OPINION AND ORDER
Darrick and Yolanda Grimes (“Plaintiffs”), proceeding pro se, bring this action against Fremont General Corporation (“FGC”) and Fremont Investment and Loan (“FIL”) (collectively, “Fremont”), WCS Lending LLC (“WCS”), Jonathan Tanenbaum (“Tanenbaum”), Nadene McBean (“McBean”), U.S. Bank, National Association, as Trustee for Master Asset Backed Securities Trust 2006-FRE-l (“U.S. Bank”), and 3 Day Appraisal Services (collectively, “Defendants”),
1
for violations of the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601
et seq.;
the Home Ownership and Equity Protection Act (“HOEPA”), 15 U.S.C. § 1639; the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2601,
et seq.;
the Fair Housing Act (“FHA”), 42 U.S.C. § 3601
et seq.;
the Equal Credit Opportunity Act (“ECOA”), 15 U.S.C. § 1691,
et seq.;
the Civil Rights Act, specifically 42 U.S.C. §§ 1981, 1982, & 1985(3); and the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962; as well as fifteen state law claims.
2
Fremont, WCS, and U.S. Bank (collectively, the “Moving Defendants”) have each
I. Background
The Amended Complaint is 161 pages long and contains 722 paragraphs. It sometimes contains conflicting dates and descriptions of events, and Plaintiffs are not always clear about which Defendants purportedly took which actions. However, for purposes of deciding the instant motions to dismiss, the Court accepts as true the allegations contained in Plaintiffs’ Amended Complaint, described below, and construes them in the light most favorable to Plaintiffs.
A. Factual Background
Plaintiffs Darrick and Yolanda Grimes (“Plaintiffs”) are African-American owners of a house located at 23 Stacy Lee Drive, in Newburgh, New York (the “Newburgh home”). (Am. Compl. ¶¶ 17-18.) At the time of the transaction at issue, Plaintiffs were employed as legal assistants, earning a combined $103,000 per year. (Id. ¶ 61.) 4 According to Plaintiffs, Defendant FGC is a financial services holding company that engages in real estate lending operations through its wholly owned subsidiary, Defendant FIL, “a wholesale lender [that] obtains] all of its loans through a network of independent mortgage brokers.” (Id. ¶¶ 19, 23.) Defendant WCS is a licensed mortgage broker based in Florida. (Id. ¶ 28.) Defendant Tanenbaum was a mortgage broker at WCS. (Id. ¶ 31.) 5 Defendant U.S. Bank is a banking association acting as trustee for Master Asset Backed Securities Trust 2006 FRE-1, and “is the trustee for the securitization pool that contains [ ] Plaintiffs [sic] loan pursuant to a Pooling and Service Agreement dated August 1, 2006.” (Id. ¶¶ 35, 38.) 6
1. Purchase and Financing of the Newburgh Home
Plaintiffs owned a home in St. Albans, New York (the “St. Albans home”), which they placed on the real estate market on or about July 17, 2005.
(Id.
¶¶ 135-36.) On August 1, 2005, Plaintiffs signed a contract to purchase the Newburgh home for $435,000, and submitted a $20,000 down payment to the sellers.
(Id.
¶¶ 135, 137.)
Plaintiffs allege that on or about September 9, 2005, Tanenbaum had them sign a loan application that purportedly misstated the income of Yolanda Grimes; Plaintiffs were not given a copy of the application, and were not asked to provide documentation of their income, employment, or assets.
(Id.
¶ 65.) Exhibits attached to the Amended Complaint indicate that WCS submitted several sets of documents to Fremont in September and October 2005.
9
First, Plaintiffs assert that upon information and belief, WCS employees Tanenbaum and McBean “intentionally and knowingly” submitted a mortgage application and related pre-disclosure documents to Fremont on September 13, 2005, that “contained falsified data and forged signatures on the application in many material respects.”
(Id.
¶¶ 158, 212-13.)
10
Next, Plaintiffs allege that on or about September 14, 2005, they received a mortgage application and disclosure documents from WCS for a potential Fremont loan, that Plaintiffs characterize as “confusing”; however, Plaintiffs admit that they signed these documents on September 20, 2005. (Id. ¶¶ 69, 71.) Despite Plaintiffs’ claims that this application offered a loan with a fixed interest rate of 7% (id. ¶ 226), the actual documents, which Plaintiffs themselves have submitted as exhibits, clearly and repeatedly stated that the loan was not a fixed rate, but instead was a 2/28 ARM mortgage. (Compl. Ex. 3.) The completed loan application also stated — on pages that Plaintiffs concede they signed— that Plaintiffs earned $1,076 per month in net rental income. (Id.) 12 Plaintiffs also signed a document acknowledging that their “interest rate [was] currently floating and [was] subject to daily changes based upon market fluctuations,” and a “Good Faith Estimate” of their likely settlement charges, listing anticipated fees, charges, taxes, and insurance payments in the amount of $12,844.75. (Id.)
Ultimately, the sale of the Newburgh home closed on October 12, 2005. (Id. ¶ 73.) Plaintiffs claim that they were “shocked” at the closing to find out for the first time the actual terms of their loans, and that they “closed under extreme duress” (id. ¶¶ 251, 253), though Plaintiffs admitted at oral argument that they had their lawyer with them at the closing. 13 According to Plaintiffs, during the closing they “were instructed to sign various documents and initial numerous individual pages” that were not explained to them (again, in the presence of their attorney), but they were assured — by an unspecified person — “that each document was in order and should be signed, including the mortgage application and related disclosure documents that [were] submitted and signed on September 13, 2005,” which are the documents that Plaintiffs now claim were forged. (Id. ¶¶ 188-89.) 14
Plaintiffs entered into two mortgage agreements with Fremont on October 12, 2005.
(Id.
¶ 262.) The first was a thirty-year mortgage for $405,000, with the first two years set at a fixed interest rate of 8.45%, and a variable, higher rate for the remaining twenty-eight years (the “first mortgage”).
(Id.)
The second loan was a fifteen-year mortgage for $22,500, at a fixed interest rate of 12.75% (the “second mortgage”).
(Id.)
At the closing, Plaintiffs signed another loan application with the same terms and information as were included on the application they signed on September 20, 2005 (albeit now with the higher 8.45% interest rate), and again signed and/or initialed disclosure statements, that, inter alia, indicated that the loans could be assigned, explained the mechanics of their ARM loan and that the
2. Plaintiffs’ Race-Related Allegations
Plaintiffs allege that Tanenbaum used a “race-based” sales pitch that emphasized WCS’s “purported loyalties to lenders nationwide and other borrowers and minority home buyers like the Plaintiffs,” and that was “consciously intended to overcome and disarm prospective minority home buyers and borrowers.” (Id. ¶¶ 146-47.) According to Plaintiffs, Tanenbaum “aggressively continued to play upon the race issue.” (Id. ¶ 148.) 15 Plaintiffs further state that “[u]pon information and belief, [ ] WCS [ ] targeted its discriminatory activities against people of color and neighborhoods in northern New York in which the majority of residents are non-white” (id. ¶ 197), but they do not specify the basis for this belief, the discriminatory activities to which they are referring, or how the targeting was conducted. Plaintiffs also allege that “Defendants targeted minority homeowner borrowers with bogus financing terms and grossly unfair lending products for the sole purpose of sandbagging borrowers at closing by steering them into unsafe and unsound adjustable rate mortgage products at the eleventh hour.” (Id. ¶ 271). 16 According to Plaintiffs, these unfair loans “were aggressively marketed through Fremont’s network of brokers to the African-American homeowners.” (Id. ¶ 604.)
In addition, Plaintiffs allege that Fremont and WCS “targeted African-Americans for higher cost subprime mortgage loans, while directing Caucasian applicants, with the same qualifications after accounting for risk, into lower cost loans,” and that Plaintiffs themselves were targeted as part of this scheme. (Id. ¶¶ 556, 558.) Plaintiffs further assert, without providing any supporting facts, that “Defendants intentionally providing [sic] Plaintiffs with grossly inferior terms, conditions, and/or privileges of services in connection with the financing transaction on the basis of race and color.” (Id. ¶ 568.)
S. Post-Closing Events
Fremont transferred the servicing of Plaintiffs’ first mortgage to American’s Servicing Company (“ASC”) on February 1, 2006. (Compl. Ex. 9.) Plaintiffs also allege that this loan was “securitized and placed into a trust,” of which U.S. Bank is the trustee and current custodian. (Am. Compl. ¶¶ 281-82.) According to Plaintiffs, they made monthly payments exceeding $4,000 including taxes and insurance for eight months after the closing, at which point, having realized that they would be unable to refinance the loans, and having fallen behind in their bills and incurred substantial debt, they began unsuccessfully to try to modify the loans.
(Id.
¶¶ 55, 200.) Plaintiffs stopped making payments on their first mortgage in September 2006.
(Id.
¶ 84.) On December 26, 2006, U.S. Bank filed a foreclosure action against
On December 28, 2006, Plaintiffs sent a letter to ASC as a “formal notice” that they were exercising their right of rescission and cancelling their loan based on violations of TILA. (Compl. Ex. 8, at unnumbered page 1.) On January 2 and 8, 2007, Plaintiffs submitted letters to various state and federal agencies alleging TILA, HOEPA, RESPA, FHA, and ECOA violations by Fremont, U.S. Bank, and WCS. (Id. Ex. 10, at unnumbered pages 1, 7, 17, 21.) Plaintiffs allege that on or about March 7, 2007, the New York State Banking Department provided Plaintiffs with a copy of WCS’s response to their complaint, including copies of the various closing documents, mortgage application, and pre-disclosure documents, although Plaintiffs also allege that it was actually Fremont that submitted these documents to the Banking Department in response to Plaintiffs’ complaints. (Am. Compl. ¶¶ 287, 392, 397.) 18
B. Procedural Background
Plaintiffs, proceeding pro se, filed an initial complaint on January 31, 2008 against FGC, FIL, WCS, Tanenbaum, ASC, U.S. Bancorp, and U.S. Bank. (Dkt. No. 1.) Pursuant to the order of the Honorable John G. Koeltl, dated November 26, 2008 (Dkt. No. 47), Plaintiffs filed their Amended Complaint on December 12, 2008, (Dkt. No. 48). 19 Plaintiffs’ Amended Complaint added McBean, 3 Day Appraisal Services, Phil Aarons, David Abrams, Gailen Properties, Inc., GFI Mortgage Bankers, Inc., John and Jane Doe, and XYZ-1 and XYZ-2 Corporations as Defendants. (Dkt. No. 48.) On August 8, 2009, this case was reassigned to the undersigned. (Dkt. No. 89.) The Court held a conference with the Parties on October 27, 2009. (Dkt. No. 94.) On November 12, 2009, Plaintiffs voluntarily dismissed Defendants ASC, U.S. Bancorp, Phil Aarons, David Abrams, Gailen Properties, Inc., and GFI Mortgage Bankers, Inc., without prejudice. (Letter from Pis. to the Ct., dated Nov. 9, 2009 (Dkt. No. 95).) On March 3, 2010, Defendants WCS, U.S. Bank, and Fremont filed the instant motions to dismiss all of Plaintiffs’ claims in the Amended Complaint. (Dkt. Nos. 106, 110, 117.) The Court held oral argument on March 9, 2011, (Dkt. No. 121.)
A. Standard of Review
1. General Standards
“On a Rule 12(b)(6) motion to dismiss a complaint, the court must accept a plaintiffs factual allegations as true and draw all reasonable inferences in [the plaintiffs] favor.”
Gonzalez v. Caballero,
The Supreme Court has held that “[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiffs obligation to provide the grounds of his entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.”
Bell Atl. Corp. v. Twombly,
Generally, “[i]n adjudicating a Rule 12(b)(6) motion, a district court must confine its consideration to facts stated on the face of the complaint, in documents appended to the complaint or incorporated in the complaint by reference, and to matters of which judicial notice may be taken.”
Leonard F. v. Isr. Disc. Bank of N.Y.,
As previously mentioned, Plaintiffs attached numerous exhibits to their initial Complaint (Dkt. No. I), but appear mistakenly not to have attached them again to their Amended Complaint. In light of Plaintiffs’ pro se status, the Court will treat these exhibits as if they were attached to the Amended Complaint, and has considered them in deciding these motions to dismiss. 20
B. TILA Claim
As previously noted, Plaintiffs’ Amended Complaint contains seven federal and fifteen state causes of action. The Court will first consider the federal causes of action. In their eleventh cause of action, Plaintiffs claim that all of the Moving Defendants violated TILA, 15 U.S.C. § 1601 et seq., by failing to provide required material disclosures and by making “one or more material changes to the terms of the consumer credit transaction based upon forged signature [sic] and falsified information in the mortgage application and pre-disclosure documents.” (Am. Compl. ¶¶ 392-93.) For these alleged misdeeds, Plaintiffs seek rescission of their mortgages and monetary damages. (Id. ¶ 399.)
TILA was enacted by Congress to “assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit .... ” 15 U.S.C. § 1601(a);
see also Beach v. Ocwen Fed. Bank,
Plaintiffs seek rescission under 15 U.S.C. § 1635, which states that:
[e]xcept as otherwise provided in this section, in the case of any consumer credit transaction ... in which a security interest ... is or will be retained or acquired in any property which is used as the principal dwelling of the person to whom credit is extended, the obligor shall have the right to rescind the transaction until midnight of the third business day following the consummation of the transaction or the delivery of the information and rescission forms required under this section together with a statement containing the material disclosures required under this subchapter
15 U.S.C. § 1635(a). In addition to these requirements, the creditor is required to “clearly and conspicuously disclose” this rescission right.
Id.
However, certain types of transactions are specifically exempted from this right of rescission, including “a residential mortgage transaction.”
Id.
§ 1635(e)(1);
see also Ng v. HSBC Mortg. Corp.,
No. 07-CV-5434,
Plaintiffs allege that they never received the required rescission notices from Defendants, and therefore claim that they are now entitled to rescind the transaction. Defendants Fremont and U.S. Bank, however, assert that pursuant to § 1635(e), Plaintiffs’ had no right to rescind this transaction, and accordingly, Defendants were not required to provide notice of a right to rescind. (Mem. of Law in Supp. of Defs. Fremont Reorganizing Corporation f/k/a Fremont Investment & Loan, and Fremont General Corporation’s Mot. to Dismiss the Compl. Pursuant to Fed. R.Civ.P. 12(b)(6) and 11 U.S.C. 362(a) (“Fremont Mem.”) ¶ 30; Mem. of Law. in Supp. of Mot. to Dismiss the Am. Compl. Against Def. U.S. Bank, National Association, as Trustee for Master Asset Backed Securities Trust 2006-FRE-l (“U.S. Bank Mem.”) 16-17.)
The Court finds that the Amended Complaint and attached documents undisputedly establish that the funds Plaintiffs received from Fremont were used to finance the acquisition of the Newburgh home, and
2. Damages
The Moving Defendants also argue that Plaintiffs’ claim for monetary damages under TILA is time-barred. (Fremont Mem. ¶ 29; U.S. Bank Mem. 14-15; Def. WCS Lending, LLC’s Mem. of Law in Supp. of Mot. to Dismiss Pis.’ Am. Compl. (“WCS Mem.”) 13-14.) Private actions for damages based on TILA violations are subject to a one-year statute of limitations.
See Johnson v. Scala,
No. 05-CV-5529,
Plaintiffs assert that the limitations period for their TILA claims should be tolled, arguing “that because of the fraudulent concealment of material facts, they were prevented from learning about the misconduct(s) by WCS and Fremont and the forged documents in Fremont’s underwriting loan files until March 30, 2007.” (Pis.’ Mem. of Law in Opp’n to Defs., Fremont Reorganizing Corporation f/k/a/ Fremont Investment and Loan and Fremont General Corporation’s Mot. to Dismiss the Am. Compl. (“PI. Opp’n to Fremont”) at unnumbered page 9.) Plaintiffs also claim that they “allege that [D]efendants deceptively concealed its [sic] violations, and therefore, the equitable tolling doctrine should apply.” (Pis.’ Mem. of Law in Opp’n to Def., WCS Lending, LLC’s Mot. to Dismiss the Am. Compl. (“PI. Opp’n to WCS”) 13.)
“Equitable tolling is available in ‘rare and exceptional circumstances,’ where the court finds that ‘extraordinary circumstances’ prevented the party from timely performing a required act, and that the party ‘acted with reasonable diligence throughout the period he sought to toll.’ ”
Williams v. Aries Fin., LLC,
No. 09-CV-1816,
Here, although Plaintiffs state in their opposition to WCS’s motion that Defendants concealed their violations (PI. Opp’n to WCS 13) — as opposed to just the original nondisclosures — this is not alleged in the Amended Complaint; nor do Plaintiffs specify which Defendants concealed the violations, or how they were concealed. The Amended Complaint does state that Plaintiffs did not discover the forged and falsified documents until March 7, 2007, when either WCS or Fremont allegedly submitted the documents to the New York State Banking Department in response to complaints Plaintiffs filed with various federal and state regulatory agencies. (Am. Compl. ¶¶ 287, 392, 397.) However, Plaintiffs do not allege that Defendants did anything to fraudulently conceal these documents, or the other purported TILA-violating nondisclosures, from Plaintiffs.
23
To warrant equitable tolling, Plaintiffs must plead that Defendants took some action to conceal the TILA violations during the one-year applicable statutory period following the consummation of the loan on October 12, 2005.
See McAnaney,
In addition, despite Plaintiffs’ assertion that they did not learn of the fraudulent documents until either March 7, 2007 (Am Compl. ¶ 392), or March 30, 2007 (PI. Opp’n to Fremont at unnumbered page 9), Plaintiffs submitted a letter to ASC on December 28, 2006, attempting to rescind the loan transaction due to TILA violations, (Compl. Ex. 8, at unnumbered page 1). Plaintiffs also submitted a letter to New York’s Banking Department, Office of the Attorney General, and other agencies on January 8, 2007, stating that the purpose of the letter was “to file a formal and official complaint” against WCS, Fremont, and U.S. Bank, for violations of HOEPA, TILA, and RESPA, and specifically asserting that Fremont and WCS submitted false documentation.
(Id.
Ex. 10, at unnumbered pages 21-23.) These letters demonstrate that Plaintiffs were aware of potential TILA violations more that a year prior to filing their initial Complaint in this case.
24
Thus, Plaintiffs have not currently pled facts that would entitle them to equitable tolling, and the statute of limitations bars their claim for monetary damages under TILA.
See Coveal,
Accordingly, Plaintiffs’ claims for rescission and damages pursuant to TILA are dismissed with prejudice. 26
C. HOEPA Claim
Plaintiffs’ twelfth cause of action, which is brought against all of the Moving Defendants, alleges HOEPA violations. (Am Compl. ¶ 408.) U.S. Bank argues that Plaintiffs’ mortgage is not a loan governed by HOEPA. (U.S. Bank Mem. 16.) This assertion is correct. “[A] HOEPA loan is defined under 15 U.S.C. § 1602(aa) as a mortgage that is a ‘consumer credit transaction that is secured by the consumer’s principal dwelling, other than a residential mortgage transaction ....’”
Johnson,
Plaintiffs’ sixteenth cause of action, brought against all of the Moving Defendants, alleges RESPA violations. Congress enacted RESPA “to effect certain changes in the settlement process for residential real estate that will result,” inter alia, “in more effective advance disclosure to home buyers and sellers of settlement costs” and “in the elimination of kickbacks or referral fees that tend to increase unnecessarily the costs of certain settlement services.” 12 U.S.C. § 2601(b). Plaintiffs allege that WCS and Fremont violated RESPA by (1) “giving or accepting kickbacks or other things of value in violation of 12 U.S.C. § 2607(a),” and (2) “giving a portion, split, or percentage of charges made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed, in violation of 12 U.S.C. § 2607(b).” (Am. Compl. ¶ 514.)
The Moving Defendants argue that Plaintiffs’ RESPA claim also is time-barred. (Fremont Mem. ¶ 32; WCS Mem. 18; U.S. Bank Mem. 19.) “Violations of Section 2607 of RESPA are subject to a one-year statute of limitations from the date of the occurrence of the violation.”
Done v. HSBC Bank USA
No. 09-CV-4878,
E. FHA Claim
Plaintiffs’ eighteenth cause of action, brought against all of the Moving Defendants, alleges violations of the FHA, which provides that “it shall be unlawful ... [t]o discriminate against any person in the
Plaintiffs allege that Fremont and WCS “targeted African-Americans for higher cost subprime mortgage loans, while directing Caucasian applicants, with the same qualifications after accounting for risk, into lower cost loans,” and that Plaintiffs themselves were targeted as part of this scheme. (Am. Compl. ¶¶ 556, 558.) Plaintiffs claim that Fremont and WCS “engaged in a pattern or practice of discrimination” based on race, or that, alternatively, their facially neutral policies “had a discriminatory effect and created statistical disparities,” which will continue to have a disparate impact on other African-Americans. {Id. ¶¶ 559-60, 564.) Plaintiffs further allege that “Defendants intentionally provid[ed] Plaintiffs with grossly inferior terms, conditions, and/or privileges of services in connection with the financing transaction on the basis of race and color.” {Id. ¶ 568.) 30
Defendants argue that Plaintiffs’ FHA claim also must be dismissed as time-barred. (WCS Mem. 19; U.S. Bank Mem. 21.) Claims brought pursuant to the FHA are subject to a two-year statute of limitations. 42 U.S.C. § 3613(a)(1)(A) (“An aggrieved person may commence a civil action ... not later than 2 years after the occurrence or the termination of an alleged discriminatory housing practice.”);
see also Williams v. N.Y.C. Hous. Auth.,
No. 07-CV-7587,
Thus, the limitations period for this claim expired on October 12, 2007, approximately three-and-a-half months before Plaintiffs filed this action.
See Davenport v. Litton Loan Servicing, LP,
First, equitable tolling cannot apply here. As already discussed, to toll a limitations period, a plaintiff must allege that the defendant concealed the cause of action’s existence, and that the plaintiff remained unaware of it until some point within the applicable statutory period of commencing the action.
See Cardiello,
Second, the continuing violation doctrine is also inapplicable. “The ‘continuing violation’ doctrine applies when a plaintiff challenges ‘not just one incident of
Here, the Amended Complaint refers to a “pattern or practice of discrimination on the basis on [sic] race” (Am. Compl. ¶ 559), asserts that WCS “routinely targeted] its fraudulent activities to members of African-American communities” (id. ¶ 540), and alleges that “Fremont continue [sic] to provide mortgage loans to Caucasian applicants with similar qualifications on significantly more favorable terms,” (id. ¶ 564). However, these statements, culled together, are insufficient to plead a continuing violation. Plaintiffs allege no act, taken against them by any Defendant after October 12, 2005, that could state a claim under the FHA. Moreover, Plaintiffs have failed to allege facts (as opposed to conclusory legal claims) establishing that any Defendant had a specific discriminatory policy that violates the FHA, or directed acts towards any specified person other than Plaintiffs, that violated the FHA. The Amended Complaint includes detailed statistics and research regarding purported systematic racial discrimination in lending practices. (Id. ¶¶ 5-7, 11-14.) Yet, it does not contain allegations against these specific Defendants that would justify applying the continuing violation doctrine.
The courts that have found a continuing violation of the FHA have done so in cases involving multiple plaintiffs alleging multiple, specific, and ongoing acts of discrimination, on specific dates, as opposed to general assertions that the defendants engaged in discriminatory practices, as the Plaintiffs have pleaded in the present action.
See, e.g., Barkley,
In their nineteenth cause of action, Plaintiffs allege that the Moving Defendants violated the ECOA, which makes it “unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction [ ] on the basis of race ...15 U.S.C. § 1691(a)(1). 34 Plaintiffs allege that Fremont and WCS violated ECOA by “knowingly targeting members of Plaintiffs’ race and gender, and steering them to the extension of mortgage financing in a principal amount known to exceed the fair market value of the property, on terms that are onerous to the borrower, but highly profitable to the Defendants,” thereby inducing Plaintiffs to enter into unfair mortgage loans. (Am. Compl. ¶¶ 582-83.) Plaintiffs also allege that they “were systematically and continuously extend [sic] mortgage credit by Defendants on a discriminatory basis,” citing the Order to Cease and Desist Fremont received from the FDIC on March 7, 2007 (id. ¶ 597), and claim that Fremont and WCS “will continue to engage in conduct that disregards the rights of African-Americans,” (id. ¶ 598). 35
Defendants argue that Plaintiffs’ ECOA claim is also time-barred. (WCS Mem. 21; U.S. Bank Mem. 25.) The ECOA provides that no private action “shall be brought later than two years from the date of the occurrence of the violation.” 15 U.S.C. § 1691e(f);
see also Coveal,
Plaintiffs have failed to establish that equitable tolling is justified here. As previously discussed, for equitable tolling to apply, Plaintiffs must plead that Defendants concealed from Plaintiffs the existence of their ECOA cause of action.
See Cardiello,
Accordingly, the Court concludes that Plaintiffs’ ECOA claim is untimely, and must be dismissed as against all Defendants with prejudice. 38
G. Civil Rights Act Claims
Plaintiffs’ twentieth cause of action asserts violations of 42 U.S.C. §§ 1981, 1982, and 1985(3) against all of the Moving Defendants. These claims are subject to a three-year statute of limitations, and accordingly, are timely.
See Mian v. Donaldson, Lufkin & Jenrette Secs. Corp.,
Here, the Moving Defendants each argue that Plaintiffs fail to allege specific facts indicating that Defendants intentionally discriminated against Plaintiffs because of their race. (Fremont Mem. ¶¶ 65, 68-69; WCS Mem. 22-23; U.S. Bank Mem. 26.) Plaintiffs have not responded to these arguments in any of their opposition papers. However, the Court has still examined the Amended Complaint to determine if it sufficiently states a claim for this cause of action.
Plaintiffs allege that Fremont and WCS “intentionally discriminated against Plaintiffs by ... charging them higher interest rates than those charges [sic] to similarly-situated Caucasian mortgagees,” and that unfair loans “were aggressively marketed through Fremont’s network of brokers to the African-American homeowners.” (Am. Compl. ¶ 604.) Plaintiffs further claim that Tanenbaum used a “race-based” sales pitch (id. ¶¶ 146-47), and that Defendants targeted its discriminatory activities against minorities (id. ¶¶ 197, 271), without explaining how this targeting was conducted, or providing examples. Indeed, Plaintiffs do not specifically allege that Defendants took these purportedly discriminatory actions, or intended to take these actions, because Plaintiffs were African-American. Nor do Plaintiffs provide any facts in support of their contention that intentional discrimination occurred. 40
Even after
Boykin,
these types of eonclusory allegations of discrimination, unsupported by specific factual allegations, have been found insufficient to state a claim under §§ 1981 and 1982.
See Sanders,
“Section 1985(3) prohibits two or more persons from conspiring for the purpose of depriving any person of the equal protections of the laws.”
Barkley,
Plaintiffs allege that Defendants’ “pattern of actions [that violated §§ 1981 and 1982] constitute a conspiracy for the purpose of depriving [P]laintiffs of the equal protection of the laws, or of equal privileges and immunities of the laws of the United States in violation of 42 U.S.C. § 1985(3).” (Am. Compl. ¶ 607.) Once again, Plaintiffs have failed to plead anything close to factual allegations that plausibly demonstrate that the Moving Defendants acted with intentional racial animus. This type of conclusory statement, which “consists] of little more than the bare language of the statute[ ],” is insufficient to withstand a motion to dismiss.
See Ng,
Accordingly, Plaintiffs’ §§ 1981, 1982, and 1985(3) claims are dismissed without prejudice as to WCS and Fremont, but with prejudice as to U.S. Bank. 42
H. Civil RICO Claims
Plaintiffs also assert Civil RICO violations of 18 U.S.C. § 1962(a), (c), and (d), against only WCS and Fremont, but not U.S. Bank.
43
“RICO is a broadly worded statute that has as its purpose the elimination of the infiltration of organized crime
“To establish a RICO claim, a plaintiff must show: (1) a violation of the RICO statute, 18 U.S.C. § 1962; (2) an injury to business or property; and (3) that the injury was caused by the violation of Section 1962.”
Spool v. World Child Int’l Adoption Agency,
A “ ‘pattern of racketeering activity’ requires at least two acts of racketeering activity.” 18 U.S.C. § 1961(5). The acts constituting the pattern must be among the criminal offenses listed in § 1961(1), which include violations of the mail fraud statute, 18 U.S.C. § 1341, and the wire fraud statute, 18 U.S.C. § 1343.
45
Additionally, the acts must be “related, and ... [either] amount to or pose a threat of continuing criminal activity.”
Cofacredit, S.A. v. Windsor Plumbing Supply Co.,
Thus, closed-ended continuity is established by “a series of related predicates extending over a substantial period of time,”
H.J. Inc. v. Nw. Bell Tel. Co.,
In contrast, open-ended continuity requires “a threat of continuing criminal activity beyond the period during which the predicate acts were performed.”
Cofacredit,
Here, Plaintiffs allege that an enterprise, consisting of an association in fact of Fremont, WCS, their agents, and other parties previously terminated as Defendants in this case, “operated separately and distinct from each individual RICO Defendant ... to implement and conduct the ‘Mortgage Fraud,’ which has been operated over the course of at least a two-year period through the use of mail, wire, and tax fraud, and the collection of unlawful fees, and involving hundreds of vie
These allegations do not establish a pattern of racketeering activity that meets the requirements for either closed-ended or open-ended continuity. Plaintiffs have not sufficiently alleged close-ended continuity, because they have not adequately pled predicate acts over a period of at least two years, the amount of time the Second Circuit has generally found necessary to establish close-ended continuity.
See Spool,
Additionally, Plaintiffs have not established open-ended continuity — which requires a threat of ongoing, continuing criminal activity — because they specifically allege that the enterprise ended in 2006. (7km. Compl. ¶¶ 639, 664.)
See Purchase Real Estate,
Subject matter jurisdiction over Plaintiffs’ state law claims is alleged based on supplemental jurisdiction. (Am. Compl. at unnumbered page 2.) A “district court[] may decline to exercise supplemental jurisdiction over a claim ... if ... [it] has dismissed all claims over which it has original jurisdiction .... ” 28 U.S.C. § 1367(c)(3). “Once a district court’s discretion is triggered under § 1367(c)(3), it balances the traditional values of judicial economy, convenience, fairness, and comity, in deciding whether to exercise jurisdiction.”
Kolari v. N.Y.-Presbyterian Hosp.,
Here, the Court has currently dismissed all of Plaintiffs’ federal claims. Because the Court grants Plaintiffs leave to amend some of their federal claims, the Court finds that judicial economy, convenience, and fairness would not be served by this Court exercising supplemental jurisdiction over Plaintiffs’ state law claims until Plaintiffs have adequately alleged a federal cause of action, and to do so would be inconsistent with the principle of comity. This is particularly true in light of the pending foreclosure action in state court, in which Plaintiffs have asserted some of these state law claims as affirmative defenses.
See Q Mktg. Grp., Ltd. v. P3 Int’l Corp.,
No. 05-CV-261,
III. Conclusion
For the reasons discussed above, the motions to dismiss of Fremont, WCS, and U.S. Bank are granted in part. Fremont’s motion to dismiss the Amended Complaint against FGC pursuant to 11 U.S.C. § 362(a) is denied as moot. Plaintiffs’ TILA, HOEPA, RESPA, FHA, ECOA, and Civil RICO claims are dismissed with prejudice as to all Moving Defendants. However, given Plaintiffs’ pro se status, the Court will allow Plaintiffs to amend their Civil Rights Act claims to attempt to cure the deficiencies in the Amended Complaint as to Fremont and WCS. Therefore, Plaintiffs’ Civil Rights Act claims are dismissed without prejudice as to Fremont
SO ORDERED.
Notes
. Plaintiffs have also named as Defendants "John Doe" and "Jane Doe,” and XYZ-1 Corporation and XYZ-2 Corporation, as fictitious names of individuals or entities "having any involvement in the fraud perpetrated on Plaintiffs.”
The following Defendants named in the Amended Complaint have also been terminated from this action: America’s Service Company ("ASC”), U.S. Bancorp, Phil Aarons, David Abrams, Gailen Properties, Inc., and GFI Mortgage Bankers, Inc. (Dkt. No. 95.)
The Court notes that according to the docket, Defendants Tanenbaum, McBean, and 3 Day Appraisal Services have never been served in this action, and have not appeared.
. The state law claims include professional negligence and negligent training and supervision, fraudulent misrepresentation, negligent misrepresentation, breach of fiduciary duly, fraud and deceit, common law fraud, constructive fraud, equitable fraud, civil conspiracy to commit fraud; violations of N.Y. Gen. Bus. L. § 349, N.Y. Banking L. §§ 6-1 & 598, and N.Y. Exec. L. § 296; and class action claims for violation of the Donnelly Act, unfair and deceptive business practices, and unjust enrichment.
However, as Plaintiffs have acknowledged, "[a]
pro se
plaintiff may not seek to represent the interests of third-parties.”
Williams v. Citibank, N.A.,
Plaintiffs have not asserted each of their twenty-two causes of action against every De
.Fremont also moved to dismiss the claims against FGC under 11 U.S.C. § 362(a). FGC filed a petition for Chapter 11 bankruptcy on June 18, 2008, in the United States Bankruptcy Court for the Central District of California, Santa Ana Division. (Dkt. No. 36.) Fremont argued that by filing the Amended Complaint on December 12, 2008 (Dkt. No. 48), and serving it on FGC, Plaintiffs violated 11 U.S.C. § 362(a), which states that filing a bankruptcy petition stays the continuation of a judicial action that was commenced against the debtor before the commencement of the bankruptcy case. (Mem. of Law in Supp. of Defs. Fremont Reorganizing Corporation flk/a Fremont Investment & Loan, and Fremont General Corporation’s Mot. to Dismiss the Compl. Pursuant to Fed.R.Civ.P. 12(b)(6) and 11 U.S.C. 362(a) ¶¶ 85-86.) Fremont has since informed the Court that FGC emerged from bankruptcy on May 25, 2010 (Dkt. No. 125), and at oral argument withdrew this argument. Accordingly, Fremont’s motion to dismiss the Amended Complaint against FGC pursuant to 11 U.S.C. § 362(a) is denied as moot.
. Plaintiffs later state that they earned $131,000 per year. (Am. Compl. ¶¶ 163, 166.)
. Tanenbaum is now deceased. (Am. Compl. ¶ 46.)
. According to the Amended Complaint, 3 Day Appraisal Services, which is currently named as a Defendant but has not been served in this action, has a New York address. (Am. Compl. ¶ 50.)
. It is unclear when Plaintiffs first began working with Tanenbaum. Plaintiffs first allege that they found him through an internet search on September 6, 2005 (Am. Compl. ¶ 140), and that Tanenbaum emailed them to introduce himself and WCS on September 7, 2005, (id. ¶ 141). However, Plaintiffs also state that they had several discussions with Tanenbaum in late August and early September 2005. (Id. ¶ 149.) Plaintiffs also allege that they decided to purchase the Newburgh home after these discussions, although Plaintiffs previously stated that they had already signed the sale contract on August 1, 2005. (Id.)
. Plaintiffs allege that Tanenbaum told them that they were getting a no-documentation loan because they had good credit, and that they would have no problem being approved for the requested loan because of their salary. (Am. Compl. ¶ 166.)
. Plaintiffs attached numerous exhibits to their initial Complaint. (Dkt. No. 1.) However, although the Amended Complaint continues to refer to these exhibits, Plaintiffs did not actually attach them to their amended filing. Given Plaintiffs’ pro se status, the Court will treat these exhibits as if they were attached to the Amended Complaint.
. As explained
infra,
the Court declines to address Plaintiffs' state law claims at this time, and as such, need not address the merits of Plaintiffs’ fraud claim in this Opinion. However, the Court does note that allegations of fraud are not supposed to be pled upon information and belief, unless the fraud alleged is “peculiarly within the opposing party's knowledge, in which event the allegations must be accompanied by a statement of the facts upon which the belief is based.”
DiVittorio v. Equidyne Extractive Indus., Inc.,
. However, Fremont sent a letter to Plaintiffs at their St. Albans home, dated October 11, 2005, stating that Fremont had delivered a counter-offer to WCS as Plaintiffs’ broker on September 16, 2005, and seeking to confirm that Plaintiffs had received it. (Compl. Ex. 7.) Plaintiffs make no mention of recéiving this notice in their Amended Complaint (though it is attached to Plaintiffs' Complaint), and instead state that "[a]t no point in time, were ... Plaintiffs aware that the mortgage loans had been approved on September 16, 2005,” and that Tanenbaum, Fremont, and WCS intentionally concealed that the loan had been approved, and on what terms. (Am. Compl. ¶¶ 220, 227-29.)
. Plaintiffs allege that Tanenbaum had "informed [ ] Plaintiffs that he needed a Residential House Lease to support their mortgage application,” in case the St. Albans home was not sold prior to the closing date on the Newburgh home; however, Plaintiffs claim that they "strongly opposed any suggestion” that they had rental income, and did not provide a lease. (Am. Compl. ¶¶ 216-17.) Plaintiffs also allege that WCS then provided "loan application and related disclosure documents for Plaintiffs to sign that falsely indicated that they were earning 'rental income' from their [St. Albans] home.” (Id. ¶ 157.) However, Plaintiffs do not dispute that they signed these documents on September 20, 2005, nor do they allege that they did not see the rental income listed. Plaintiffs do maintain that they never received rental income from the St. Albans home. (Id. ¶ 199.)
. Plaintiffs allege that at the closing, they learned that the interest rate was different than on the application that they signed, that the mortgage had become an ARM instead of fixed rate, and that there were fees that had not previously been discussed. (Am. Compl. ¶ 252.) However, as previously noted, despite Plaintiffs' assertions as to what they may have been told orally by Tanenbaum, Plaintiffs have not identified any application offering a fixed rate mortgage; instead, every application submitted with the Complaint, including those that Plaintiffs admit to seeing and signing before the closing, indicated that a 2/28 ARM loan was being offered.
. It is unclear who assured Plaintiffs that the documents were in order. Plaintiffs first allege that "Tanenbaum instructed and convince [sic] Plaintiffs to 'just sign’ and that '[they] would take care of that later’ ’’ (Am. Compl. ¶ 189), but later state that Tanenbaum was on vacation during the closing and that they were unable to reach him, (id. ¶ 253). Plaintiffs contend that after the closing, they "were worried that they had been pressured into a bad deal without being allowed to ... properly consult with their attorney” (id. ¶ 254), but they offer no details about the circumstances that prevented them from consulting with their lawyer.
. Plaintiffs first allege that Tanenbaum “played upon the Plaintiffs' race in an effort to convince them that he, as an American 'Jewish Broker' was motivated by a desire to help them obtain a home[][and] repeatedly invoked his own Jewish race and religious background to both disarm and reassure the Plaintiffs into believing that he would ‘never cheat them.' ” (Am. Compl. ¶ 57.) However, Plaintiffs later assert that “Tanenbaum assured [Plaintiffs] that as a fellow 'African American and Muslim,’ he would never 'cheat [them].' " (Id. II 185.)
. Plaintiffs do not specify which Defendants targeted certain borrowers, or how this targeting was conducted.
.On February 28, 2011, the Court issued an order inquiring into the current status of this foreclosure action. (Dkt. No. 126.) U.S. Bank has informed the Court that in November 2007, the Orange County Supreme Court denied U.S. Bank's motion for summary judgment and granted Plaintiffs' cross-motion to file an Amended Answer asserting an affirmative defense for fraud and misrepresentation. (Letter from Steven M. Hecht to the Ct., dated Mar. 3, 2011 (Dkt. No. 128).) In addition, after Plaintiffs filed the instant action in this Court in January 2008, U.S. Bank “elected to refrain from proceeding with the foreclosure action until this federal action is resolved.” (Id.) "Accordingly, the foreclosure action is currently pending, but is not being actively prosecuted by U.S. Bank at this time.” (Id.)
. The Amended Complaint contains numerous allegations regarding Fremont's general business practices; however, it does not allege that these specific practices were at issue in Plaintiffs’ mortgage. (Am. Compl. ¶¶ 86-97.) Plaintiffs also emphasize that on March 7, 2007, Fremont entered into an Order to Cease and Desist with the FDIC regarding Fremont's "unsafe or unsound banking practices and violations of law and/or regulations.” (Id. ¶¶ 98-103, 283-86; Compl. Ex. 11.) However, this Order is not addressed specifically to Plaintiffs or their loan.
. Judge Koeltl’s order also denied as moot, without prejudice to renewal, motions to dismiss filed by Defendants WCS, ASC, U.S. Bancorp, and U.S. Bank. (Dkt. No. 47.)
. Plaintiffs also have submitted a "Forensic Handwriting Analysis Expert Report” to support their contention that certain mortgage transaction documents were forged. (Aff. of Darrick Grimes in Supp. of Pis.’ Mem. of Law Ex. A.) However, this document was not attached to, referred to, nor integral to the Amended Complaint; thus, the Court will not consider it in deciding the instant motions to dismiss.
. "The provisions of TILA are applicable to creditors.”
Johnson v. Scala,
No. 05-CV-5529,
. "A closed-end credit transaction is one where the finance charge is divided into the term of the loan and incorporated into time payments, and includes a completed loan such as a mortgage or car loan.”
McAnaney v. Astoria Fin. Corp.,
No. 04-CV-1101,
. In addition, even if Plaintiffs did not see these particular documents until March 7, 2007, that does not change the fact that Plaintiffs were clearly advised of, and aware of, the loan terms at issue by October 12, 2005.
. Moreover, Plaintiffs received a reply from the New York State Office of the Attorney General, dated January 16, 2007, which explicitly states in bold, italicized type that the complaint submitted to the office has no effect on any statute of limitations that might apply to the claim. (Compl. Ex. 10, at unnumbered page 53.)
.Plaintiffs also argue that their TILA claim is timely because "the damages sought in the [A]mended [C]omplaint are defensive in nature because they are in the nature of recoupment against Fremont’s proof of claim." (Pis.’ Mem. of Law in Opp’n to Defs., U.S. Bank, N.A. as Trustee for the Master Asset Backed Securities Trust 2006-FRE-l Mot. to Dismiss the Am. Compl. at unnumbered pages 14-15.) Plaintiffs correctly note that, even after the one-year limitations period has expired, a debtor is not barred from asserting a TILA violation “in an action to collect the debt ... as a matter of defense by recoupment or set-off in such action.” 15 U.S.C. § 1640(e). However, this provision is inapplicable here. Despite Plaintiffs’ statement to the contrary, they are not asserting their TILA claim defensively, such as in a foreclosure action; but rather affirmatively, in an action that they commenced for damages. Thus, the recoupment exception does not save their untimely TILA claim.
See Moor v. Travelers Ins. Co.,
. Here, the December 28, 2006 and January 8, 2007 letters make amendment futile, because they demonstrate that Plaintiffs were aware of potential TILA violations more than a year before they filed this action.
. In addition, " ‘HOEPA ... is part of TILA, and as such, is barred by the same statute of limitations discussed above with respect to Plaintiff[s’j TILA claim.' ”
Done v. HSBC Bank USA,
No. 09-CV-4878,
. In their papers opposing the Moving Defendants' motions to dismiss, Plaintiffs address their equitable tolling argument only to their TILA claim; they do not specifically assert that their RESPA claim is subject to equitable tolling. However, in light of Plaintiffs' pro se status, the Court has still considered whether equitable tolling could apply to their RESPA claim.
. As discussed with respect to Plaintiffs' TILA damages claim, amendment would be futile given the existence of the January 8, 2007 letter demonstrating Plaintiffs’ knowledge of an alleged RESPA violation more than a year before they filed this action.
. The Amended Complaint also contains a few references to discrimination based on gender. (Am. Compl. ¶¶ 559, 563, 567, 576, 582, 591.) However, Plaintiffs plead no facts suggesting gender discrimination, and focus their pleadings on racial discrimination.
. Because Plaintiffs fail to allege any discriminatory conduct by U.S. Bank, this cause of action is dismissed as to U.S. Bank on this ground, independent of the statute of limitation grounds discussed below.
. The Moving Defendants argued that Plaintiffs' FHA claim should be dismissed both on statute of limitations grounds, and on the merits. Plaintiffs responded to neither argument in any of their three opposition briefs. In fact, Plaintiffs’ opposition papers fail to address, or even mention, their race discrimination claims brought pursuant to the FHA, the ECOA, and the Civil Rights Act, or Defendants' asserted grounds for dismissal of those claims, in any way whatsoever. In similar situations, courts have deemed such claims to be abandoned and dismissed them accordingly.
See Done,
. Even if Plaintiffs' FHA claim was not time-barred, it also suffers from serious deficiencies on the merits. Plaintiffs' FHA claim is based on a theory of reverse redlining, which "occurs when a lender unlawfully discriminates by extending credit to a neighborhood or class of people (typically living in the same neighborhood) on terms less favorable than would have been extended to people outside the particular class at issue.”
Wiltshire v.
Here, Plaintiffs have not alleged that they were qualified for a fairly-administered loan; instead they admit that their initial mortgage financing application was denied by Washington Mutual. (Am. Compl. ¶ 139.) In addition, Plaintiffs assert that WCS targeted African-Americans, but provide no facts indicating how this targeting was conducted — in contrast to properly-pled reverse redlining claims, where the complaint contained
detailed
allegations of targeting by advertising and minority-focused outreach.
See Barkley,
. The Amended Complaint actually does not list WCS as a party against which this cause of action is asserted, but given that the paragraphs included under this cause of action mention WCS extensively, the Court assumes that this was an oversight by Plaintiffs. Indeed, WCS has addressed Plaintiffs' ECOA claim in its motion to dismiss.
. As previously mentioned, Plaintiffs fail to allege any discriminatory conduct by U.S. Bank; accordingly, the ECOA claim is dismissed as to U.S. Bank on that ground alone.
. The
Trakansook
court noted that "[s]ome district courts have applied the 'federal discovery rule' to ECOA claims.”
Trakansook,
. Plaintiffs appear to cite the FDIC Cease & Desist Order, dated March 7, 2007, as proof that Defendants systematically extended credit to Plaintiffs on a discriminatory basis. (Am. Compl. ¶ 597.) However, such reliance is misplaced. Although the FDIC Order might demonstrate widespread unsound practices by Fremont, it does not establish a racially discriminatory practice, or a continuing violation of the ECOA, as the FDIC Order makes no mention of race or discrimination. (Compl. Ex. 11.)
. Additionally, Plaintiffs’ ECOA claim is also a reverse redlining claim, and therefore on the merits shares the same deficiencies as did their FHA claim. Plaintiffs do not adequately allege that they were qualified for the loan they say they should have received; nor do they plead facts, as opposed to conclusoiy assertions, indicating either that they were intentionally targeted because of their race, or that non-African-American buyers received better terms than Plaintiffs’ received. Instead, Plaintiffs generally state that African-Americans received worse terms than Caucasians, and otherwise recite the elements of a reverse redlining claim as formulaic assertions of legal conclusions.
. Of course, this is not to suggest that there is a heightened pleading requirement for claims of racial animus.
See Swierkiewicz v. Sorema N.A.,
. Again, Plaintiffs have utterly failed to allege any discriminatory conduct by U.S. Bank, nor are any of their allegations directed at U.S. Bank. Therefore, Plaintiffs claims under the Civil Rights Act are dismissed against U.S. Bank with prejudice.
. Plaintiffs have also included in their Amended Complaint a lengthy discussion of allegedly systematic racial discrimination in lending practices and the entire housing industry. (Am. Compl. ¶¶ 5-7, 11-14.) However, these statements do not indicate that these particular Defendants committed intentionally racially discriminatory acts in general, let alone directed at these Plaintiffs.
. Because Plaintiffs’ Civil Rights Act claims are timely, but deficient as currently pled, these claims are dismissed without prejudice to allow Plaintiffs to amend their complaint to add allegations demonstrating that Defendants intentionally discriminated against them because of racial animus. For example, at oral argument, Plaintiff Darrick Grimes referred to statistics allegedly demonstrating that Fremont targeted residents in Plaintiffs’ zip code, which is predominantly African-American. If Plaintiffs choose to amend, they should add this, and other specific, non-conclusory allegations, to the extent they exist. However, Mr. Grimes offered no hint of any additional allegations Plaintiffs could make as to U.S. Bank, which had nothing to do with offering loans to Plaintiffs.
. Section 1962(a) provides that ’’[i]t shall be unlawful for any person who has received any income derived, directly or indirectly, from a pattern of racketeering activity ... in which such person has participated as a principal ... to use or invest, directly or indirectly, any part of such income, or the proceeds of such income, in acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce.” 18 U.S.C. § 1962(a).
Section 1962(c) provides that "[i]t shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate [] commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt.” 18 U.S.C. § 1962(c).
Section 1962(d) provides that ”[i]t shall be unlawful for any person to conspire to violate any of the provisions of subsection (a), (b), or (c) of this section.” 18 U.S.C. § 1962(d).
. Fremont also asserts that Plaintiffs have failed to allege that it committed any predicate criminal acts as required by the RICO statute. (Fremont Mem. ¶¶ 77-78.) WCS additionally argues that: (i) Plaintiffs'§ 1962(a) claim fails because they have not properly alleged that they were harmed by any supposed investment itself; (ii) Plaintiffs' § 1962(c) claim fails because the acts they allege WCS committed do not constitute criminal predicate acts, and Plaintiffs cannot establish fraudulent intent by WCS or reliance by Plaintiffs; and (iii) Plaintiffs’ § 1962(d) claim fails because it is predicated on a violation of one of the other substantive sections of the provision. (WCS Mem. 26 — 28.)
. "The elements of mail and wire fraud are: (1) a scheme to defraud, (2) money or property as the object of the scheme, and (3) the use of the mails or wires to further the scheme.”
Atkins v. Apollo Real Estate Advisors, L.P.,
No. 05-CV-4365,