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New Ruling on When to Use In Pari Delicto Defense

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A husband and wife convicted in federal court of illegally structuring money sued their accountant for allegedly convincing them to do it in the first place.

In their Complaint, they claimed that the accountant advised them to structure their cash transactions just below the $10,000.00 threshold in order to avoid reporting their activities to the federal government.

The accountant filed a motion to dismiss to the Complaint, bringing up in pari delicto as a defense. In pari delicto prevents a plaintiff who has participated in wrongdoing from recovering damages for loss resulting from that conduct.

However, the Superior Court Judge, while recognizing the validity of the defense, denied the motion. He stated that no state court had ever authorized its use at such an early stage of a proceeding.

He further went on that such a determination is very fact specific and can't be determined at the pleading stage.

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