How to freeze assets

Originally published by David Coale.

Plaintiffs obtained a preliminary injunction freezing many of the Defendants’ assets. The Fifth Circuit affirmed, noting the strong proof on two key topics.  As to likelihood of success on RICO and fraud claims: “The [district[ court examined in detail three representative transactions, tracing funds from [Plaintiff] that were intended for legitimate vendors but ended up in accounts owned wholly by the defendants. In each case, [Plaintiff] netted less money than it should have, with the profit going to [Defendant] or his associates.”  As to irreparable injury: “[Defendant] had already closed personal and corporate accounts in Hong Kong, containing exclusively money diverted from [Plainitff], transferring some of the funds to his father-in-law. [Defendant] also has international ties, including the co-defendants – natural persons and shell companies alike – who have yet to appear in court. He has experience and sophistication transferring money internationally, suggesting a high risk that funds allegedly belonging to plaintiffs could disappear.”  ATN Indus. v. Gross, No. 15-20102 (Dec. 7, 2015, unpublished).

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