Eleventh Circuit Revives Billion-Dollar Fraud Suit Against Citigroup—and Redefines the Rules for Aiding and Abetting Claims

By Tal Lifshitz and Meaghan Goldstein

In a major win for plaintiffs and a potential game-changer in fraud and RICO litigation, the Eleventh Circuit reversed the dismissal of a billion-dollar lawsuit against Citigroup. The landmark opinion provides a much-needed reset of the pleading requirements for knowledge and substantial assistance under Florida law and a valuable green light to claims that may have, until recently, seemed unwinnable.

The appellate court’s May 8, 2025, decision in Otto Candies, LLC v. Citigroup Inc., (penned by Judge Britt Grant and joined by Judges Jill Pryor and Lisa Branch) not only revives a long-running case involving forged documents and $1 billion in losses but also breaks new ground by recalibrating the standard for fraud and aiding-and-abetting liability at the pleading stage.

Context: A Case Long Dismissed, Now Reopened

The plaintiffs, a mix of shipping companies, investment funds, and a bank, alleged that Citigroup, through its subsidiary Banamex, knowingly funded fraudulent cash advances to Mexican oil contractor Oceanografía (OSA), allowing OSA to inflate its finances and dupe creditors and bondholders. Citigroup allegedly ignored forged documents, processed large transactions without due diligence, and failed to disclose OSA’s deteriorating condition, all while earning millions in interest.

After years at the pleading stage and multiple dismissals in the Southern District of Florida, the Eleventh Circuit reversed in full, reviving all seven claims, including fraud, RICO, and aiding and abetting fraud.

A Major Shift: The Eleventh Circuit Corrects Course

Prior to Otto Candies, district courts in the Eleventh Circuit often applied heightened pleading expectations for claims of aiding and abetting fraud. Relying on district court orders in cases like Lamm and Lawrence to justify dismissals based on a failure to plead a “strong inference” of actual knowledge, district courts in this Circuit have required plaintiffs to allege that an aiding-and-abetting defendant had detailed insight into every aspect of the underlying fraud. In practice, that standard made it nearly impossible to survive the motion-to-dismiss stage without the benefit of discovery. 

Otto Candies expressly disapproves of that approach and clarifies that plaintiffs can allege knowledge generally, relying on facts that make knowledge plausible.  Instead, the Eleventh Circuit has clarified, it is sufficient to allege (as it is in Florida state court) that the defendant had a “general awareness that its role was part of an overall improper activity.” By endorsing this “general awareness” standard, the court rejected the notion that plaintiffs must allege direct and actual knowledge of the ins and outs of a particular fraud and confirmed that it is enough for a plaintiff, at the outset of the case, to allege facts that support a “reasonable inference” that the defendant knew about the underlying fraud. 

This decision marks a significant shift in jurisprudence for our Circuit and reflects a more practical understanding of how frauds operate, particularly in complex financial schemes, where knowledge is often inferred from involvement, access to information, or internal red flags. 

Substantial Assistance Can Be Ordinary Business

The opinion also reaffirms that conduct that may appear ordinary on the surface—like extending loans or processing payments—can qualify as substantial assistance if, for example, “the bank actually knew those transactions were assisting the customer in committing a specific tort.’” 

That language is especially significant in Ponzi scheme, bank fraud, and third-party liability cases, where institutions routinely defend themselves as merely performing “routine transactions” and, before Otto Candies, had the additional shield of feigning ignorance as to knowledge even where a “general awareness” of wrongdoing was undeniable. 

Final Thoughts

In reversing the district court’s dismissal, the panel provided much-needed guidance for future courts grappling with these issues (and solidified language that will, no doubt, be quoted for years to come by plaintiffs at the pleading stage):

The court failed to engage with the totality of the plaintiffs’ allegations, ignored certain claims altogether, and flipped the presumption at the pleading stage on its head by reading inferences and uncertainties against the plaintiffs . . . [R]ather than evaluating whether the plaintiffs had sufficiently pleaded their claims, the court effectively asked whether the plaintiffs had proven them.

And further:

In a scheme as complex as this one, there is often no smoking gun, particularly before discovery . . . plaintiffs with ‘substantial prediscovery evidence’—as shown by these plaintiffs’ detailed complaint and accompanying exhibits—can proceed past the motion-to-dismiss stage.

These paragraphs are now among the strongest language in the Eleventh Circuit for pushing back against early-stage dismissals in fraud, conspiracy, and aiding-and-abetting cases.

Otto Candies reopens a billion-dollar case, but its impact is much broader. For plaintiffs’ lawyers working in financial fraud, this is a landmark ruling with major implications.