Once again HSBC's acquisition of troubled predatory lender Household International in 2002 is causing problems for HSBC.
Consumer Watchdog Organization HSBC Watch, formally Household Watch, informed news services in the United Kingdom of another article about HSBC's troubled lender Household International.
This time it is a Racketeering, Influence and Corruption suit (RICO)
The article entitled "Mortgage borrowers file RICO lawsuit" first appeared in the Nashville Tennessean on October 25, 2004. It is found here:
It is not the first time Household International has been sued under United States RICO charges, but it may be the first time HSBC must take such actions seriously. More RICO charges might be forthcoming as the American consumer realizes the intentional harm done by Household
- HSBC's credit card processing subsidiary, Retail Services, as evidenced by Shea vs Household.
Sec. 1962© of RICO, the section most frequently used to bring civil RICO actions, makes it a crime to conduct or to participate in the conduct of the affairs of an enterprise through a pattern of racketeering activity. The RICO statute lists certain state and Federal crimes as the type of racketeering activity that may form the required pattern for a RICO violation.
Because the racketeering activity can include such broad offenses as mail fraud, wire fraud, certain securities laws' violations, and interstate transportation of stolen property and funds, a large variety of purported acts of fraud can be brought within the RICO statute.
Other sections of the RICO statute make it a crime to invest the proceeds of a pattern of racketeering activity in an enterprise, or to acquire an interest in an enterprise through a pattern of racketeering activity, or to conspire to violate any of RICO's provisions.
U.S. tax preparer H&R Block and HSBC subsidiary Beneficial Finance were also charged under RICO recently.
In ruling on the RICO claims, the court held that the complaint adequately pled that the H&R Block and Beneficial defendants "operated a scheme to defraud customers, distinct from the other ordinary business dealings each conducted, whereby Block would attract and mislead customers into purchasing extremely expensive loans from Beneficial in exchange for a cut of the profits."
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