Ying Qing Lu v. Lezell
45 F. Supp. 3d 86
D.D.C.2014Background
- Plaintiffs allege a RICO scheme where Lu and others were defrauded by Ghosh and Lezell through escrow/loan-like arrangements starting in 2008 and involving multiple victims.
- Lu deposited $50,000 in May 2008 into an escrow held by Lezell, who allegedly refused to return it as contractually promised.
- Lu lent another $50,000 to Ghosh/Westin Development via Lezell in May 2008; only an $8,000 partial payment was received.
- June 2008 payments: Ghosh received $50,000 via Lezell from Afshin Afsharnia; Afsharnia was never repaid.
- May 2011, Oklahoma Shelf Exploration financed another Ghosh project with $50,000 via Lezell, which was not repaid.
- Lu filed the initial complaint in 2011; the court later entered default against Ghosh and, after some proceedings, a default judgment for Lu and others was entered against Ghosh; Lezell moved for summary judgment on time-bar issues and merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are Lu's state-law claims time-barred? | Lu argues discovery rule tolling saves some claims. | Defendant contends the three-year limitations period began in 2008 and expired before 2011. | State-law claims are time-barred. |
| Does Lu’s RICO claim survive summary judgment? | Plaintiffs contend a pattern of racketeering occurred across multiple acts and victims. | Lezell argues insufficient conduct, enterprise, or pattern evidence to support RICO liability. | RICO claim survives summary judgment. |
| Did Lezell participate in the conduct of the RICO enterprise and was there an enterprise? | Lezell knowingly facilitated transfers and acted with a directive role in the fraud. | Lezell was only a middleman and not part of an enterprise or directing its affairs. | Evidence supports participation in conduct and existence of an association-in-fact enterprise. |
| Is there a sufficient pattern of racketeering activity to satisfy continuity? | Multiple predicate acts across different victims show relatedness and continuity. | Pattern claims rely on a single scheme with limited victims; insufficient continuity. | Closed-ended continuity established; pattern exists. |
Key Cases Cited
- Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (1985) (foundation for RICO conspiracy and pattern requirements)
- H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229 (1989) (pattern requires relatedness and continuity)
- Edmondson & Gallagher v. Alban Towers Tenants Ass’n, 48 F.3d 1260 (D.C. Cir. 1995) (continuity factors for RICO pattern; framework for closed-ended pattern)
- Western Assocs. Ltd. Partnership ex rel. Ave. Assocs. Ltd. v. Market Square Assocs., 235 F.3d 629 (D.C. Cir. 2001) (continuity/relatedness standard in pattern analysis)
- Banks v. Wolk, 918 F.2d 422 (3d Cir. 1990) (broader interpretation of relatedness in pattern cases)
- Lopez v. Council on American–Islamic Relations Action Network, Inc., 657 F. Supp. 2d 104 (D.D.C. 2009) (caution against RICO claims based on narrow, single schemes)