Cash advance
Otto Candies, LLC v. Citigroup Inc.
Date: Jan. 12, 2026
Issue: Whether the U.S. Supreme Court should examine an Eleventh Circuit decision that revived a lawsuit accusing Citigroup of operating a cash-advance fraud scheme.
Case Summary: The U.S. Supreme Court declined to review an Eleventh Circuit decision that revived a lawsuit alleging Citigroup operated a cash-advance fraud scheme.
In 2016, 39 vendors, creditors, and bondholders (Plaintiffs) sued Citigroup in the Southern District of Florida, alleging it ran a cash advance fraud scheme involving the now-defunct Mexican oil and gas company Oceanografía S.A. de C.V. (OSA). Plaintiffs claimed Citigroup’s U.S.-based Institutional Clients Group advanced over $1 billion to OSA, based on the company’s contract with Mexico’s state-owned oil firm, Pemex. According to Plaintiffs, Citigroup collected tens of millions in interest by withholding a portion of Pemex’s payments and continued issuing advances after learning they were allegedly based on forged documents. Plaintiffs alleged Citigroup conspired with OSA to inflate the company’s profits and boost its own interest revenue.
In 2018, the district court granted Citigroup’s motion to dismiss based on forum non conveniens, finding that another court would better serve the parties and the interests of justice. The Eleventh Circuit reversed and remanded, holding that the district court failed to properly defer to Plaintiffs’ choice of forum. After amending their complaint, the district court dismissed again, concluding the amended complaint was an “impermissible shotgun pleading” that failed to meet the heightened standard for alleging fraud. In 2022, Plaintiffs filed a third amended complaint, asserting claims of aiding and abetting, violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), and vicarious liability. The district court again dismissed the case for failure to state a claim.
On May 8, 2025, a unanimous Eleventh Circuit panel reversed. The panel reversed the district court’s dismissal of multiple claims against Citigroup, concluding that plaintiffs plausibly alleged aiding-and-abetting fraud, RICO violations, and related common-law claims. The panel determined that the complaint adequately alleged Citigroup’s knowledge of and substantial assistance in OSA’s fraud, a RICO enterprise that carried out a years-long wire-fraud scheme, and a continuous racketeering pattern from 2008 to 2014, while also satisfying Rule 9(b) of the Federal Rules of Civil Procedure’s heightened pleading standard and rejecting arguments that securities laws barred the claims.
In its petition, Citigroup argued the panel’s decision was wrong because the Private Securities Litigation Reform Act (PSLRA) focuses on conduct, not plaintiffs. Congress, through the PSLRA, barred plaintiffs from bringing RICO claims based on conduct already covered by the federal securities laws. Citigroup emphasized that the PSLRA provides that “no person may rely upon any conduct that would have been actionable as fraud in the purchase or sale of securities” to establish a RICO violation. In Citigroup’s view, the alleged conduct fell squarely within this broad prohibition. Citigroup further argued that because the same conduct would have been actionable as securities fraud, plaintiffs could not rely on it to plead a RICO violation. Finally, Citigroup contended that the panel erred in concluding that the PSLRA does not apply to private individuals who merely “hold” securities, a distinction Citigroup argued lacks merit. Citigroup also noted that the panel’s decision creates at least a 3-1 circuit split. However, the Court declined to review without providing any additional commentary.
Bottom Line: By declining review, the U.S. Supreme Court left in place an Eleventh Circuit decision allowing plaintiffs’ fraud, RICO, conspiracy, and vicarious-liability claims against Citigroup over an alleged cash-advance fraud scheme to proceed, rejecting Citigroup’s PSLRA and circuit-split arguments.
Document:
Petition
Eleventh Circuit Opinion
