                     United States Court of Appeals
                              FOR THE EIGHTH CIRCUIT
                                 ________________

                                    No. 98-1290
                                 ________________

Robert R. Wisdom; Nancy J.                  *
Wisdom,                                     *
                                            *
             Appellants,                    *      Appeal from the United States
                                            *      District Court for the
      v.                                    *      Eastern District of Missouri.
                                            *
First Midwest Bank, of Poplar               *
Bluff; Jerry F. McLane; Jerry               *
Dorton; Joey McLane,                        *
                                            *
             Appellees.                     *
                                            *

                                 ________________

                                 Submitted: September 22, 1998
                                     Filed: January 11, 1999
                                 ________________

Before HANSEN, BRIGHT, and MORRIS SHEPPARD ARNOLD, Circuit Judges.

                                 ________________

HANSEN, Circuit Judge.

        Robert and Nancy Wisdom (the Wisdoms) brought this Racketeer Influenced
and Corrupt Organizations Act (RICO) claim against First Midwest Bank and three of
its officers. They also asserted federal law claims for violation of the Truth In Lending
Act, mail fraud, wire fraud, extortion, and pendant state law claims of common law
fraud and deceit. The district court dismissed the claims for failure to state a claim
upon which relief could be granted, from which the Wisdoms now appeal. We affirm
in part, vacate in part, and remand to the district court for further proceedings.

                                          I.

       In reviewing a motion to dismiss for failure to state a claim, we view the facts
in the light most favorable to the claimant, taking the facts as found in the complaint
as true. See Duffy v. Landberg, 133 F.3d 1120, 1122 (8th Cir.), cert. denied, 119 S.
Ct. 62 (1998). In May 1989, the Wisdoms borrowed $283,000 (Loan I) from First
Midwest Bank to purchase Robert R. Wisdom Oil Co., Inc., using the proceeds to pay
off the company's creditors. The loan was contingent on them also taking another
$120,000 loan (Loan II), which they were unaware of until closing, on property
foreclosed by a related bank, Carter County Bank. The Wisdoms allege it was too late
to back out of Loan I because representatives of the creditors to be paid off were
present at the closing.

        Defendant Jerry McLane is principal owner and president of First Midwest Bank
and principal owner of Carter County Bank. Defendant Joey McLane was also
president of First Midwest Bank at some time and dealt with the Wisdoms concerning
their loans. Plaintiffs defaulted on Loan I in May 1991, and entered into a settlement
agreement for $257,825 with defendant Jerry Dorton, a vice-president of First Midwest
Bank. Portions of the payments meant for the Loan I settlement were credited to Loan
II between May 1991 and January 1992.

       In March 1992, when the Wisdoms sought to pay off the then balance of Loan
I of $1,473, Dorton strongly suggested that they leave the loan on the books to make
it harder for other creditors to attach the property securing the loan. In July, Dorton
mailed a letter to the Wisdoms' attorney, indicating that both notes could be released
for $15,000. In August 1992, the bank mailed a notice of default, stating a balance due

                                          2
on Loan I of $51,375, and threatened foreclosure. Plaintiffs paid an additional $28,000
between September and December 1992 and arranged for their associate to assume the
then $26,000 balance of Loan I. Because Loan II was still outstanding, defendants
refused to release any collateral securing Loan II. Much of the collateral was
subsequently stolen and vandalized.

       The Wisdoms filed a pro se complaint alleging that the defendants participated
in a pattern of racketeering activity in violation of 18 U.S.C. § 1962(c) & (d) (1996),
by committing various acts of mail fraud, wire fraud, extortion, and Truth In Lending
violations in connection with the collection of the two loans. The Wisdoms also
alleged that the defendants violated the Truth In Lending Act, 15 U.S.C. §§ 1601-67f
(1996).1 The district court read the complaint as alleging implied rights of action
under 18 U.S.C. § 1341 (1996) (mail fraud), 18 U.S.C. § 1343 (1996) (wire fraud), and
18 U.S.C. § 1951 (1996) (extortion). Finally, the Wisdoms brought pendant state
claims against the defendants based on common law fraud and deceit. The defendants
filed a motion to dismiss the complaint for failure to state a claim upon which relief
could be granted. See Fed. R. Civ. P. 12(b)(6). The Wisdoms filed a traverse to the
motion to dismiss, requesting that the court allow them to amend their complaint if it
was indeed defective. The district court dismissed the complaint in its entirety, without
addressing the Wisdoms' argument that they should be allowed to amend their
complaint. This appeal followed.

                                           II.

        We review the dismissal of a complaint for failure to state a claim upon which
relief could be granted de novo, affirming the district court if there is no provable set



      1
       The Wisdoms concede that their complaint failed to state a claim under the
Truth In Lending Act because the transaction involved a commercial loan to which
Truth In Lending does not apply. See 15 U.S.C. § 1603(1).
                                           3
of facts that would entitle the plaintiff to the requested relief. See WMX Tech., Inc.
v. Gasconade County, Mo., 105 F.3d 1195, 1198 (8th Cir. 1997). In so doing, we
construe the complaint liberally, taking all factual allegations as true. Id. It is well
settled that "we may affirm the district court's judgment on any basis supported by the
record." Stevens v. Redwing, 146 F.3d 538, 543 (8th Cir. 1998) (internal quotations
and citations omitted).

A.    RICO Claim

       Section 1962(c) of the RICO Act makes it "unlawful for any person employed
by or associated with any enterprise engaged in . . . interstate . . . commerce, to conduct
or participate, directly or indirectly, in the conduct of such enterprise's affairs through
a pattern of racketeering activity." Subsection (d) criminalizes a conspiracy to violate
one of the other subsections of § 1962. Section 1964(c) allows a private party, who
has been injured in his property from a RICO violation, to sue for damages. To state
a RICO claim, the Wisdoms must show "(1) conduct (2) of an enterprise (3) through
a pattern (4) of racketeering activity." Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S.
479, 496 (1985) (footnote omitted).

       The pattern element "requires at least two acts of racketeering activity." 18
U.S.C. § 1961(5); see also H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229, 237-
38 (1989). However, a mere allegation of two or more acts is insufficient to state a
RICO claim; the predicate acts must be related and must "amount to or pose a threat
of continued criminal activity." See United Healthcare Corp. v. American Trade Ins.
Co., Ltd., 88 F.3d 563, 571 (8th Cir. 1996) (quoting H.J. Inc., 492 U.S. at 239). The
relationship prong of the pattern element is satisfied if the predicate acts "'have the
same or similar purposes, results, participants, victims, or methods of commission, or
otherwise are interrelated by distinguishing characteristics and are not isolated events.'"
Handeen v. LeMaire, 112 F.3d 1339, 1353 (8th Cir. 1997) (quoting H.J. Inc., 492 U.S.
at 240). The second prong, continuity, can be either closed-ended or open-ended.

                                            4
Closed-ended continuity involves "a series of related predicates extending over a
substantial period of time;" open-ended continuity involves acts which, by their nature,
threaten repetition into the future. See H.J. Inc., 492 U.S. at 241-42. Multiple
predicates within a single scheme are encompassed within the RICO statute as long as
the relationship and continuity elements are met. See id. at 237; Terry A. Lambert
Plumbing, Inc. v. Western Sec. Bank, 934 F.2d 976, 981 (8th Cir. 1991).

        In defining "racketeering activity," § 1961(1) lists the predicate acts that will
support a RICO claim. The Wisdoms' pro se complaint alleges that the defendants'
racketeering activity included numerous instances of mail fraud, wire fraud, extortion,
and violations of Truth In Lending. Acts indictable under the mail fraud, wire fraud,
and extortion statutes are among the enumerated predicate acts. However, Truth In
Lending violations are not on the list. See 18 U.S.C. § 1961(1). The Wisdoms wish
to replead the acts surrounding First Midwest Bank's requirement that they accept the
second loan, originally pled as a violation of Truth In Lending, as a violation of the
Bank Holding Company Act, 12 U.S.C. § 1972 (1996). We address this argument
later, but note for now that a violation of that statute similarly is not a predicate act for
purposes of establishing a RICO claim. See 18 U.S.C. § 1961(1). Thus, we look only
to the alleged predicate acts of mail fraud, wire fraud, and extortion to determine
whether the pattern requirement has been met.

       When pled as RICO predicate acts, mail and wire fraud require a showing of:
1) a plan or scheme to defraud, 2) intent to defraud, 3) reasonable foreseeability that
the mail or wires will be used, and 4) actual use of the mail or wires to further the
scheme. See Murr Plumbing, Inc. v. Scherer Bros. Fin. Servs. Co., 48 F.3d 1066, 1069
& n.6 (8th Cir. 1995) (noting that a RICO claim does not require proof of
misrepresentation of fact). Extortion is defined as "obtaining . . . property from
another, with his consent, induced by wrongful use of actual or threatened force,
violence, or fear, or under color of official right." 18 U.S.C. § 1951(b)(2).



                                             5
       The Wisdoms allege that the defendants committed mail fraud in relation to the
settlement agreement reached in May 1991. The Wisdoms do not dispute that they
were delinquent on the loan or that the amount of the settlement correlated to the
unpaid balance of the loan. They only claim that the conditions of the settlement were
unfair. The bank had a right to attempt to collect on the delinquent loan, including
entering into the settlement agreement. We agree with the district court that the
settlement was nothing more than hardball financing; it did not rise to the level of
fraud. See, e.g., Lambert Plumbing, 934 F.2d at 981 (finding that a bank's acts of
protecting itself in light of a problem loan are not indicative of racketeering activity).



      Though mail fraud can be a predicate act, mailings are insufficient to establish
the continuity factor unless they contain misrepresentations themselves. The court
must look to the underlying scheme to defraud. See Primary Care Investors, Seven,
Inc. v, PHP Healthcare Corp., 986 F.2d 1208, 1215 (8th Cir. 1993) (refusing to
consider a letter containing no indications of fraud as the beginning mail fraud
predicate act); Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1414 (3d Cir.)
("[T]he continuity question should not be affected by the fact that a particular
fraudulent scheme involved numerous otherwise 'innocent' mailings . . . ."), cert.
denied, 501 U.S. 1222 (1991). Because the May 1991 settlement agreement did not
amount to a fraudulent scheme, the mailing of the agreement is not a predicate act that
can be used to establish a pattern.

        The only acts that could be construed to involve a fraudulent scheme surround
the attempts to collect more than the agreed balance of the loans. Reading the
complaint in the light most favorable to the Wisdoms, Dorton agreed to accept $15,000
in full payment of both loans in July 1992. However, later in August, First Midwest
Bank mailed a default notice claiming a balance due of $51,375 and threatened
foreclosure in the event of nonpayment. Facing foreclosure, the Wisdoms paid, and
caused their associates to pay, an additional $54,000 between September and
December 1992.

                                            6
       Assuming these collection activities satisfy the initial showing of an underlying
scheme to defraud, the predicate acts of mail and wire fraud occurred between July and
December 1992. This six-month period is too short to satisfy the closed-ended
analysis of the pattern requirement. See Primary Care, 986 F.2d at 1215 (holding that
eleven months is insufficient to satisfy the closed-ended continuity requirement and
noting that other Circuits consistently hold that schemes less than one year are too
short). Assuming, arguendo, that the March 1992 "suggestion" to keep the loan with
First Midwest Bank could amount to extortion, the predicate acts would still only cover
a ten-month period, which likewise is too short to satisfy the closed-ended continuity
requirement. Finally, there are no allegations that can be construed to show on-going
criminal activity. We hold that the Wisdoms have failed to meet the pattern element
and, thus, their RICO claim must fail. Consequently, we need not address the other
RICO elements.

B.    Implied Right of Action Under Criminal Statutes

       A criminal statute may provide an implied private right of action if Congress so
intended in enacting the criminal statute. See Thompson v. Thompson, 484 U.S. 174,
179 (1988) (holding that a private remedy will not be implied unless legislative intent
can be inferred from statutory language or elsewhere). Whether 18 U.S.C. §§ 1341
(mail fraud), 1343 (wire fraud), and 1951 (extortion) provide private rights of action
are questions of first impression in the Eighth Circuit. We consider four factors in
determining whether a private right of action exists: 1) whether the plaintiff is a
member of the class for whose benefit the statute was enacted; 2) whether Congress
intended, explicitly or implicitly, to create such a remedy; 3) whether a private remedy
is consistent with the underlying legislative scheme; and 4) whether a private right
based on a federal statute would interfere with an area relegated to state law. See Cort
v. Ash, 422 U.S. 66, 78 (1975). Congressional intent is the final touchstone and the
Cort factors have been limited to providing evidence of Congress's intention to create
a private right of action. See Thompson, 484 U.S. at 189 (Scalia, J., concurring)


                                           7
(indicating Cort was essentially overruled by Touche Ross & Co. v. Redington, 442
U.S. 560 (1979)); Furrer v. Brown, 62 F.3d 1092, 1100 (8th Cir. 1995) (noting that
Cort is only a guide to determining Congressional intent, citing Thompson and Touche
Ross), cert. denied, 517 U.S. 1167 (1996).

       The Supreme Court reviewed the legislative history of the mail fraud statute in
assessing the breadth of criminal activity within the statute's scope. See McNally v.
United States, 483 U.S. 350, 356-57 (1987). The Supreme Court concluded that the
sparse legislative history "indicates that the original impetus behind the mail fraud
statute was to protect the people from schemes to deprive them of their money or
property." Id. at 356. It is not enough, however, that a statute intends to benefit a class
of persons. See Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 17-18
(1979) (stating that although Congress clearly intended to benefit the plaintiff by
placing fiduciary duties on the defendant, whether those duties were enforceable by a
private action is another question). Congressional intent is the determining factor and
is not merely to be weighed against the other Cort factors. See Thompson, 484 U.S.
at 179. Though the legislative history according to McNally is not inconsistent with
a private right of action, consistency is not enough. There is no clear indication that
Congress intended to create such a right.

       Other courts that have considered this issue have found no private right of
action. See Ryan v. Ohio Edison Co., 611 F.2d 1170, 1178 (6th Cir. 1979) (finding
the scant legislative history of the mail fraud statute to indicate an intent to punish
dealers of fraudulent devices for using the United States mails but not an intent to
create a private right of action); Bell v. Health-Mor, Inc., 549 F.2d 342, 346 (5th Cir.
1977) (finding no implied private remedy under mail fraud statute); Napper v.
Anderson, Henley, Shields, Bradford & Pritchart, 500 F.2d 634, 636 (5th Cir. 1974)
(same under wire fraud statute), cert. denied, 423 U.S. 837 (1975). Though a bare
criminal statute does not necessarily preclude an implied private right of action, there
should "at least [be] a statutory basis for inferring that a civil cause of action of some
sort lay in favor of

                                            8
someone." Cort, 422 U.S. at 79; see also Ryan, 611 F.2d at 1178. Neither the mail
fraud statute nor its legislative history provides for any remedy other than criminal
sanctions. Thus, we agree with the Fifth and Sixth Circuits and hold that Congress did
not intend to create a private right of action in enacting either the mail or wire fraud
statutes.

        Though fewer courts have addressed the issue of a private right of action under
the extortion statute, those that have have found it to be a bare criminal statute with no
support for a private cause of action in the legislative history. See American Computer
Trust Leasing v. Jack Farrell Implement Co., 763 F. Supp. 1473, 1497 (D. Minn. 1991)
(finding no private right of action under extortion statute which is "purely criminal in
nature"), aff'd and remanded, American Computer Trust Leasing v. Boerboom Int'l,
Inc., 967 F.2d 1208, 1214 (8th Cir.) ("[W]e affirm the district court's order in all
respects."), cert. denied, 506 U.S. 956 (1992); Peterson v. Philadelphia Stock Exch.,
717 F. Supp. 332, 336 (E.D. Pa. 1989) (finding no legislative intent from the statute
or its legislative history to imply a private cause of action under 18 U.S.C. § 1951);
Creech v. Federal Land Bank of Wichita, 647 F. Supp. 1097, 1099 (D. Colo. 1986) (no
private right of action under extortion statute). We agree that neither the statutory
language of 18 U.S.C. § 1951 nor its legislative history reflect an intent by Congress
to create a private right of action. We hold, therefore, that the district court correctly
dismissed the Wisdoms' claims based on a private right of action under 18 U.S.C. §§
1431, 1434, and 1951.

C.    Amended Complaint

       The Wisdoms filed a traverse to the defendants' motion to dismiss, arguing that
they should be allowed to amend their complaint to remedy its shortcomings. Though
the Wisdoms did not file a formal motion to amend their complaint, that failure is not
necessarily fatal as long as they show a willingness to amend the complaint. See
Ferguson v. Cape Girardeau County, 88 F.3d 647, 651 (8th Cir. 1996). Generally, the


                                            9
denial of a request to amend a complaint is reviewed by this court for an abuse of
discretion. See Frey v. City of Herculaneum, 44 F.3d 667, 672 (8th Cir. 1995).
Because the district court's order is silent as to whether the request was even
considered, we are unable to ascertain whether the district court denied the request or
ignored it. Leave to amend a complaint should be freely given to promote justice.
Fed. R. Civ. P. 15(a). We generally prefer to decide claims on their merits instead of
on their pleadings. See Ferguson, 88 F.3d at 650; Bank v. Pitt, 928 F.2d 1108, 1112
n.6 (11th Cir. 1991). In light of the foregoing, parties should usually be given at least
one chance to amend their complaint. See Bank, 928 F.2d at 1112. However, parties
should not be allowed to amend their complaint without showing how the complaint
could be amended to save the meritless claim. See Ferguson, 88 F.3d at 651.

       The Wisdoms allege that the defendants violated the anti-tying provision of the
Bank Holding Company Act, 12 U.S.C. § 1972, by requiring them to accept Loan II
from Carter County Bank before First Midwest Bank would grant Loan I. These facts
may be able to support a claim under that Act. See § 1972(1)(B) ("A bank shall not
in any manner extend credit . . . on the condition or requirement . . . that the customer
shall obtain some additional credit . . . from a bank holding company of such bank, or
from any other subsidiary of such bank holding company."). Because we are unsure
whether the district court addressed the Wisdoms' request to amend their complaint,
we remand this issue to the district court for a ruling on the request to amend the
complaint regarding the Bank Holding Company Act.

      The district court dismissed the pendant state fraud claim for failure to plead the
claim with particularity as required by Fed. R. Civ. P. 9(b) and for failure to allege the
elements of fraud under Missouri common law. We likewise remand the request to
amend the common law fraud claim for a ruling by the district court. In light of our
opinion, the Wisdoms have failed to show how an amendment to their RICO claim




                                           10
could save that claim;2 thus, the district court need not entertain the request to amend
the RICO claim.

                                          III.

      For the foregoing reasons, we affirm the district court as to the RICO claim, the
mail and wire fraud claims, and the extortion claim. We vacate the district court's
dismissal of the common law fraud claim and remand to the district court for
consideration of the Wisdoms' request to amend their complaint as to the Bank Holding
Company Act claim and the Missouri common law fraud claim.

      A true copy.

             Attest:

                     CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT




      2
       The Wisdoms argue that they should be allowed to replead the complaint to
properly plead the "enterprise" and "racketeering activity" elements of their RICO
claim. Because we find that they fail the "pattern" element, such amendments
would be futile.
                                          11
