were essential to defendants' business. Finally, the City also sufficiently alleges the roles that relevant defendants had in operating or managing the Nexicon association-in-fact enterprise. Defendants Nexicon, Richard Urrea and Daniel Urrea are clearly alleged to have participated in management by virtue of their roles in the organizations that make up the enterprise. [31] As the Nexicon association-in-fact enterprise is clearly alleged to be made up of several defendant persons who operated or managed the affairs of the enterprise, the dismissal of this claim must be vacated.