City of New York v. CitiSource, Inc.

The City of New York (the City) (plaintiff) sued CitiSource, Inc. (CitiSource), Stanley Friedman, and Marvin Kaplan (defendants) under the Racketeer Influenced and Corrupt Organizations Act (RICO) for bribing two city officials to procure a city contract. Friedman and Kaplan were also criminally prosecuted by the federal government. On November 25, 1986, Friedman and Kaplan were found guilty by a federal jury of bribing the city officials with shares of CitiSource stock to influence the award of a $22.7 million municipal contract. The State of New York also sought to prosecute Friedman and Kaplan for the fraudulent procurement of the government contract. The Manhattan District Attorney obtained orders of attachment against certain bank accounts owned by Friedman, Kaplan, and a retirement trust in a related civil forfeiture action. The New York Court of Appeals ruled that the state prosecution was barred by double jeopardy and vacated the attachments. Just before the attachments were vacated, Friedman called his bank to inquire about the process to withdraw his funds. Kaplan attempted to have funds transferred from the retirement trust account into his name immediately after the District Attorney obtained an order of attachment against his other property. The City then moved to attach the bank accounts as part of this civil RICO action. The trial court initially granted a temporary restraining order and then denied the motion after consideration. The City moved the trial court to reconsider.