Philip Morris - A Stock For Wealth Or Poverty (MO) Message Board

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Non-Tech : Philip Morris - A Stock For Wealth Or Poverty (MO)

MO 58.07

-0.5%

Dec 19 9:30 AM EST

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From: B.K.Myers	2/4/2005 3:57:16 PM
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Tobacco companies can keep their $280B, court says WASHINGTON (AP) — A federal appeals court ruled Friday that the Justice Department cannot seek $280 billion it says the tobacco industry earned through fraud, sending tobacco shares higher. The tobacco industry had urged a federal appeals court late last year to throw out a lower court decision allowing the Justice Department to seek $280 billion from cigarette-makers for allegedly misleading the public about the dangers of smoking. The federal government brought the lawsuit, now being heard in U.S. District Court, under a civil racketeering (RICO) statute originally designed to prosecute mobsters. The U.S. Court of Appeals for the District of Columbia Circuit ruled that the civil RICO statute doesn't allow the government to recover money in the ongoing lower court case because RICO statutes required "forward-looking remedies," while seeking the money was "a remedy aimed at past violations." (Opinion: U.S. v. Philip Morris USA, et al.) The industry had argued that the government should have filed its case under criminal RICO laws, which require a higher burden of proof and would have allowed the government to go after money in the case. But the government argued that judges do have the power to impose monetary remedies in civil RICO cases and that the government therefore has the right to go after earnings the companies made through fraud. U.S. District Judge Gladys Kessler previously agreed with the government but said the industry could appeal her ruling even as the case proceeds in lower court. That trial has been underway since September and is expected to last several more months. The government has described the $280 billion as an estimate of money the companies earned illegally through fraudulent activities such as marketing to children and denying doing so. Targeted in the government's lawsuit, filed in 1999, are Altria Group (MO) and its Philip Morris USA unit; Loews' Lorillard Tobacco unit, which has a tracking stock, Carolina Group (CG); Vector Group's Liggett Group; Reynolds Americans R.J. Reynolds Tobacco unit (RJR); and British American Tobacco unit British American Tobacco Investments (BTI). The tobacco companies deny they illegally conspired to promote smoking and say the government has no grounds to pursue them after they drastically overhauled marketing practices as part of the 1998 settlement with state attorneys general. Contributing: Reuters usatoday.com B.K.

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