McDermott Team Secures Dismissal of RICO Claim for Bank in Medical Marijuana Dispute
BOSTON — McDermott Will & Emery secured a voluntary dismissal in a case against a Massachusetts bank sued for providing banking services to a licensed medical marijuana dispensary.
In the fall of 2017, a Boston landlord filed a federal Racketeer Influenced and Corrupt Organizations (RICO) claim against Healthy Pharms Inc. as well as McDermott client Century Bank in the US District Court for the District of Massachusetts. The plaintiff alleged that the bank was part of a conspiracy to grow and distribute marijuana and launder the proceeds in violation of federal law. Century Bank argued that a bank providing ordinary banking services to a properly licensed medical marijuana customer, in compliance with the US Treasury Department Financial Crimes Enforcement Network’s guidance regarding how banks should handle, process and report such transactions, could not be criminally or civilly liable either as a principal or a conspirator in a RICO enterprise. After McDermott filed a motion to dismiss the original complaint, which the plaintiffs subsequently amended, the plaintiffs stipulated to a dismissal with prejudice of all claims against the bank. The dismissal was not the product of any settlement between the plaintiffs and the bank, which continues to assert the legality and propriety of its business practices.
The case is Crimson Galeria Limited Partnership v. Healthy Pharms, Inc. et al.
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