GILES.

*1 Defendant Robert F. DiMarco ("DiMarco") has moved for summary judgment with respect to the claims asserted against him. For the reasons stated below his motion is denied.

I. BACKGROUND

Plaintiffs have sued several individuals and entities, alleging that defendants participated in a scheme to defraud them. The complaint alleges that the defendants were involved in a pyramid scheme and conspiracy carried out under the guise of a commercial photocopying business known as Lila, Inc. ("LILA"). Working through LILA, defendants Thomas J. Becker, John Frank Rodgers, Randy T. Hilgert, and others allegedly fraudulently induced approximately one hundred leasing companies and financial institutions, including plaintiffs, to advance more than $37 million for the purchase of photocopiers that did not actually exist. Financing for these "phantom" photocopiers was obtained by switching serial number plates on copiers previously purchased or leased by LILA and financed by other leasing companies and financial institutions.

In December 1990, the FBI uncovered the pyramid scheme and conspiracy ("the LILA scam"). The FBI determined that the LILA scam had been in effect since at least February of 1988. In January, 1991, defendants Becker, Rodgers, and Hilgert were indicted under 18 U.S.C. 371 (conspiracy), 1341 (mail fraud), 1343 (wire fraud), and 1956 (money laundering) for their roles in the LILA scam. They later pled guilty to charges of conspiracy and money laundering. See Affidavit of FBI Special Agent Marilyn Lucht.

Plaintiffs filed the instant civil action, alleging that defendants violated the Racketeering Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. 1961 et seq. Plaintiffs allege that defendant DiMarco, who is a Certified Public Accountant, participated in the LILA scam by preparing false financial statements for LILA which were disseminated to at least one financier, Banc One, in October 1990, thereby aiding the principals of LILA in consummating new loans for phantom copiers and in discouraging other financiers from taking action to secure repayment of loans previously made to LILA. These actions by DiMarco allegedly allowed the LILA principals to hide their scheme and keep the scheme from being discovered by plaintiffs and other defrauded financiers. See Complaint 2, 16, 17, 19-21, 179-181, 182(c)(49)-(50), 184(a)-(c), 185-195, 223-242.

Plaintiffs allege that DiMarco aided and abetted other defendants in committing violations of 18 U.S.C. 1962(a), see Complaint, Count I, and 18 U.S.C. 1962(b), see Complaint, Count II. They further allege that DiMarco violated 18 U.S.C. 1962(c) by participating in an enterprise engaged in a pattern of racketeering activity, see Complaint, Count III, and 18 U.S.C. 1962(d) by conspiring to violate 18 U.S.C. 1962(a), (b), or (c), see Complaint Count IV. DiMarco first moved for summary judgment over one year ago. On February 3, 1993, the court denied that motion without opinion. DiMarco has now renewed his motion for summary judgment on all counts.

II. STANDARD FOR SUMMARY JUDGMENT

*2 Summary judgment is to be granted only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). As the moving party, DiMarco has the burden of demonstrating the absence of any genuine issue of material fact. See Continental Aircraft Sales v. McDermott Bros., 316 F.Supp. 232, 234 (M.D. Pa.1970).

III. DISCUSSION

A. COUNTS I and II

Counts I and II of the complaint against DiMarco allege that he aided and abetted RICO violations. An aider and abettor of two predicate acts can be liable civilly under RICO. Petro-Tech, Inc. v. Western Co. of North America, 824 F.2d 1349, 1356 (3d Cir.1987). The elements of an aiding and abetting claim are: (1) an independent wrong by a primary actor; (2) the aider and abettor's knowledge of that wrong; and, (3) "substantial assistance" by the aider and abettor in the achievement of the violation by the primary actor. Odesser v. Continental Bank, 676 F.Supp. 1305, 1313 (E.D.Pa.1987) (citing Walck v. American Stock Exchange, 687 F.2d 778, 791 (3d Cir.1982), cert. denied, 461 U.S. 942 (1983); Landy v. Federal Deposit Insurance Corporation, 486 F.2d 139, 162-63 (3d Cir.1973) cert. denied, 416 U.S. 960 (1974)).

DiMarco contends that there is no evidence to support an aiding and abetting claim against him, and that summary judgment must be granted in his favor. He has provided an affidavit stating that he had no knowledge of the LILA scam. Further, he avers that his sole involvement with the other defendants was through his preparation, for LILA's internal use, of unaudited compilations and reviews of quarterly financial data which were gleaned from various statements and other data provided to him by LILA's public accountant. See DiMarco

Affidavit, attached as Exhibit "B" to DiMarco's Renewed Motion for Summary Judgment.

Using the data and information provided by LILA, DiMarco claims that he compiled, categorized and organized the data in a manner to conform to generally accepted accounting procedures. In return, LILA paid his regular and normal fee for such work. The documents prepared by DiMarco stated that they were unaudited interim statements, that they contained the representations of LILA management only, and that he expressed no professional opinion about them. Id.

On the other hand, plaintiffs have presented evidence purporting to show that DiMarco's role in the LILA scam was not that of an innocent outside accountant. In an April 27, 1992 interview, [FN1] defendant Rodgers stated that DiMarco "knew that they were ... false financial statements and they were just throwing a masthead job...." Plaintiffs' Exhibit B at 57. The court finds that this evidence creates a genuine issue of fact as to DiMarco's knowledge of the scam. If DiMarco had actual knowledge of the scam, the disclaimer he placed on the reports he prepared, stating that the financial data he relied upon was based upon representations of LILA management only, was itself false and misleading.

*3 There is also genuine issue of material fact concerning the third element of the alleged RICO aiding and abetting violation, the rendering of "substantial assistance." In a November 26, 1991 interview with FBI agent Marilyn Lucht, defendant Rodgers explained that procuring a CPA's involvement was critical to the scheme's success because it kept the investors satisfied that LILA was a legitimate enterprise. See Plaintiffs' Exhibit A at 22-23.

DiMarco argues that two recent cases, decided since the court first denied his motion for summary judgment on February 3, 1993, require that summary judgment now be entered in his favor. See Reves v. Ernst & Young, 113 S.Ct. 1163 (1993); University of Maryland v. Peat, Marwick, Main & Co., 996 F.2d 1534 (3d Cir.1993). The court disagrees. Both Reves and University of Maryland involved attempts to hold outside accountants liable under RICO for, in essence, providing deficient accounting services. As a consequence, these cases focused on whether the accountants sufficiently participated in the operations of the RICO enterprise to be themselves held liable under 18 U.S.C. 1962(c). In neither case was it alleged nor was evidence adduced that the accountants participated directly in the fraud. In contrast, it is alleged here, and evidence has been advanced to show, that DiMarco actively participated in the primary RICO violation by certifying financial statements that he knew were false or which he knew would be used to promote fraud.

B. COUNTS III and IV

Count III alleges that DiMarco actually participated in an enterprise engaged in a pattern of racketeering activity, and Count IV alleges that he conspired to violate RICO. The same evidence which created material issues of fact concerning DiMarco's actions and knowledge with respect to Counts I and II also creates material issues of fact regarding Counts III and IV. Consequently, summary judgment is denied as to all counts of the complaint.

An appropriate order follows. ORDER

AND NOW, this day of February, 1994, upon consideration of defendant Robert F. DiMarco's motion for summary judgment and plaintiffs' response thereto, it is hereby ORDERED that the motion is DENIED.

FN1. The interview was conducted by the Trustee in Bankruptcy for In re LILA, Inc., B.C. # 91-10059S (U.S. Bankruptcy Court, E.D. Pa.). It appears that neither this interview nor the other piece of evidence upon which plaintiffs mainly rely, Plaintiffs' Exhibit A (interview of Rodgers by FBI agent Lucht), would be admissible at trial. However, plaintiffs have served on Rodgers requests for admission concerning these interviews, which have not been answered. Under these circumstances we will not ignore the evidence presented by plaintiffs in their opposition to DiMarco's summary judgment motion. See Weinstein v. Bullick, 827 F.Supp. 1193 (E.D.Pa.1993) (discussing circumstances under which a court deciding summary judgment motion will consider evidence that might not be admissible at trial).