Andersen Worldwide Faces $350 Million RICO Action
Troubles continue to plague Arthur Andersen Worldwide, the global umbrella company that oversees worldwide operations of the Andersen firms, including Arthur Andersen LLP, U.S. The global firm settled a lawsuit for $60 million earlier this week relating to its role in the botched Enron audit performed by the U.S. firm. Now the worldwide firm is being sued in the U.S. District Court for the Southern District of New York for the role of Andersen accountants in the takeover operation of the Brazilian bank, Banco Excel Economico SA.
The suit alleges that Andersen auditors worked with Banco Bilboa Viscaya Argentaria S/A in the bank's attempt to acquire Excel and in so doing conspired to undervalue the Brazilian bank so that it could be acquired at a bargain price. After the acquisition, Andersen employees took management positions in the Brazilian bank and revalued the bank at a substantially higher amount without providing any additional compensation to shareholders.
The lawsuit is being characterized as a RICO (Racketeer Influenced and Corrupt Organizations) action and is thought to be the first ever such action filed against Andersen Worldwide.
The lawsuit seeks damages of at least $350 million as well as triple damages for the fraudulent action of taking control of the bank away from the shareholders.