On December 18, 2017, Judge R. Brooke Jackson of the District of Colorado awarded treble damages, attorneys’ fees, pre-judgment interest, and costs to plaintiffs in a nationwide class action alleging violations of the federal Racketeer Influenced and Corrupt Organizations Act (RICO).

The federal district court issued a 21-page opinion granting plaintiffs’ post-trial motions and denying the defendants’ latest efforts to unravel a jury verdict. Judge Jackson awarded treble damages totaling $24,239,101, attorneys’ fees up to one-third of that amount, pre-judgment interest of $737,912, and $33,238 in court costs.

On May 15, 2017, a federal court jury in Denver, returned a verdict for Plaintiffs and a nationwide class of U.S. citizens and borrowers who were victimized by an advance fee loan fraud scheme conceived and carried out by Defendants, Sandy Hutchens, Tanya Hutchens, and Jennifer Hutchens. The case is entitled CGC Holding Co., LLC v. Hutchens, Civil Action No. 11-cv-1012-RBJ-KLM.

After hearing nine days of evidence, the jury found that the Defendants had violated both Section 1962(c) and (d) of RICO, and awarded the Plaintiffs and Class members compensatory damages of $8,421,367. Under RICO, that amount was trebled and, after subtracting approximately $1 million in pretrial settlements with other defendants, the District Court added attorneys’ fees, pre-judgment interest, and costs.

The case was originally filed in 2011. Judge Jackson certified a nationwide class in 2013. Defendants then challenged class certification in the Tenth Circuit Court of Appeals, which affirmed Judge Jackson’s ruling in 2014. The case went through lengthy discovery and pretrial proceedings before trial started on May 1, 2017.

The three Plaintiffs – CGC Holding Co. of Denver, Colorado, James Medick of Las Vegas, Nevada, and Harlem Algonquin LLP of Chicago, Illinois - represented a class of 125 borrowers who were victimized by Sandy Hutchens, a self-styled “mortgage lender” from Toronto, Ontario, who operated through a variety of corporations and used numerous aliases. As part of his advance fee scheme, between 2008 and 2013, he issued loan commitments totaling over $3 billion and collected advance fees from borrowers exceeding $8 million, but never funded a single loan in the U.S. Plaintiffs and Class members alleged that Hutchens misrepresented and omitted material facts, including failing to tell borrowers that he had a criminal record that included convictions for fraud, forgery, and narcotics trafficking.

The jury, which heard testimony from approximately two dozen witnesses over nine days, deliberated for just two hours before returning the verdict in favor of Plaintiffs and Class members.

On September 26, 2017, the court issued a partial Judgment, imposing a constructive trust over properties owned by the defendants. With his latest ruling, Judge Jackson has rejected a series of post-trial motions brought by the defendants and expanded the scope of the constructive trust to encompass more properties owned or controlled by the defendants. Attention is now expected to shift to the Superior Court of Justice in Ontario, where the plaintiffs have commenced a judgment enforcement proceeding.

Plaintiffs and Class members were represented at trial by New Jersey Fellow Kevin P. Roddy of Wilentz, Goldman & Spitzer, P.A. of Woodbridge, NJ, and Scott R. Shepherd of Shepherd Finkelman Miller & Shah LLP of Media, PA.