                             In the
 United States Court of Appeals
               For the Seventh Circuit
                          ____________

No. 04-1812
B.E.L.T., INC., et al.,
                                            Plaintiffs-Appellants,
                                 v.

WACHOVIA CORPORATION,
                                              Defendant-Appellee.

                          ____________
          Appeal from the United States District Court for
         the Northern District of Illinois, Eastern Division.
          No. 01 C 4296—Robert W. Gettleman, Judge.
                          ____________
    ARGUED NOVEMBER 3, 2004—DECIDED APRIL 5, 2005
                   ____________




  Before FLAUM, Chief Judge, and EASTERBROOK and
SYKES, Circuit Judges.
  EASTERBROOK, Circuit Judge. Lacrad International
Corporation borrowed widely during its existence between
1984 and 2002. Lacrad, which among other activities sold
religious products on digital media, did not practice what it
preached; Rodney T.E. Dixon, its former CEO, pleaded guilty
last fall to fraud and money laundering. CoreStates Bank
had given Lacrad a line of credit in 1997 and also provided
Dixon and other managers with credit cards, which they
used profligately. (CoreStates merged into First Union
2                                                  No. 04-1812

National Bank, which has merged into Wachovia Corpora-
tion. We follow the parties’ practice and refer to the lender
as First Union.) By 1999, when Lacrad and its managers
owed more than $2 million on the revolving loan and credit
cards combined, First Union had concluded that Lacrad was
a bad risk and stopped making loans, but it accepted
payment on the outstanding balances. Some of Lacrad’s
other lenders contend that they furnished Lacrad with the
money used to pay down the First Union debt, and they
want to recoup these funds.
  Applying Illinois law to this suit under the diversity
jurisdiction, the district court concluded that plaintiffs lack
a viable legal theory and dismissed the complaint. 2002
U.S. Dist. LEXIS 23637 (N.D. Ill. Dec. 6, 2002). First Union
was only one of many defendants; once the claims against
all of them had been resolved, and the judgment became
final, plaintiffs appealed with respect to First Union alone.
  Like the district court, we assume (given the allegations
in the complaint) that First Union knew by 1999 that
Lacrad was financially unstable and suspected (“knew or
should have known,” the complaint alleges) that mischief
was afoot. Plaintiffs’ principal argument is that First Union
should have told someone—either banking regulators or
fellow lenders—about these suspicions. Had it done so, this
would have led to an investigation (the story goes), and
Lacrad would have collapsed sooner, before plaintiffs sunk
as much money into the venture as they eventually did.
  Yet Illinois, like most other states, does not require bus-
iness ventures to do good turns for their rivals. There is little
good Samaritan tort liability in general, and none that re-
quires businesses to assist their competitors. See generally
Stockberger v. United States, 332 F.3d 479, 480-82 (7th Cir.
2003). Plaintiffs’ claim is weaker than the one rejected in
Cuyler v. United States, 362 F.3d 949 (7th Cir. 2004), which
held that even though Illinois requires people to report
No. 04-1812                                                   3

apparent child abuse to child-welfare officials, failure to do
this does not support a claim by persons who might have
been alerted by such reports not to deal with a babysitter or
other potential abuser. Substitute “banking regulators” for
“child-welfare officials” and you have plaintiffs’ theory. The
only difference—which cuts against our plaintiffs—is that
Illinois law creates a clear duty of notice in child-abuse
cases, while there is no equivalently clear rule requiring
banks to notify regulators about non-banks’ financial
problems, and no duty at all for banks to notify other
lenders.
   What’s more, no one is entitled to the benefit of regula-
tory intervention. See Heckler v. Chaney, 470 U.S. 821
(1985). The regulation to which plaintiffs refer, 12 C.F.R.
§21.11, requires banks to notify the Treasury Department
about “any known or suspected Federal criminal violation.”
It does not create a private right of action for damages. Yet
that’s what plaintiffs want—monetary compensation for
First Union’s (supposed) failure to deem its suspicions grave
enough to notify federal law-enforcement officers. It is un-
necessary to canvass this ground in more detail, given our
recent opinion in Cuyler—not to mention the fact that one
Illinois appellate court has rejected a claim, essentially iden-
tical to the one plaintiffs make, that banks must protect
other lenders. See Popp v. Dyson, 149 Ill. App. 3d 956, 963,
500 N.E.2d 1039, 1043 (1986). See also Rankow v. First
Chicago Corp., 870 F.2d 356, 366 (7th Cir. 1989).
   It is not as if First Union were itself accused of fraud. It
is not any flavor of “fraud” to omit steps that might have pro-
tected strangers from your customers’ machinations. Cf.
Cenco Inc. v. Seidman & Seidman, 686 F.2d 449 (7th Cir.
1982). There can be no fraud without a representation made
with intent to deceive, see Ernst & Ernst v. Hochfelder, 425
U.S. 185 (1976), and First Union did not make any repre-
sentation to the plaintiffs. Nor did it have a duty to speak
up for their benefit. See Eastern Trading Co. v. Refco, Inc.,
4                                                 No. 04-1812

229 F.3d 617, 624 (7th Cir. 2000). To the contrary, state law
instructs banks not to tell other private parties about their
borrowers’ activities. See 205 ILCS 5/48.1(c). The federal
regulation has a similar confidentiality provision. 12 C.F.R.
§21.11(k).
  Although plaintiffs cite some decisions for the proposition
that anyone who receives funds from a perpetrator of fraud
must use that money to make good the losses suffered by
other victims, none of them was rendered by an Illinois
court (or for that matter a court of any other state). They
are federal district-court decisions, which under Erie have
no authoritative force—and these decisions also lack per-
suasive force, because they do not explore rules of state law
that might support their conclusions. It seems to us, more-
over, that plaintiffs misunderstand even these non-authori-
tative decisions. The opinions to which plaintiffs refer speak
of the duties of one who receives the “fruits” of a fraud, which
could occur when the operator of a Ponzi scheme rewards
some of the early investors with exorbitant returns, induc-
ing them to shill for the venture. See, e.g., In re Lake State
Commodities, 936 F. Supp. 1461, 1478 (N.D. Ill. 1996). See
also United States v. Frykholm, 362 F.3d 413 (7th Cir. 2004).
Being paid for services rendered is a different thing entirely.
Someone who sells a car at the market price to Charles
Ponzi is entitled to keep the money without becoming liable
to Ponzi’s victims for the loss created by his scheme. First
Union loaned money to Lacrad at the market price, in the
ordinary course of its business, and is presumptively
entitled to keep the repayment.
  We say presumptively because the best description of what
happened here is a preference among creditors. Lacrad
retired the First Union debt while leaving other creditors in
the lurch. A trustee in bankruptcy could have avoided some
or all of the preferential transfer under 11 U.S.C. §547.
Lacrad is not a debtor in bankruptcy, however, so the avoid-
ing powers under the Bankruptcy Code are unavailable.
No. 04-1812                                                  5

(The parties could not inform us why Lacrad was liquidated
outside bankruptcy.) Calling the receipt of a preference
“unjust enrichment” does not change matters; a preference
by any other name is still a preference and cannot be
recovered outside bankruptcy. See Nostalgia Network, Inc.
v. Lockwood, 315 F.3d 717, 719 (7th Cir. 2002). Anyway,
repayment of a loan is not “unjust” enrichment.
   A fraudulent conveyance may be recovered independent
of a bankruptcy proceeding, see 740 ILCS 160/8, but plain-
tiffs’ claim under Illinois’ implementation of the Uniform
Fraudulent Transfer Act founders on the statutory text.
Lacrad was insolvent when it paid First Union, but provision
of “reasonably equivalent value” (740 ILCS 160/5(a)(2))
prevents calling a transfer a fraudulent conveyance unless
that transfer occurred “with actual intent to hinder, delay,
or defraud any creditor of the debtor” (§160/5(a)(1)). Re-
payment of an antecedent loan comes within the “reason-
ably equivalent value” rule—which is just another way of
saying that preferential transfers differ from fraudulent
conveyances. See In re Liquidation of MedCare HMO, Inc.,
294 Ill. App. 3d 42, 50-54, 689 N.E.2d 374, 380-82 (1997);
Crawford County State Bank v. Doss, 174 Ill. App. 3d 574,
579, 528 N.E.2d 436, 439 (1988).
  So did Lacrad repay First Union “with actual intent to
hinder, delay, or defraud any creditor of the debtor”? The
district judge found the complaint inadequate to allege
fraud, which must be pleaded with particularity under Fed.
R. Civ. P. 9(b). Although intent may be pleaded generally,
the other elements of fraud require details—details that
were missing from the complaint and remain missing on
appeal. Plaintiffs contend, for example, that “Lacrad used
false financial statements to conceal their [sic] true finan-
cial status”, but this has nothing to do with its motive in
paying First Union.
  Recall that the gist of plaintiffs’ contention is that Lacrad
prolonged the fraud, borrowing more money until it finally
6                                                 No. 04-1812

collapsed. Paying First Union did not enable Lacrad to stay
in business longer; distribution of assets may have made it
thirsty for capital, but it also reduced the time it could stay
afloat. Plaintiffs have not pointed to any decision from
Illinois (or any other state) that treats a comparable pay-
ment of a third-party creditor (paying corporate insiders
and their cronies is altogether different), which dealt with
the debtor at arms’ length, as a fraudulent conveyance on
the theory that paying an antecedent debt evinces “actual
intent to hinder, delay, or defraud any [other] creditor of
the debtor”.
  Plaintiffs do contend that the events demonstrate “badges
of fraud,” see §160/5(b), but the events they allege differ from
those that the statute covers. For example, §160/5(b)(3)
deems it evidence of fraud that the transfer or obligation was
concealed. Plaintiffs say that Dixon’s fraud was concealed,
which is true enough, but the debt to First Union, and the
transfers in payment of that debt, were disclosed and trans-
parent. And so on.
  This was, or could have been, a case about preferential
transfers on the eve of bankruptcy. Because Lacrad never
became a debtor in bankruptcy, however, preferences among
creditors cannot be reversed; and in the end this is nothing
but a preference. Plaintiffs’ other arguments have been
considered but do not require discussion.
                                                    AFFIRMED
No. 04-1812                                         7

A true Copy:
      Teste:

                   ________________________________
                   Clerk of the United States Court of
                     Appeals for the Seventh Circuit




               USCA-02-C-0072—4-5-05
