Court Opinion

ID: 9957723
Source: CourtListenerOpinion
Date Created: 2024-04-05 00:00:59.750646+00
Date Added: 2024-06-11T08:18:35.085787
License: Public Domain

Case: 22-11148    Document: 116-1        Page: 1   Date Filed: 04/04/2024

       United States Court of Appeals                             United States Court of Appeals

            for the Fifth Circuit                                          Fifth Circuit

                                                                         FILED
                          ____________                                April 4, 2024
                                                                    Lyle W. Cayce
                            No. 22-11148
                                                                         Clerk
                          ____________

D&T Partners, L.L.C., successor in interest to ACET Venture
Partners, directly and derivatively on behalf of ACET Global, L.L.C.
and Baymark ACET Holdco, L.L.C.; ACET Global, L.L.C.,

                                                    Plaintiffs—Appellants,

                                versus

Baymark Partners Management, L.L.C.; Super G Capital,
L.L.C.; SG Credit Partners, Incorporated; Baymark
ACET Holdco, L.L.C.; Baymark ACET Direct Invest,
L.L.C.; Baymark Partners; David Hook; Tony Ludlow;
Matthew Denegre; William Szeto; Marc Cole; Steven
Bellah; Zhexian “Jane” Lin; Dana Marie Tomerlin;
Padasamai Vattana; Paula Ketter; Vanessa Torres;
Windspeed Trading, L.L.C.; Julie Smith; Hallet &
Perrin, PC; Baymark Management, L.L.C.,

                                      Defendants—Appellees.
             ______________________________

             Appeal from the United States District Court
                 for the Northern District of Texas
                       USDC No. 3:21-CV-1171
             ______________________________

Before Jones, Haynes, and Douglas, Circuit Judges.
Dana M. Douglas, Circuit Judge:
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                                 No. 22-11148

        A group of individuals allegedly sought to steal the assets and trade
secrets of an e-commerce company. They did so with shell entities, corrupt
lending practices, and a fraudulent bankruptcy. The question in this case is
whether the scheme, as alleged, violates the Racketeer Influenced and
Corrupt Organizations Act (RICO). We hold that it does not. While the
complaint alleges coordinated theft, the alleged victims are limited in
number, and the scope and nature of the scheme was finite and focused on a
singular objective. Because this does not constitute a “pattern” of
racketeering conduct sufficient to state a RICO claim, we AFFIRM the
district court’s judgment.
                                      I
       D&T Partners, LLC (D&T) operated a successful company that
specialized in online retail. Perhaps encouraged by D&T’s success, another
company, Baymark Partners (Baymark), approached D&T with a proposition
it could not refuse: Baymark sought to purchase D&T’s assets in exchange
for a sum of money and multimillion-dollar promissory note. To effectuate
the sale, Baymark created a new company, ACET Global (Global), to take
the operational reins from D&T, hold the transferred assets, and pay the
substantial promissory note.
       Following the sale from D&T, Global took out a separate term loan
from another entity, Super G3 (Super). D&T agreed to subordinate its
security interest to Super as part of that transaction. It did so after Baymark
insisted that D&T’s former management would remain at the helm of Global.
       But less than a year after the sale, things began unraveling. Baymark
reneged on its assurances to D&T and replaced Global’s CEO with an alleged
crony, who accepted the new role free of charge. According to the complaint,
this new executive caused Global to default on its payment to Super and enter
a forbearance agreement, waiving loan payments until just days before the
D&T promissory note would become due. In the meantime, the same CEO

                                      2
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                                No. 22-11148

created another company named “Windspeed”—an entity in which
Baymark and Super both had an ownership interest.
       After Windspeed’s creation, next began the “critical steps of Global’s
‘wind down’ plan.” The scheme involved transferring Global’s assets,
operations, inventory, customer lists, marketplaces, and employees to
Windspeed. Super, for its part, gave this new assetless entity $200,000 with
the expectation that Windspeed would eventually acquire Global’s assets.
       Problems only compounded for Global. When the forbearance period
with Super ended, Global defaulted on the loan. It then defaulted on the
promissory note payment due to D&T. Purporting to respond to the
nonpayment, Super issued a faux notice of forfeiture to take possession of
Global’s assets. There was, however, a problem: D&T no longer had
anything to foreclose on after the transfers to Windspeed. Making matters
worse, the same law firm—Hallett & Perrin—authored Windspeed’s
company agreement, discussed the fraudulent asset transfer with Baymark,
drafted the foreclosure sale agreement for Super, and represented Baymark,
Global, and Windspeed during the foreclosure sale.
       Global declared bankruptcy shortly after the default. In doing so, it
filed a petition in bankruptcy court with several misrepresentations.
Numbered among them, Global representatives distorted the value of its
assets and lied about its finances. When interested parties got wind of these
problems, Defendants undertook an extensive cover-up. Emails and
electronic documents went missing, and websites and other online traces
mysteriously vanished from the internet. According to the complaint,
Defendants destroyed evidence, obstructed legal proceedings, and
contradicted their own testimony.

                                      3
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                                      No. 22-11148

       Citing Defendants’1 nefarious scheme to loot Global’s assets, D&T
filed suit in federal court under RICO. After two amendments,2 D&T’s
complaint spans 194 pages and alleges various unlawful racketeering acts,
including wire fraud, mail fraud, obstruction of justice, bankruptcy fraud, and
money laundering. Such conduct, according to D&T, resulted in several
millions of dollars in unpaid debts due to D&T and other creditors. After
D&T filed its second amended complaint, Defendants moved to dismiss the
lawsuit, arguing that D&T failed to state a RICO claim. The district court
agreed and dismissed all D&T’s claims with prejudice, concluding that D&T
was unable to plead a pattern of racketeering activity.3 D&T says that the
court’s holding was in error and timely appealed.4
                                            II
        We review dismissal for failure to state a claim de novo. In re Life
Partners Holdings, Inc., 926 F.3d 103, 116 (5th Cir. 2019). In doing so, we
accept all well pled facts as true and determine whether plaintiff’s complaint
states a plausible claim for relief. Id.

        _____________________
        1
          The complaint lists several Defendants. Defendant–Appellees filed two separate
briefs. One brief was filed on behalf of Marc Cole and SG Credit Partners, Inc. Defendants–
Appellees Baymark Partners Management, L.L.C., Baymark ACET Holdco, L.L.C.,
Baymark ACET Direct Invest, L.LC., Baymark Partners, David Hook, Tony Ludlow,
Matthew Denegre, and Baymark Management, L.L.C., and Julie Smith and Hallett &
Perrin, P.C., filed a separate brief.
        2
       The district court granted Defendants’ first rounds of motions to dismiss but gave
D&T the opportunity to amend its complaint.
        3
         The district court dismissed as moot the motions to dismiss filed by the law firm,
Hallett & Perrin, Julie Smith, the Windspeed Employees, Windspeed, and William Szeto.
        4
          Several weeks before oral argument, several parties to this appeal were involved
in bench trial in a Texas state district court. Following oral argument, the district court
issued a ruling finding several Defendants liable for, among other claims, breach of
contract, breach of fiduciary duty, and violations for the Texas Uniform Fraudulent
Transfer Act.

                                            4
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                                   No. 22-11148

                                        A
        To eradicate “organized crime in the United States,” Congress
passed the Racketeer Influenced and Corrupt Organizations Act, a legislative
package that provided the government “new weapons of unprecedented
scope” targeting organized crime at “its economic roots.” Russello v. United
States, 464 U.S. 16, 26 (1983). Among the new tools for prosecutors, RICO
established innovative evidence-gathering procedures, created criminal
prohibitions, and provided enhanced sanctions and remedies for victims.
United States v. Turkette, 452 U.S. 576, 589 (1981). Putting its provisions to
use, the government has employed RICO to take down leaders from
notorious crime outfits across the country. But even while “[o]rganized
crime was without a doubt Congress’ major target,” H.J. Inc. v. Nw. Bell Tel.
Co., 492 U.S. 229, 245 (1989), RICO’s central aim is prohibiting “patterns”
of crimes conducted through an “enterprise,” no matter where or how such
patterns occur.
        RICO is also more than a criminal statute. When drafting the
legislation, Congress incorporated provisions in RICO that allow private
plaintiffs to seek redress in federal court. If their lawsuit succeeds, the statute
provides a big payout: Plaintiffs are entitled to triple damages, court costs,
and attorney’s fees. 18 U.S.C. § 1964(c). Even so, pursuing that recovery is
often a challenging undertaking. Problems typically arise at the pleadings
stage, as courts are hesitant to find RICO violations, and plaintiffs have
difficulty alleging them. See Vicom, Inc. v. Harbridge Merch. Servs., Inc., 20
F.3d 771, 785 (7th Cir. 1994) (Cudahy, J., concurring) (“RICO is a judge’s
nightmare and doggedly persistent efforts to hammer it into a rational shape
deserve the utmost respect even though they can rarely accomplish the
impossible.”). The root of the trouble stems from the statute’s vague
language. As explained in more detail below, the requisite RICO pleading
standards are far from explicit, and the RICO jurisprudence offers courts
(and plaintiffs) little guidance. See H.J. Inc., 492 U.S. at 256 (Scalia, J.,

                                        5
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                                     No. 22-11148

dissenting) (“[T]he highest Court in the land has been unable to derive from
this statute anything more than . . . meager guidance.”).
                                          B
       By its terms, RICO 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.” 18 U.S.C. § 1962(c).
        Pointing to that language, D&T believes Defendants’ actions fall
“squarely within RICO’s crosshairs.” Over four years, D&T says
Defendants engaged in a “series of elaborate, sophisticated, and coordinated
acts of deception” with one mission in mind: “fraudulently siphon [Global’s]
trade secrets and assets for its own benefit, transfer those assets from the
reach of creditors and hide and conceal their conduct.” Such a scheme, D&T
alleges, caused harm to more than twenty-four RICO victims, including the
bankruptcy trustee and Global’s creditors.
        In pursuing this action, D&T brings claims under three subsections of
the RICO statute. See id. §§ 1962 (a), (c) & (d).5 Though the subsections are
distinct, each shares three common elements: “(1) a person who engages in
(2) a pattern of racketeering activity, (3) connected to the acquisition,
establishment, conduct, or control of an enterprise.” Abraham v. Singh, 480
F.3d 351, 355 (5th Cir. 2007) (quoting Word of Faith World Outreach Ctr.
Church, Inc. v. Sawyer, 90 F.3d 118, 122 (5th Cir. 1996)).
      The crux of this case involves element two—whether Defendants
engaged in a “pattern of racketeering activity.” A pattern, according to

       _____________________
       5
         The claims under subsections (c) and (d) are against all Defendants, while the
claim under subsection (a) is against Baymark Partners, Ludlow, Hook, Denegre, Super G,
SG Credit, BP Management, Smith, and Hallett & Perrin. Because these claims have the
same elements, we analyze them together.

                                          6
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                                 No. 22-11148

RICO, requires at least two predicate criminal actions. 18 U.S.C. § 1961. But
that is where the statute’s guidance ends. Even so, it is well established that
the word “‘pattern’ . . . was meant to import,” H.J. Inc., 492 U.S. at 255
(Scalia, J., dissenting), something more than simply “[e]stablishing the
minimum number of predicates.” Tel-Phonic Servs., Inc. v. TBS Int’l, Inc., 975
F.2d 1134, 1140 (5th Cir. 1992). Yet determining what that “something” is
“has proved to be no easy task.” H.J. Inc., 492 U.S. at 236. In attempting to
fill the void, the Supreme Court has offered some contour: “To establish
th[e] pattern [element,] a plaintiff must show both a relationship between the
predicate offenses . . . and the threat of continuing activity.” Malvino v.
Delluniversita, 840 F.3d 223, 231 (5th Cir. 2016). These two elements are
termed “relationship” and “continuity.”
       Predicate acts are “related” if they “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.” H.J. Inc., 492 U.S. at 240 (citation omitted). “Continuity,”
by comparison, is a “temporal concept.” Id. In noting Congress’s goal of
addressing “continuing racketeering activity,” the Court offered a framework
for putting the “continuity” principle into practice: A RICO plaintiff can
prove “continuity” by alleging “a closed period of repeated conduct,” or
“past conduct that by its nature projects into the future with a threat of
repetition.” Id. at 241. Respectively, these precepts are known as “closed”
and “open-ended” continuity. In utilizing this amorphous framework,
however, the Supreme Court directed judges to employ a “commonsense
approach” and consider the specific facts of each case. Id. at 237.
       Though no one contests the “relationship element” of the pattern
analysis, the parties here dispute whether D&T’s complaint alleges closed or
open-ended continuity. We address each theory in turn.

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                                              1
       To start, a party can demonstrate continuity over a closed period by
alleging a series of related criminal acts extending over a “substantial period
of time.” Id. at 242. In pursuing this particular RICO theory, D&T says that
Defendants engaged in a scheme involving several acts of deception over four
years. D&T outlines over 100 predicate acts in its amended complaint,
including mail and wire fraud, obstruction of justice, money laundering, and
bankruptcy fraud.6 D&T believes that allegations of such acts carried out over
multiple years are sufficient to survive the pleading stage.
       But pleading continuity is not as straightforward as D&T seems to
suggest. Because continuity depends on the specific facts of each situation,
no one test can be fixed “in advance with such clarity that it will always be
apparent whether in a particular case a ‘pattern of racketeering activity’
exists.” Id. at 243. While other circuits have considered an explicit range of
factors, we have engaged in highly fact-intensive analyses to determine
whether closed-ended continuity was present in any given case.
       Even without specific factors, however, several recurrent principles
have emerged. Perhaps unsurprisingly, one crucial consideration in the
closed-ended continuity analysis is the duration of the alleged racketeering
scheme. When drafting RICO, Congress sought to address “long-term
unlawful conduct,” not fraudulent acts “extending over a few weeks or
months.” Id. at 242. But what timeframe is prolonged enough to be
considered “long-term”? For our part, we have presumed that more than a
year of racketeering acts constitute a “substantial period of time.” See, e.g.,
Abraham, 480 F.3d at 356 (holding that two years was sufficient); United
States v. Bustamante, 45 F.3d 933, 941–42 (5th Cir. 1995) (holding that
racketeering acts extending nearly four years suffice).

        _____________________
        6
         For purposes of this analysis, we conclude that at least two of the nearly 100 alleged
predicate acts meet the plausibility standard. See 18 U.S.C. § 1961.

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       In this case, D&T’s complaint alleges racketeering conduct occurring
over “four years.” Taking those allegations as true, we presume that such a
period is “substantial” for RICO purposes. Affording D&T this
presumption, however, does not end the inquiry, for the duration of the
alleged unlawful conduct is not a dispositive factor. See H.J. Inc., 492 U.S.
at 242. Though it certainly carries significant weight, we have, on several
occasions, considered other facts when engaging in the RICO pattern
analysis.
        One consideration, for instance, is the number of victims injured by
the alleged racketeering acts. Our opinion in Abraham v. Singh, 480 F.3d
at 356, offers one example. In that case, we found continuity when an alleged
racketeering scheme involved “systematic victimization.” Id. The complaint
alleged a two-year scheme to induce hundreds of Indian citizens to borrow
money and travel to the United States for employment, only to find on arrival
“things were not as they had been promised.” Id. Specifically, the transplants
were housed in poor conditions and unable to find jobs, or alternatively,
“farmed out” for inadequate pay. In finding continuity, we stressed the
plan’s effect on “multiple victims,” and concluded that the plaintiffs’
complaint alleged “a continuity of racketeering activity, or its threat.” Id.
(quoting H.J. Inc., 492 U.S. at 356); see also Malvino, 840 F.3d at 232 (noting
the extent of the affected victims).
       By contrast, we—and our sister circuits—have been skeptical of
RICO allegations when the victims of the alleged racketeering conduct are
limited. See W. Assocs. Ltd. P’ship, ex rel. Ave. Assocs. Ltd. v. Mkt. Square
Assocs., 235 F.3d 629, 635 (D.C. Cir. 2001); see also Wade v. Hopper, 993 F.2d
1246, 1251 (7th Cir. 1993) (“While the absence of multiple schemes or
victims is not dispositive, it is instructive.”); Efron v. Embassy Suites, Inc.,
223 F.3d 12, 19 (1st Cir. 2000) (concluding plaintiff failed to plead closed-
ended continuity in part because of the limited number of victims). This is
because the idea of “continuity” embraces “predicate acts occurring at
different points in time or involving different victims.” Morgan v. Bank of

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Waukegan, 804 F.2d 970, 975 (7th Cir. 1986). Though by no means
conclusive, courts (including this one) have found the absence of multiple
targeted victims relevant to the continuity inquiry. See, e.g., Malvino, 840
F.3d at 233 (considering evidence of “other victims” under the RICO
pattern analysis); see also Home Orthopedics Corp. v. Rodriguez, 781 F.3d 521,
530 (1st Cir. 2015) (considering number of victims); Grubbs v. Sheakley Grp.,
807 F.3d 785, 804 (6th Cir. 2015) (same); Edmondson & Gallagher v. Alban
Towers Tenants Ass’n, 48 F.3d 1260, 1265 (D.C. Cir. 1995) (same); Vicom, 20
F.3d at 780 (same).
       Here, D&T contends that Defendants’ fraudulent scheme “duped”
twenty-four victims in its effort to steal Global’s assets. Notably, however,
the complaint does not allege that the victims were targeted repeatedly
through broad-based criminal conduct. Instead, the alleged victims suffered
a derivative injury stemming from Global, who was the only targeted victim
of the underlying transaction. D&T implies as much in its second amended
complaint: It recounts that the objective of Defendants’ unlawful acts was to
“siphon off [] Global’s trade secrets and assets.” Such a circumstance
weighs against a finding of continuity. Unlike the “systematic
victimization,” discussed in Abraham, D&T and other creditors shared in a
lone injury from a lone operation directed at a lone victim. W. Assocs., 235
F.3d at 635 (“To the extent that Western’s partners were injured, they were
injured indirectly, which does not make them individual victims under
RICO.”).
        Apart from the duration and the number of victims, another helpful
consideration is whether the unlawful conduct concerns one or multiple
schemes. If numerous schemes are alleged, such allegations are “highly
relevant” to the continuity inquiry and tend to support such a finding. H.J.
Inc., 492 U.S. at 240. On the other hand, courts are reluctant to find a RICO
violation when the complaint alleges unlawful conduct in pursuit of a “single
effort, over a finite period of time.” Efron, 223 F.3d at 21. To be clear, a viable
RICO case need not involve multiple schemes. H.J. Inc., 492 U.S. at 237.

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Nevertheless, courts have stressed that “a single scheme to accomplish ‘one
discrete goal,’ directed at one individual with no potential to extend to other
persons or entities” is not the type of racketeering “pattern” RICO seeks to
prohibit. See SIL-FLO, Inc. v. SFHC, Inc., 917 F.2d 1507, 1516 (10th Cir.
1990); see also Efron, 223 F.3d at 19 (“Our own precedent firmly rejects
RICO liability where “the alleged racketeering acts . . ., ‘taken
together, . . . comprise a single effort’ to facilitate a single financial
endeavor.” (quoting Schultz v. Rhode Island Hosp. Tr. Nat. Bank, N.A., 94
F.3d 721, 732 (1st Cir. 1996))).
        For our part, we have found that no RICO liability exists when a
plaintiff alleges “multiple acts of fraud that were part and parcel of a single,
discrete and otherwise lawful commercial transaction.” Word of Faith, 90
F.3d at 123; see Delta Truck & Tractor, Inc. v. J.I. Case Co., 855 F.2d 241, 244
(5th Cir. 1988). This principle was made explicit in Word of Faith World
Outreach Center Church, Inc. v. Sawyer, 90 F.3d at 123. There, the plaintiffs
asserted RICO claims based on a network’s critical investigation report of
three televangelists. The racketeering acts alleged by the plaintiffs included
“interstate transportation of stolen computer disks,” “theft of donations,
Church mail, and other Church property,” “wire fraud,” and “obstruction
of justice.” Id. at 121. Despite these allegations, we concluded that plaintiffs
“failed to plead a ‘continuity of racketeering activity or its threat.’” Id. at 123
(quoting H.J. Inc., 492 U.S. at 241). In so holding, we reasoned that the
alleged fraudulent acts were components of a broader plan with one single
objective: producing “television news reports concerning a particular
subject.” Id. And such a “discrete,” otherwise lawful endeavor posed no
threat of “continuous activity” and was therefore insufficient for RICO
purposes.
       Relatedly, we have also examined the alleged objective of the scheme
and whether its goals were finite. Consider our ruling in Delta Truck &
Tractor, Inc. v. J.I. Case Co., 855 F.2d at 244. In that case, several plaintiffs
accused an equipment dealer of numerous RICO violations concerning the

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acquisition of certain dealerships. The district court dismissed the complaint
and we affirmed. In doing so, we concluded that the conduct did not
constitute a RICO “pattern,” in part, because the scheme came to its logical
conclusion, and as a result, Defendants could not have posed a “continuous
threat as RICO persons.” Id.; see also In re Burzynski, 989 F.2d 733, 743 (5th
Cir. 1993) (“All of the alleged predicate acts took place as part of the
Burzynski I litigation, which has ended.”).
        Although D&T’s complaint here cites several instances of fraud, the
nature and singular objective of the underlying transaction do not support a
finding of closed-ended continuity. This is because the unlawful actions all
related to a single scheme targeted at Global. By D&T’s own admission, that
finite scheme achieved its goal once Defendants transferred Global’s assets
to Windspeed Trading, LLC. Additionally, Defendants’ criminal
undertaking was part and parcel of an otherwise lawful commercial
endeavor—that is, a loan default and its resulting foreclosure. See Word of
Faith, 90 F.3d at 123. Though D&T has deconstructed several acts of fraud
throughout the transaction, doing so was “a transparent effort to make
[Defendants’] alleged fraudulent conduct seem more expansive.” See W.
Assocs., 235 F.3d at 635.
        D&T nevertheless counters that the Defendants’ unlawful actions did
not end with the transfer. It emphasizes that Defendants sought to “cover
up” their conduct by lying at depositions and deleting virtual files relevant to
their liability. Yet the complaint only claims that Defendants were attempting
to conceal the fraudulent predicates of their criminal undertaking. And such
actions, “even if themselves illegal . . . ‘do nothing to extend the duration of
the underlying scheme.’” Jennings v. Auto Meter Prod., Inc., 495 F.3d 466,
474 (7th Cir. 2007) (quoting Midwest Grinding Co. v. Spitz, 976 F.2d 1016,
1024 (7th Cir. 1992)).
       Simply put, what began as an ordinary business transaction ended with
stolen assets, a defunct company, and many unhappy creditors. Even if
Defendants engaged in fraudulent acts in the interim, the complaint alleges

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that the acts arose in pursuit of a single end: transferring Global’s assets to
Windspeed. While the plan ultimately took several years to realize, the
number of victims and the nature and objective of the alleged scheme do not
support an inference of a closed-ended pattern of racketeering activity. On
this basis, we must affirm the district court’s ruling.
                                       2
        Without a closed-ended pattern, a plaintiff may nevertheless state a
RICO claim by alleging “open-ended” continuity. This exists when a threat
of continuing criminal activity extends indefinitely into the future. To
establish this element, plaintiffs must show that the predicate acts “are a
regular way of conducting defendant’s ongoing legitimate business . . . or of
conducting or participating in an ongoing and legitimate RICO
‘enterprise.’” H.J. Inc., 492 U.S. at 243. In alleging an open-ended
continuity theory here, D&T contends that Defendants’ scheme to drain
Global dry was not an isolated occurrence. It claims that Defendants engaged
in similar schemes to advance a modus operandi: illegally acquiring
significant equity stakes in companies for very little, or no, capital outlay.
        Whether a plaintiff has alleged an open-ended pattern of continuity
turns on whether the predicate acts themselves pose a “threat of continuity.”
Id. at 241. An open-ended pattern may exist when the predicates “involve a
distinct threat of long-term racketeering activity, either implicit or explicit.”
Id. at 242. To illustrate this point, the Supreme Court offered a hypothetical
where a “hoodlum” extorted money from business owners, telling the
businesses he would reappear each month to collect premiums that insured
against window breakage. Even though these predicate acts were small and
occurred close together, the Court reasoned that in time, the racketeering
acts themselves had the threat of repetition extending indefinitely into the
future. Id. at 242–43.
      Pleading an identical or analogous fact pattern, however, is not the
sole way to establish an indefinite threat of RICO activity. A plaintiff can

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also prove open-ended continuity by establishing that a defendant commits
the predicate acts or offenses as its “regular way of doing business.” Id.
at 242. This may be done by showing that the entity repeats its fraud in
similar business settings or would employ the underlying fraud against
Defendants indefinitely. See Efron, 223 F.3d at 19.
        D&T cites two other lawsuits against Defendants to show open-ended
continuity here. These lawsuits, D&T asserts, support its theory that the
scheme Defendants committed was all part of their ongoing fraudulent
enterprise targeting select companies. The lawsuit D&T claims is most
“strikingly similar” to the case at hand involved a borrower that had
defaulted on multiple notes. Greb v. Singleton, No. 3:18-CV-01439, 2019 WL
13210371, at *1 (N.D. Tex. Sept. 30, 2019). The creditor there sought
foreclosure on the properties pledged as collateral. The borrower countered
that the creditor had inflated the amount owed and was seeking millions more
than it could get by simply collecting on the loans. Id. Despite seeking
alternative financing and buyers, the borrower ultimately agreed to sell his
interest to Baymark. Id. at *2. At the time of the sale, however, the borrower
was unaware that the creditor and Baymark struck a deal where the creditor
would advance Baymark the funds to purchase the borrower’s interest, and
the creditor would take an interest in the profits of any resale. Id. A short time
later, Baymark resold the entity for more than double what it had paid the
borrower. Id. The borrower sued, alleging violations under the RICO
statute.
       That case was dismissed at the pleadings stage, and in D&T’s 194-
page complaint, it hardly describes the alleged similarities or underlying
predicate acts that resemble D&T’s allegations.7 The other RICO lawsuit

       _____________________
       7
          In its brief, D&T raises another case involving Super, not included in its
complaint. But we will not address the new unpled facts, as appellate courts may not
consider new evidence furnished for the first time on appeal and may not consider facts

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                                       No. 22-11148

D&T cites was based on “healthcare fraud”—an issue wholly unrelated to
the claims in this complaint. In any event, the complaint again provides
limited facts. As we have recognized, “[p]leading the mere existence of
lawsuits is not the same as pleading the facts that demonstrate predicate
illegal acts as the defendant’s regular way of doing business.” Word of Faith,
90 F.3d at 124.
        Above all, D&T has not alleged how Defendants’ criminal activity
would continue in the future. As noted above, Defendants’ scheme was finite
and reached its “natural conclusion” once it drained Global’s assets. And
because Global “became economically defunct” once its assets were
“siphon[ed] off,” there was nothing more for the Defendants to loot. GICC
Cap. Corp. v. Tech. Fin. Grp., 67 F.3d 463, 466 (2d Cir. 1995) (“It defies logic
to suggest that a threat of continued looting activity exists when, as plaintiff
admits, there is nothing left to loot.”). Though D&T contends that
Defendants seek new fraudulent acquisition opportunities, D&T has not
identified any other target companies. At best, there is the allegation that
Defendants may, at some point, foreclose on collateral again in another
transaction. But absent additional facts, the complaint does not plead a threat
of future criminal conduct. That reality also requires that we affirm the
district court’s ruling.
                                            III
       Finally, D&T contends that the district court erred in dismissing the
complaint without granting leave to amend. We review “the district court’s
decision to grant a motion to dismiss with or without prejudice only for abuse
of discretion.” Club Retro, L.L.C. v. Hilton, 568 F.3d 181, 215 n.34 (5th Cir.
2009). D&T’s claim is meritless for a least two reasons. For one thing,

        _____________________
which were not before the district court at the time of the challenged ruling. See Theriot v.
Par. of Jefferson, 185 F.3d 477, 491 n.26 (5th Cir. 1999).

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                                  No. 22-11148

D&T’s argument is based on the general principle that leave to amend should
be “freely given.” Fed. R. Civ. P. 15(a)(2). But no mention is made of the
district court’s several reasons for dismissing D&T’s complaint with
prejudice. In relevant part, the district court concluded that doing so was
“appropriate in this case” because,
       Plaintiffs’ Second Amended Complaint [was] their third bite at
       the apple and the second time the Court [had] assessed the
       sufficiency of their allegations. Moreover, Plaintiffs [] opted for
       volume over clarity in their amendments by adding more to the
       complaint—including, at times, full pages of deposition
       transcripts—without establishing how the facts fit into their
       RICO claims. More importantly, the Court [found] that given
       the nature of Plaintiffs’ allegations, further attempts to replead
       the singular transaction at issue as a “pattern of racketeering”
       would be futile and a waste of the parties’ and Court’s
       resources.
       “A party forfeits an argument . . . by failing to adequately brief the
argument on appeal.” Rollins v. Home Depot USA, 8 F.4th 393, 397 (5th Cir.
2021). “To be adequate, a brief must address the district court’s analysis and
explain how it erred.” Guillot ex rel. T.A.G. v. Russell, 59 F.4th 743, 751 (5th
Cir. 2023) (citation omitted). Because D&T does not address the district
courts stated reasons for dismissal, it forfeits any argument that the district
court abused its discretion. Id.
        And even if its argument was not waived, D&T had no right to amend
its complaint for a third time. This is particularly so after the court cautioned
D&T that, after the first amendment, it had “one chance” to rectify its
deficient pleadings. “[L]eave to amend properly may be denied when the
party seeking leave has repeatedly failed to cure deficiencies by amendments
previously allowed and when amendment would be futile.” U.S. ex rel.
Willard v. Humana Health Plan of Tex. Inc., 336 F.3d 375, 387 (5th Cir. 2003).
Having made such an express finding in the record, the district court did not
err in concluding that an amendment would be futile.

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                               No. 22-11148

                                   IV
       For the reasons above, we AFFIRM the district court’s ruling in all
respects.

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