Full opinion text
MEMORANDUM OPINION AND ORDER REGARDING DEFENDANTS’ MOTIONS TO DISMISS AND PLAINTIFF SCHUSTER’S MOTION FOR LEAVE TO FILE A THIRD AMENDED AND SUBSTITUTED COMPLAINT BENNETT, Chief Judge. TABLE OF CONTENTS I.INTRODUCTION AND BACKGROUND .1075 A. Procedural Background.1075 B. Factual Background.1078 1. Relationships of the parties .1078 2. Yournet related entities & the Witherspoon affair .1078 3. Plaintiffs’ investments in Yournet related entities and the Witherspoon affair.1079 II. LEGAL ANALYSIS.1081 A. Rule 12(b)(6) Standards .1081 B. Civil RICO Claims — Counts XIV-XVI.1083 1. The RICO claims generally.1083 2. Pleading fraud with particularity.1084 a. Arguments of the parties.1084 b. The law.1086 c. The Complaint.1088 d. Analysis.1088 i. Wire transfers.1089 ii. Circumstance constituting fraud.1092 3. Pleading the “enterprise” requirement. 1094 a. Arguments of the parties.1094 b. The law.1095 c. The Complaint.1097 d. Analysis.1097 4. Respondeat superior theory of liability against ASB.1099 a. Arguments of the parties.1099 b. The law.1100 c. Analysis.1102 5. Ultimate disposition of RICO claims .1105 C. Breach of Fiduciary Duty Claims — Counts TV & XX.1106 1. The Complaint.1106 2. Arguments of the parties.1106 3. Breach of fiduciary duty under Iowa law .1108 4. Analysis.1109 D. Fraudulent Misrepresentation And Fraudulent Nondisclosure— Counts VI & VII .1110 1. The Complaint.1110 2. Arguments of the parties.1111 3. Fraudulent misrepresentation and fraudulent nondisclosure under Iowa law.1112 4. Analysis.1113 E. Subject Matter Jurisdiction — Counts I, II & III.1114 1. The Complaint.1114 2. General law regarding subject matter jurisdiction.1115 3. Arguments of the parties.1116 a. Arguments for dismissal.1116 i. The Carl Anderson defendants.1116 ii. The Anderson defendants.1117 b. The plaintiffs’ arguments in resistance.1117 c. The Anderson, and Carl Anderson, defendants’ reply.1119 4. Analysis.1119 F. Plaintiff Schuster’s Motion For Leave To Amend.1122 III. CONCLUSION.1123 I. INTRODUCTION AND BACKGROUND A. Procedural Background On September 21, 2004, plaintiffs Orville Schuster (“Schuster”) and William Schlichte (“Schlichte”) filed a complaint against defendants American State Bank (“ASB”), Cal Cleveringa (“Cleveringa”) and Fay Anderson (“Anderson”) alleging ten causes of action. (Doc. No. 2). The defendants each proceeded to file motions to dismiss in October and early November 2004. (Doc. Nos.9, 10,14). Following several extensions of time in which to file their resistances, as well as the withdrawal of counsel due to conflicts of interest with the defendants, a status conference was held by United States Magistrate Judge Paul A. Zoss. Following the status conference, Judge Zoss ordered that issues surrounding Schlichte’s legal representation be resolved by February 1, 2005, giving the plaintiffs until February 15, 2005, in which to file amended complaints, and denying the outstanding motions to dismiss without prejudice. (Doc. No. 42). On February 15, 2005, Schuster, Schlichte and newly-added plaintiffs Schuster Co. and Lemars Truck & Trailer, Inc. (“LTT”), filed a Second Amended and Substituted Complaint (“Complaint”) which alleged twenty counts against original defendants Anderson, Cleveringa and ASB, as well as newly added defendants F.H. Anderson Company, P.C., F.H. Anderson Company, Carl Anderson, Anderson Accounting & Tax Services, Inc., and William & Company, C.P.A. (Doc. No. 44). The twenty causes of action asserted are as follows: I. Schuster’s professional negligence claim against defendants Anderson, F.H. Anderson Company, P.C. and F.H. Anderson Company; II. Schuster Co.’s professional negligence claim against defendants Anderson, F.H. Anderson Company, P.C., F.H. Anderson Company, Carl Anderson, and Anderson Accounting & Tax Services, Inc.; III. LTT’s professional negligence claim against Carl Anderson and Anderson Accounting & Tax Services, Inc.; IV. Schuster’s breach of fiduciary duty claim against Anderson, F.H. Anderson Company, P.C. and F.H. Anderson Company; V. Schuster and Schlichte’s breach of fiduciary duty claim against Cleve-ringa and ASB; VI. Schuster’s claim for fraudulent misrepresentation against Anderson, F.H. Anderson Company, P.C. and F.H. Anderson Company; VII. Schuster’s fraudulent nondisclosure claim against Anderson, F.H. Anderson Company, P.C. and F.H. Anderson Company; VIII. Schuster and Schlichte’s fraudulent misrepresentation claim against Cleveringa and ASB; IX. Schuster and Schlichte’s fraudulent nondisclosure claim against Cleve-ringa and ASB; X. Schuster’s claim for negligent misrepresentation against Anderson, F.H. Anderson Company, P.C. and F.H. Anderson Company; XI. Schuster and Schlichte’s negligent misrepresentation claim against Cleveringa and ASB; XII. Schuster and Schlichte’s claim for fraud in the inducement based on fraudulent misrepresentations by ASB; XIII. Schuster and Schlichte’s claim for fraud in the inducement based on fraudulent nondisclo-sures; XIV. Schuster and Schlichte’s claim of an 18 U.S.C. § 1962(b)-Racketeer Influenced and Corrupt Organizations Act (“RICO”) violation by Anderson, F.H. Anderson Company, P.C., F.H. Anderson Company, Cleveringa and ASB; XV. Schuster and Schlichte’s claim of an 18 U.S.C. § 1962(c)-RICO violation by Anderson, F.H. Anderson Company, P.C. F.H. Anderson Company, Cleveringa and ASB; XVI. Schuster and Schlichte’s claim of an 18 U.S.C. § 1962(d)-RICO violation by Anderson, F.H. Anderson Company, P.C. F.H. Anderson Company, Cleveringa and ASB; XVII. Schuster and Schlichte’s claim for negligent supervision against Anderson, F.H. Anderson Company, P.C. and F.H. Anderson Company; XVIII. Schuster and Schlichte’s negligent supervision claim against ASB; XIX. Schlichte’s breach of contract claim against Anderson; XX. Sehlichte’s breach of fiduciary duty claim against Anderson, F.H. Anderson Company, P.C. and F.H. Anderson Company. The Complaint alleges that this court has subject matter jurisdiction by virtue of federal question jurisdiction, 28 U.S.C. § 1331, in light of the RICO claims, and supplemental jurisdiction under 28 U.S.C. § 1367 over the state law claims. On February 23, 2003, the plaintiffs filed a notice of voluntary dismissal of defendant Williams & Company, C.P.A. (Doc. No. 45). On March 16, 2005, defendants Carl Anderson and Anderson Accounting & Tax Services, Inc. filed a Motion to Dismiss Counts I, II, III, IV, V, VI, VII, VIII, IX, X, XI, XII, XIII, XIV, XV, XVI, XVII, XVIII, XIX and XX of Plaintiffs’ Second Amended and Substituted Complaint Pursuant to F.R.C.P. 12(h)(2)(3)(sic). (Doc. No. 52). Specifically, Carl Anderson and Anderson Accounting & Tax Services, Inc. assert that Counts I, and IV-XX should be dismissed for failure to state a claim upon which relief can be granted^ and that Counts II and III should be dismissed for lack of subject matter jurisdiction. On March 17, 2005, defendant Cleveringa filed a Renewed Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(B)(6), asserting that the RICO counts embodied in Counts XIV-XVI should be dismissed for failure to be plead with the particularity required by Federal Rule of Civil Procedure 9(b), and that as dismissal of the RICO claims would divest this court of subject matter jurisdiction, the remaining claims should likewise be dismissed. (Doc. No. 54). Also on March 17, 2005, defendant 'ASB filed a Renewed Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(6), which requested dismissal of Counts XIV-XVI with prejudice for failure to plead with particularity under Rule 9(b), and dismissal of the remaining counts without prejudice due to want of subject matter jurisdiction. (Doc. No. 55). Also on March 17, 2005, defendants Anderson, F.H. Anderson Company, P.C., and F.H. Anderson Company filed a Renewed Motion to Dismiss requesting dismissal of Counts I, II, IV, VI, VII, XIV, XV, and XVI with prejudice, and the remaining counts without prejudice for the various reasons outlined in their brief. (Doc. No. 55). The plaintiffs filed a combined resistance to all of the defendants’ motions to dismiss on April 4, 2005. (Doc. No. 58). Carl Anderson and Anderson Accounting & Tax Services, Inc., filed a reply on April 11, 2005. (Doc. No. 62). Anderson, F.H. Anderson Company, P.C., and F.H. Anderson Company filed a reply on April 12, 2005. (Doc. No. 64). ASB filed its reply on April 13, 2005. (Doc. No. 66). On May 3, 2005, the matter was reassigned to United States District Court Judge Robert W. Pratt for the Southern District of Iowa, out of an abundance of caution, as a juror selected for a criminal trial pending before the undersigned was related to a litigant in this matter. (Doc. No. 68). On June 21, 2005, following the completion of the criminal trial, this matter was transferred back to the undersigned and oral argument on the still-pending motions to dismiss was set. (Doc. No. 69). Oral argument on.the defendants’ motions to dismiss was held on June 30, 2005. At oral argument plaintiffs Schuster, Schuster Co., and LTT were represented by Terrence D. Brown of Hixson & Brown, P.C., in Clive, Iowa. Plaintiff Schlichte was represented by Timothy A. Clausen of Klass Stoik Mu-gan Villone Phillips Orzechowski Clausen & Lapierre L.L.P. in Sioux City, Iowa. ASB was represented by Edward M. Mansfield of Belin Lamson McCormick Zumback Flynn in Des Moines, Iowa, and Lloyd Bierma of Oostra Bierma & Schouten in Sioux Center, Iowa. Cleveringa was represented by John C. Gray of Heidman Redmond Fredregill Patterson Plaza Dykstra .& Prahl, L.L.P., in Sioux City, Iowa. Anderson, F.H. Anderson Company, P.C., and F.H. Anderson Company were represented by Robert Keith of Engles, Ketchum, Olson & Keith, P.C., in Omaha, Nebraska. Defendants Carl Anderson and Anderson Accounting & Tax Services, Inc. were represented by Michael R. Hellige of Hellige, Frey & Roe in Sioux City, Iowa. A bench trial in this matter is currently scheduled for July 31, 2006. B. Factual Background On a motion to dismiss, the court must assume all facts alleged in the plaintiffs complaint are true, and must liberally construe those allegations. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). Therefore, the following factual background is drawn from the plaintiffs’ Complaint in such a manner. 1. Relationships of the parties Defendant Anderson had acted as an accountant for Schuster, individually, and for Schuster’s businesses — plaintiffs LTT and Schuster Co. — for over twenty years. As Schuster’s accountant, Anderson routinely provided investment advice to Schuster and encouraged Schuster to invest his personal funds, or funds Schuster secured by bank loans, in particular investments. Anderson was aware that Schus-ter had suffered a stroke, and that it impaired his judgment and made him more susceptible to suggestion. Further, Anderson knew or should have known, from Schuster’s mannerisms and reactions, that Schuster trusted Anderson implicitly. Anderson also provided Schlichte with investment advice, and used his relationship with Schuster as leverage to entice Schlichte into making certain investments. Anderson, at all relevant times, was an employee, agent and/or owner of defendants F.H. Anderson Company, P.C. and F.H. Anderson Company. Over a significant period of time, Cleveringa' — who was Vice President of defendant ASB — also recommended certain investment options to the plaintiffs. Cleveringa was encouraged by senior management at ASB to locate credit-worthy borrowers for the purpose of extending personal and/or business loans to generate interest income for ASB. Cleveringa routinely advised that Schuster’s assets, Schlichte’s assets, or funds available via ASB loans to Schuster, be invested in entities in which Anderson had an interest. Schuster and Schlichte trusted Cleverin-ga — which was evinced by their mannerisms and lack of questioning of his judgment. Cleveringa and ASB were aware that Schuster had suffered a stroke and that it made him more susceptible to suggestion. Schlichte and ASB had a relationship spanning twenty-five years — as Schlichte maintained accounts, a line of credit and loans with ASB for the purpose of making investments. On eleven occasions between November 2000 and December 2002, ASB loaned money to Schuster for investment purposes, with the aggregate loan amount of approximately $2,121,077.67. Between May 2001 and February 15, 2005, Schuster has paid in excess of $475,122.32 in interest on these loans. In January 2004, ASB insisted that Schuster pay $785,912.85 on his outstanding loans through the cashing of his certificates of deposit, or by writing a check to ASB for that amount. Schus-ter made the payment, which resulted in a loss of his certificates of deposit. Defendant Carl Anderson is an accountant, and is likewise an employee, agent and/or owner of F.H. Anderson Company, P.C., F.H. Anderson Company and Anderson Accounting & Tax Services, Inc. 2. Yournet related entities & the With-erspoon affair Cleveringa, Anderson, non-defendant Chuck Hinnenkamp (“Hinnenkamp”) and other known and unknown individuals ere-ated a number of legal entities as investment vehicles. The Complaint alleges that all of these entities were created as part of a conspiracy to defraud investors generally, and the plaintiffs in particular. The entities listed as part of this fraudulent scheme, hereafter referred to in the aggregate as the ‘Yournet related entities,” are as follows: • Creative Marketing & Communications, Inc. (“Creative Marketing”)— formed around March 24,1997; Cleve-ringa was an officer, director and shareholder in Creative Marketing, and Anderson held an ownership interest in the entity. • Team Link L.L.C. (“Team Link”)— combined with Creative Marketing in late 1998. • World Wide Furniture Net, a/k/a WWFN (“WWFN”) — Anderson had a financial interest in WWFN. • Yournet — formed around October 1, 1998; shortly after its formation, the “net assets” of WWFN were transferred to Yournet in exchange for issuance of stock in Yournet to Anderson and Hinnenkamp. • Quan Capital Corporation — formed around November 7, 2000. • R-Chief • Zaba Industries Complaint, Doc. No. 44, at pp. 8-9, ¶¶ 42-48. ASB maintained several accounts for the Yournet related entities — specifically, Yournet, WWFN, and R-Chief. Cleverin-ga was the ASB officer responsible for each of these accounts. ASB’s senior management was, or should have been, aware of the Yournet related entities’ activity due to: (1) the volume of funds flowing-through the Yournet related entities’ accounts; (2) the fact that the accounts were overdrawn on more than one occasion; (3) Cleveringa devoted a significant number of working hours to the Yournet related entities’ accounts; (4) tax liens served on ASB in July 2002 for Yournet’s unpaid tax obligations; and (5) notice sent to ASB on August 30, 2003, by the United States Bankruptcy Court for the District of Minnesota that Yournet had filed for bankruptcy around July 25, 2002. During September 2002, ASB, Cleverin-ga and Anderson presented an investment opportunity to Schuster and Schlichte relating to investment in an alleged $600 million jury verdict awarded to Darry Witherspoon (“Witherspoon affair”). The purpose presented for the investment was to cover future expenses related to the lawsuit, with a promised return of between 500% and 1,000%. Cleveringa, Anderson and ASB had a financial interest in the Witherspoon affair by virtue of a series of promissory notes, executed by Darryl Witherspoon and/or Russ Barber, made payable to Creative Marketing. The Complaint contends that at the time Cleverin-ga, Anderson and ASB recommended the Witherspoon affair as an investment to Schlichte and Schuster, they knew or should have known that this investment opportunity was a fraud. 3. Plaintiffs’ investments in Yournet related entities and the Witherspoon affair Between approximately October 10, 1997, and early 2004, Cleveringa and Anderson induced Schuster to make significant “investments” in the Yournet related entities and the Witherspoon affair, as follows: • October 10, 1997' — $27,000 in Team Ink. • February 23, 1998 — $50,000 in Team Ink. • December 19, 1998 — $30,000 in WWFN, of which Anderson converted $5,000 for his own personal use. • March 3,1999 — $25,000 in WWFN. • July 8,1999 — $200,000 in Yournet. • March 18, 2000 — $10,000 in Yournet. • June 20, 2000 — $100,000 in Yournet. Funds were deposited into the R-Chief account at ASB, with $50,000 remitted to Yournet and the balance converted by Anderson for his own personal use. • September 28, 2000 — $25,000 in Your-net. • January 22, 2001 — $50,000 in Yournet. • May 17, 2001 — $50,000 in Yournet. • July 20, 2001 — $33,373 in Yournet. • September 20, 2001 — $12,000 in Your-net; entire amount converted by Anderson for his own personal use. • November 13, 2001 — $50,000 in Your-net; entire amount converted by Anderson for his own personal use. • December 27, 2001 — $15,000 in Your-net; entire amount converted by Anderson for his own personal use. • April 2, 2002 — $75,000 in Zaba Industries. • June 28, 2002 — $60,000 in R-Chief. • July 11, 2002 — -$25,000 in Yournet. • August 15, 2002 — $15,000 in Zaba Industries. • October 8, 2002 — $30,000 in the With-erspoon affair. • October 29, 2002 — $50,000 in R-Chief and/or the Witherspoon affair. • November 15, 2002 — $300,000 in R-Chief and/or the Witherspoon affair. • May 22, 2003 — $17,000 in Zaba Industries. • June 9, 2003 — $50,000 in Zaba Industries. • August 19, 2003 — $10,000 in Zaba Industries. • September 16, 2003 — $60,000 in an unknown investment through Anderson. • January 15, 2004 — $170,000 in an unknown investment through Anderson. In order to make a number of these investments, Schuster secured eleven loans through ASB — with Cleveringa acting as the loan officer. Additionally, Schuster pledged certain assets as collateral to ASB — specifically: (1) February 6, 2002— a warehouse and real estate worth at least $1,750,000 in order to obtain a new loan from ASB; (2) October 25, 2002 — ■ $692,889.12 in certificates of deposit as security on loans then owing to ASB; and (3) October 25, 2002 — all of Schuster’s personal assets on loans then owing to ASB. Schuster’s total investment in the Yournet related entities and the Witherspoon affair was $1,748,873.80. Complaint at ¶ 62. Cleveringa, Anderson and ASB also induced Schlichte to make the following investments in the Yournet related entities and the Witherspoon affair: • February 28, 1997 — $15,000 in Creative Marketing. • June 17, 1997 — $10,000 in Creative Marketing. • November 25, 1997 — $5,000 in Creative Marketing. • February 13, 1998 — $2,000 in Creative Marketing. • October 29, 1998 — $25,000 in Sports Mailbox, a fraudulent entity in which Cleveringa held an ownership interest. • October 18, 1999 — $50,000 in Sports Mailbox. • May 3, 2000 — $15,000 in Yournet. • February 4, 2001 — $100,000 (entity not listed). • April 5, 2001 — $5,000 in Sports Mailbox. • July 27, 2001 — $5,000 in Sports Mailbox. • October 12, 2001 — $5,000 in Sports Mailbox. • October 17, 2001 — $120,000 in Sports Mailbox. • October 18, 2001 — $15,000 in Sports Mailbox. • November 5, 2002 — $50,000 in Creative Marketing. • December 18, 2002 — $50,000 in R-Chief. • January 30, 2003 — $175,000 in the Witherspoon affair. • February 14, 2003 — $4,000 in Creative Marketing. • March 17, 2003 — $130,000 in the With-erspoon affair. • April 11, 2003 — $14,500 in Creative Marketing. • October 9, 2003 — $2,000 in the Wither-spoon affair. • October 28, 2003 — $50,000 in the With-erspoon affair. Schlichte’s total investment in the Yournet related entities and the Witherspoon affair was $875,000.00. Id. ¶ 63. The Complaint also contends that Cleve-ringa and Anderson caused the following “lulling payments” to be made to the plaintiffs for the purpose of enticing them to make further investments: • November 17, 2000 — Schuster received $25,000. • October 2, 2001 — Schuster received $4,000. • December 17, 2001 — Schuster received $25,000. • August 26, 2002 — Schlichte received $100,000 plus $5,515.83 in interest. The plaintiffs contend that the August 26, 2002, payment to Schlichte was from the proceeds of a loan Cleveringa induced Schuster to incur at ASB. The plaintiffs further allege that, without Schuster’s authorization, Cleveringa and/or Anderson told other potential investors in the Yournet related entities and the Witherspoon affair, including Schlichte, that Schuster would guarantee their investments. See Complaint at ¶ 67. Schus-ter did not authorize any such guarantees offered by the defendants, and was unaware that such guarantees were being given. Further, many of the loans pro-curred by Schuster through ASB were distributed for purposes, and in ways, unauthorized by Schuster. Id. ¶ 68. Finally, the Complaint asserts that Cleveringa and Anderson, to facilitate their conspiracy to defraud the plaintiffs, routinely wired funds obtained from Schuster and Schlichte through financial institutions, including ASB, in violation of 18 U.S.C. § 1343. Id. ¶ 69. II. LEGAL ANALYSIS A. Rule 12(b)(6) Standards The issue on a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted is not whether a plaintiff will ultimately prevail, but whether the plaintiff is entitled to offer evidence in support of his, her, or its claims. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d .90 (1974); United States v. Aceto Agrie. Chem. Corp., 872 F.2d 1373, 1376 (8th Cir.1989). In considering a motion to dismiss under Rule 12(b)(6), the court must assume that all facts alleged by the complaining party are true, and must liberally construe those allegations. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Gross v. Weber, 186 F.3d 1089, 1090 (8th Cir.1999) (“On a motion to dismiss, we review the district court’s decision de novo, accepting all the factual allegations of the complaint as true and construing them in the light most favorable to [the non-mov-ant].”); St. Croix Waterway Ass’n v. Meyer, 178 F.3d 515, 519 (8th Cir.1999) (“We take the well-pleaded allegations in the complaint as true and view the complaint, and all reasonable inferences arising therefrom, in the light most favorable to the plaintiff.”); Gordon v. Hansen, 168 F.3d 1109,1113 (8th Cir.1999) (same); Midwestern Machinery, Inc. v. Northwest Airlines, 167 F.3d 439, 441 (8th Cir.1999) (same); Wisdom v. First Midwest Bank, 167 F.3d 402, 405 (8th Cir.1999) (same); Duffy v. Landberg, 133 F.3d 1120, 1122 (8th Cir.) (same), cert. denied, 525 U.S. 821, 119 S.Ct. 62, 142 L.Ed.2d 49 (1998); Doe v. Nonvest Bank Minn., N.A., 107 F.3d 1297, 1303-04 (8th Cir.1997) (same); WMX Techs., Inc. v. Gasconade County, Mo., 105 F.3d 1195, 1198 (8th Cir.1997) (same); First Commercial Trust v. Colt’s Mfg. Co., 77 F.3d 1081, 1083 (8th Cir.1996) (same). The court is mindful that, in treating the factual allegations of a complaint as true pursuant to Rule 12(b)(6), the court must “reject conclusory allegations of law and unwarranted inferences.” Silver v. H & R Block, Inc., 105 F.3d 394, 397 (8th Cir. 1997) (citing In re Syntex Coi"p. Securities Lit, 95 F.3d 922, 926 (9th Cir.1996)); Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir.1990) (the court “do[es] not, however, blindly accept the legal conclusions drawn by the pleader from the facts,” citing Morgan v. Church’s Fried Chicken, 829 F.2d 10, 12 (6th Cir.1987), and 5 C. Wright & A. Miller, FedeRal Praotice and Procedure § 1357, at 595-97 (1969)); see also LRL Properties v. Portage Metro Hous. Autk, 55 F.3d 1097, 1103 (6th Cir.1995) (the court “need not accept as true legal conclusions or unwarranted factual inferences,” quoting Morgan, 829 F.2d at 12). Conclusory allegations need not and will not be taken as true; rather, the court will consider whether the facts alleged in the plaintiffs’ complaint, accepted as true, are sufficient to state a claim upon which relief can be granted. Silver, 105 F.3d at 397; Wesf-cott, 901 F.2d at 1488. The United States Supreme Court and the Eighth Circuit Court of Appeals have both observed that “a court should grant the motion and dismiss the action ‘only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.’ ” Han-deen v. Lemaire, 112 F.3d 1339, 1347 (8th Cir.1997) (quoting Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984)); accord Conley, 355 U.S. at 45-46, 78 S.Ct. 99 (“A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his [or her] claim which would entitle him [or her] to relief.”); Meyer, 178 F.3d at 519 (“The question before the district court, and this court on appeal, is whether the plaintiff can prove any set of facts which would entitle the plaintiff to relief’ and “[t]he complaint should be dismissed ‘only if it is clear that no relief can be granted under any set of facts that could be proved consistent with the allegations,’ ” quoting Frey v. City of Herculaneum, 44 F.3d 667, 671 (8th Cir. 1995)); Gordon, 168 F.3d at 1113 (“We will not dismiss a complaint for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts that would demonstrate an entitlement to relief.”); Midivestem Machinery, Inc., 167 F.3d at 441 (same); Springdale Educ. Ass’n v. Springdale Sck. Dist., 133 F.3d 649, 651 (8th Cir.1998) (same); Pames v. Gateway 2000, Inc., 122 F.3d 539, 546 (8th Cir.1997) (same); Doe, 107 F.3d at 1304 (same); WMX Techs., Inc., 105 F.3d at 1198 (same). Rule 12(b)(6) does not countenance dismissals based on a judge’s disbelief of a complaint’s factual allegations. Neitzke v. Williams, 490 U.S. 319, 327,109 S.Ct. 1827, 104 L.Ed.2d 338 (1989). Thus, “[a] motion to dismiss should be granted as a practical matter only in the unusual case in which a plaintiff includes allegations that show on the face of the complaint that there is some insuperable bar to relief.” Frey, 44 F.3d at 671 (internal quotation marks and ellipses omitted); accord Pames, 122 F.3d at 546 (also considering whether there is an “insuperable bar to relief’ on the claim). In this instance the plaintiffs’ claims are generally for professional negligence, breach of fiduciary duty, fraudulent misrepresentation, fraudulent nondisclosure, negligent misrepresentation, fraud in the inducement based on fraudulent misrepresentations, fraud in the inducement based on fraudulent nondisclosures, negligent supervision, and breach of contract, and RICO violations under 18 U.S.C. §§ 1962(b), (c) & (d). This court’s subject matter jurisdiction is grounded in federal question jurisdiction based upon the plaintiffs’ RICO claims in Counts XIV — XVI, with supplemental jurisdiction under 28 U.S.C. § 1367 over the remaining claims. The defendants assert, and the plaintiffs concede, that dismissal of Counts XIV-XVI would divest this court of federal jurisdiction. Therefore, the court will begin its analysis of the defendants’ motions to dismiss with the RICO claims. B. Civil RICO Claims— Counts XIV-XVI 1. The RICO claims generally Schuster and Schlichte allege civil RICO violations against Anderson, F.H. Anderson Company, P.C., F.H. Anderson Company, Cleveringa and ASB under §§ 1962(b), 1962(e), and 1962(d), in Counts XIV, XV, and XVI, respectively. These sections provide: (b) It shall be unlawful for any person through a pattern of racketeering activity or through collection of an unlawful debt to acquire or maintain, directly or indirectly, any interest in or control of any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce. (c) It 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. (d) It 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(b)-(d) (2005); see H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 232-33, 109 S.Ct. 2893, 106 L.Ed.2d 195 (1989) (“RICO renders criminally and civilly liable ‘any person’ who uses or invests income derived ‘from a pattern of racketeering activity’ to acquire an interest in or to operate an enterprise engaged in interstate commerce, § 1962(a); who acquires or maintains an interest in or control of such an enterprise ‘through a pattern of racketeering activity,’ § 1962(b); who, being employed by or associated with such an enterprise, conducts or participates in the conduct of its affairs ‘through a pattern of racketeering activity,’ § 1962(c), or, finally, who conspires to violate the first three subsections of 1962. § 1962(d).”). Common to Sections 1962(b)-(d) are the concepts of a “pattern of racketeering activity” and the existence of an “enterprise.” See, e.g., In re Sac & Fox Tribe of Mississippi in Ioiva/Mesk-waki Casino Litig., 340 F.3d 749, 767 (8th Cir.2003) (“To state a claim under § 1962(c), a plaintiff must establish: (1) the existence of an enterprise; (2) conduct by the defendants in association with the enterprise; (3) the defendants’ participation in at least two predicate acts of racketeering; and (4) conduct that constitutes a pattern of racketeering activity.”); Information Exchange Sys., Inc. v. First Bank Nat’l Ass’n, 994 F.2d 478 (8th Cir. 1993) (affirming the trial court’s dismissal of the § 1962(b) claim where the plaintiffs had failed “to demonstrate both the requisite predicate acts and the requisite relatedness of those acts.”). As all the defendants — with the exception of Carl Anderson and Anderson Accounting & Tax Services, Inc., who are not named in the RICO Counts — assert the same basic arguments for dismissal of the RICO Counts, the court will speak of the defendants’ proffered arguments in the aggregate, rather than separating the arguments out by defendant. In other words, the court will set forth the arguments for dismissal of the RICO Counts in general where the defendants are arguing the same theory for dismissal, and identify by defendant only those theories particular to any one defendant. In this subsection, the use of “defendants” refers only to those defendants against which Civil RICO claims are alleged in the Complaint— Anderson, F.H. Anderson Company, P.C., F.H. Anderson Company, Cleveringa and ASB. The defendants allege three basic infirmities in the Complaint: (1) failure to plead fraud with the particularity required by Rule 9(b); (2) failure to adequately plead an enterprise; and (3) that ASB cannot be held liable for RICO violations under the theory of respondeat superior. The court will address each of these grounds in turn. 2. Pleading ñ'aud with particularity a. Arguments of the parties The defendants first contend that the plaintiffs have not plead the predicate acts of fraud with the requisite particularity. The defendants assert that the specificity requirements of Federal Rule of Civil Procedure 9(b) apply to the Civil RICO claims, and that the plaintiffs have fallen woefully short of meeting that requirement. Specifically, the defendants point out the Complaint alleges “wire fraud” as the predicate act for the RICO claims, but does not identify the time, place, contents or speaker of any misrepresentations made to Schlichte and Schuster. The defendants additionally assert that the Complaint also fails to set forth specific facts that made it reasonable for the speaker to know that any statements to Schlichte or Schuster were materially false or misleading. The defendants argue that the assertion in the Complaint that Cleveringa and Anderson “induced” various investments of money is conclusory and insufficient. The defendants further discount the footnote explaining the use of the term “induced” as “ ‘a representation made by Cleveringa and/or Anderson that the proposed investment was a good investment, that was safe and would return a good profit’ ” as likewise conclusory. Defendant American State Bank’s Brief in Support of Its Renewed motion to Dismiss Pursuant to Fed. R.Civ.P. 12(b)(6) (“ASB’s Brief’), Doc. No. 55, at 6-7 (quoting Complaint at pg. 12 n. 4). The plaintiffs thoroughly resist the defendants’ contentions that the predicate acts of fraud are not pled with the specificity required by Rule 9(b). Specifically, the plaintiffs point out that the date, time, place of origin, dollar amount, and recipient of the alleged wire frauds are set forth in paragraph 69 of the Complaint. The plaintiffs argue that it is difficult to identify the speaker of any misrepresentations as no discovery has been conducted in this case — however, the plaintiffs assert it is clear that the wires were initiated by someone authorized to direct such transfers and that appropriate paperwork had to be completed by employees for such transfers to have happened. The plaintiffs contend that the Complaint alleges that either Anderson or Cleveringa initiated each of these wire transfers. The plaintiffs recognize that the wire transfers, in and of themselves, do not indicate fraud'— but that the actions giving rise to those wire transfers give rise to the wire fraud alleged in the Complaint. According to the plaintiffs, the Complaint clearly alleges “that Cleveringa and Anderson were involved in soliciting investors and/or loaning money to investors for the purpose of investing in fraudulent investments” in entities that were formed for the sole purpose of soliciting such fraudulent investments. Plaintiffs’ Resistance and Brief in Support of Plaintiffs’ Resistance to All Defendants’ Motions to Dismiss (“Plf.s’ Resistance”), Doc. No. 58, at 13. The plaintiffs assert that the Complaint identifies Cleveringa and Anderson as two individuals that “induced” them to make investments in these fraudulent schemes and entities by representing that they were good investments that would result in a profit. Further, the plaintiffs contend that the Complaint specifically identifies such investments by Schuster on 37 occasions (26 from his own assets and 11 from loan proceeds) and by Schlichte on 22 occasions. Additionally, the plaintiffs claim the Complaint identifies the offices of ASB as one location that Anderson and Cleveringa made these fraudulent representations, and that Schuster contends that fraudulent misrepresentations were made to him at his office in LeMars, Iowa, at Anderson’s office in Orange City, Iowa, and in Minnesota. The plaintiffs contend that the only fact which they cannot yet set forth without conducting discovery is which of Schuster’s investments and Schlichte’s investments were solicited at Schuster’s office, Anderson’s office, ASB or Minnesota. Finally, the plaintiffs contend that should the court find that additional facts must be plead to survive the motions to dismiss that the court give them leave to file a Third Amended and Substituted Complaint. In reply, the defendants reiterate their original basis for dismissal of Counts XIV-XVI: (1) fraud has not been plead with the requisite particularity; (2) an enterprise has not been plead; and (3) ASB cannot be held liable under a respondeat superior theory of liability. As to pleading fraud with particularity, the defendants urge that the question is not whether the wire transfers themselves have been plead with particularity, but rather whether the “circumstances constituting fraud” have been plead with particularity. See Defendant American State Bank’s Reply Brief In Support Of Its Renewed Motion To Dismiss Pursuant to Fed.R.Civ.P. 12(b)(6) (“ASB’s Reply”), Doc. No. 66, at 1. The defendants aver that the plaintiffs, though conceding that the act of wiring money alone does not constitute fraud, wholly fail to allege the time, place, contents, and speaker of any fraudulent misrepresentations made to them or set forth specific facts that make it reasonable to believe that the speaker knew any statements made were false or misleading. The defendants point to Cleveringa as an example — according to the defendants, under a reading of the Complaint, it is entirely possible that Cleveringa made no statements to the plaintiffs about their investments; which is unacceptable as the plaintiffs are relying on Cleveringa’s status as an ASB employee to hold ASB liable in Civil RICO. The defendants also attack the plaintiffs’ resistance to the extent that it only identifies locations where fraudulent misrepresentations were made — stating that as there are no allegations as to what was said at those meetings and that this fails to meet the plaintiffs’ Rule 9(b) burden. The defendants rebuke the plaintiffs’ contention that further discovery would be necessary to determine which investments were solicited at which locations — arguing that if the plaintiffs “actually invested in reliance on misrepresentations that were made to them, they should be able to allege the required Rule 9(b) requirements regarding those misrepresentations without discovery.” ASB’s reply at 3. Finally, ASB contends that allowing the plaintiffs a third attempt to plead fraud with the particularity required by Rule 9(b) would be futile as the only facts the plaintiffs contend they do not yet possess (i.e. which investments were solicited at which locations) would not cure the Rule 9(b) deficiencies. b. The law Courts have held that the heightened pleading requirements of Federal Rule of Civil Procedure 9(b) apply to allegations of fraud in a civil RICO complaint. See, e.g., Murr Plumbing, Inc. v. Scherer Bros. Fin., 48 F.3d 1066, 1069 (8th Cir.1995) (applying Rule 9(b) to allegations of mail and wire fraud as predicate acts for RICO' claims); Gunderson v. ADM Investor Servs., Inc., 85 F.Supp.2d 892, 914 (N.D.Iowa 2000) (noting that Rule 9(b) requirements of heightened pleading apply to civil RICO claims alleging fraud-based predicate acts). This court has articulated the standards for pleading fraud with the particularity required by Rule 9(b) in several decisions. See Iowa Health Sys. v. Trinity Health Corp., 177 F.Supp.2d 897, 916 (N.D.Iowa 2001); Wright v. Brooke Group, Ltd., 114 F.Supp.2d 797, 832-33 (N.D.Iowa 2000); Gunderson, 85 F.Supp.2d at 903; Doe v. Hartz, 52 F.Supp.2d 1027, 1055 (N.D.Iowa 1999); North Central F.S., Inc. v. Brown, 951 F.Supp. 1383 (N.D.Iowa 1996). In Wright, this court provided the following brief discussion of the Rule 9(b) requirements: Rule 9(b) of the Federal Rules of Civil Procedure “ ‘requires a plaintiff to allege with particularity the facts constituting the fraud.’ ” See Brown, 987 F.Supp. at 1155 (quoting Independent Business Forms v. A-M Graphics, 127 F.3d 698, 703 n. 2 (8th Cir.1997)). “ ‘When pleading fraud, a plaintiff cannot simply make conclusory allegations.’ ” Id. (quoting Roberts v. Francis, 128 F.3d 647, 651 (8th Cir.1997)). In Commercial Property Inv., Inc. v. Quality Inns Int’l, Inc., 61 F.3d 639, (8th Cir.1995), the Eighth Circuit Court of Appeals explained: Rule 9(b) requires that “[i]n all aver-ments of fraud or mistake, the circumstance constituting fraud or mistake shall be stated with particularity.” “ ‘Circumstances’ include such matters as the time, place and content of false representations, as well as the identity of the person making the misrepresentation and what was obtained or given up thereby.” Bennett v. Berg, 685 F.2d 1053, 1062 (8th Cir.1982), adhered to on reh’g, 710 F.2d 1361 (8th Cir.), cert, denied, 464 U.S. 1008, 104 S.Ct. 527, 78 L.Ed.2d 710 (1983). Because one of the main purposes of the rule is to facilitate a defendant’s ability to respond and to prepare a defense to charges of fraud, Greenwood v. Dittmer, 776 F.2d 785, 789 (8th Cir.1985), conclusory allegations that a defendant’s conduct was fraudulent and deceptive are not sufficient to satisfy the rule. In re Flight Transp. Cor. Sec. Litig., 593 F.Supp. 612, 620 (D.Minn.1984). Commercial Property, 61 F.3d at 644;. see Roberts, 128 F.3d at 651 (noting that factors a court should examine in determined whether the ‘circumstances’ constituting fraud are stated with particularity under Rule 9(b) “include the time, place and contents of the alleged fraud; the identity of the person allegedly committing fraud; and what was given up or obtained by the alleged fraud.”). Wright, 114 F.Supp.2d at 832-33. In sum, the “complaint must be specific with respect to the time, place, and content of the alleged false representations, the method by which the misrepresentations were communicated, and the identity of the parties to those misrepresentations.” La-chmund v. ADM Investor Servs., Inc., 191 F.3d 777, 783 (7th Cir.1999). At the heart of any RICO claim is conduct involving a “pattern” of racketeering activity. 18 U.S.C. § 1962; “Racketeering activity” — as referred to in Sections 1962(b)-(d) — is defined by the RICO statutes to include a number of indictable offenses. See 18 U.S.C. § 1961(1); Man-ion v. Freund, 967 F.2d 1183, 1185 (8th Cir.1992). RICO defines a “pattern” as requiring at least two acts of racketeering or predicate acts. 18 U.S.C. § 1961(5). Section 1961 lists these racketeering activities — which include specific federal and state law crimes. Diamonds Plus, Inc. v. Kolber, 960 F.2d 765, 768 (8th Cir.1992). One such predicate act, and the predicate act alleged by the plaintiffs in the Complaint as establishing a “pattern of racketeering,” is wire fraud. See id. In Abels v. Farmers Commodities Corporation, 259 F.3d 910 (8th Cir.2001), the Eighth Circuit Court of Appeals discussed, generally, the pleading requirements for wire or mail fraud as predicate acts for a RICO claim: In order ... to survive dismissal, however, the plaintiffs must also have adequately pleaded a “pattern of racketeering activity.” 18 U.S.C. § 1962(c). In this case, RICO liability is predicated on alleged acts of mail fraud, 18 U.S.C. § 1341, and wire fraud, 18 U.S.C. § 1343. Those offenses consist in the foreseeable use of the mails or wires for the purpose of carrying out a scheme to defraud. Atlas. Pile Driving Co. v. Di-Con Financial Co., 886 F.2d 986, 991 (8th Cir.1989). Beyond that, the offense conduct may vary rather widely. “The crime of mail fraud is broad in scope and its fraudulent aspect is measured by a non-technical standard, condemning conduct which fails to conform to standards of moral uprightness, fundamental honesty, and fair play.” Id. A plaintiff may, but need not, allege that a defendant made misrepresentations of fact. Murr Plumbing, Inc. v. Scherer Brothers Financial, 48 F.3d 1066, 1069 n. 6 (8th Cir.1995). Because misrepresentations of fact are not necessary to the offense, it follows that no misrepresentations need be transmitted by mail or wire: even routine business communications in these media may suffice to make a scheme of false dealing into a federal offense. See, e.g., Atlas Pile Driving, 886 F.2d at 992 (“a mailing [that serves as an element of mail fraud] may be a routine mailing or even one that is sent for a legitimate business purpose so long as it assists in carrying out the fraud.”). Abels, 259 F.3d at 918. Further, mail and wire fraud are established by showing the following four elements: (1) a scheme to defraud; (2) intent to defraud; (3) reasonable foreseeability that the mails or wires would be used; and (4) use of the mails or wires in furtherance of the scheme. United Healthcare Corp. v. American Trade Ins. Co., Ltd., 88 F.3d 563, 571 (8th Cir. 1996) (quoting Murr Plumbing, 48 F.3d at 1069 n. 6); see also Wisdom v. First Midwest Bank of Poplar Bluff, 167 F.3d 402, (8th Cir.1999) (citing Murr Plumbing, and noting the four factors that must be established where mail or wire fraud is plead as a predicate act). Manion, 967 F.2d at 1186 (noting that “[m]ail or wire fraud requires proof of a scheme to defraud and use of the mails or wires in furtherance of that scheme.”). A showing of an intent to defraud is critical to establishment of the predicate acts of wire fraud: No single fact need demonstrate the defendant’s intent; rather, intent to defraud can be discerned by examining the totality of the circumstances surrounding the defendant’s activities. [Atlas Pile Driving, 886 F.2d at 991.] Intent to defraud need not be evidenced by the defendant’s avowed intent to bilk members of the public; it can also be demonstrated when the defendant recklessly disregards whether his representations are true. E.g. United States v. Henderson, 446 F.2d 960, 966 (8th Cir.), cert, denied, 404 U.S. 991, 92 S.Ct. 536, 30 L.Ed.2d 543 (1971). Diamonds Plus, Inc., 960 F.2d at 768. c. The Complaint Count XIV, in which Schuster and Schlichte assert a § 1962(b) claim against the defendants, provides, in relevant part: 169. [Anderson, F.H. Anderson Company, P.C., F.H. Anderson Company, Cleveringa, ASB (hereinafter in Count XIV referred to as “these defendants”) ] committed at least two predicate acts of wire fraud.. Fourteen specific wire transfers are identified in paragraph 69 supra. The funds transferred in these wire transfers came from either the loans that Schuster took out as described in paragraph 57 supra, or the investments made by Schuster as described in paragraph 62 supra, or the loans, line of credit or investments made by Schlichte as described in paragraphs 63 and 64 supra. The wire transfers were made to further the purposes set forth in paragraphs 38 through 48, 53 through 56, and 58, supra. 170. Each of these wire transfers were either authorized or directed by Anderson or Cleveringa. Anderson’s authorizations and/or directions were given on his behalf and the behalf of F.H. Anderson Company, P.C. and/or F.H. Anderson Company. Cleveringa’s authorizations and/or directions were given on his behalf and on behalf of ASB. 171. Each of these authorizations and/or directions was given over the telephone (additional examples of wire fraud) or in person at one of three primary locations: Schuster’s primary business office in Le Mars, Iowa, or at ASB in Sioux Center, Iowa, or at Anderson’s primary place of business in Orange City, Iowa. Complaint at ¶¶ 169-171. d. Analysis It appears as though two issues have actually been raised by the defendant’s motion to dismiss: (1) whether the predicate acts are plead with sufficient particularity; and (2) whether the circumstances constituting fraud have been plead with sufficient particularity. The court will address each of these contentions in turn. i Wire transfers. The court first turns to whether the allegations of wire fraud are plead with the particularity required by Rule 9(b). In terras of the wire transfers themselves, the court keeps in mind that “[bjecause misrepresentations of fact are not necessary to [mail or wire fraud], it follows that no misrepresentations need be transmitted by mail or wire: even routine business communications in these media may suffice to make a scheme of false dealing into a federal offense.” Abels, 259 F.3d at 918. Counts XV and XVI, which plead § 1962(c) and (d) RICO claims, respectively, incorporate this language by reference insofar as describing the predicate acts of wire fraud and the scheme to defraud. Complaint at ¶¶ 178, 181. Paragraph 69 of the Complaint, that claimed to identify the wire transfers, reads as follows: 69. Throughout the conspiracy to defraud Schuster, Schlichte and other investors, Cleveringa and Anderson routinely wired funds through, among other financial institutions, ASB, in perpetrating fraud on Schuster, Schlichte and other investors in violation of 18 U.S.C. § 1343. Plaintiffs have been able to identify the following representative wire transfers at this early stage: a. On or about November 8, 2000 the sum of $52,658.63 from the Yournet account at ASB to the personal account of Chuck Hinnenkamp at First Star, Minnetonka, Minnesota. These funds originated from Schuster loan proceeds. At no time did Schuster agree to borrow money to be given to Hinnenkamp. b. On or about March 14, 2002 the sum of $10,015 from the Yournet account maintained at defendant, ASB to Chuck Hinnenkamp. These funds originated from Schuster loan proceeds. At no time did Schuster agree to borrow money to be given to Hinnenkamp. c. On or about January 31, 2002, the sum of $7638.58 from an account maintained at Iowa State Bank by Anderson to Robert Unfress. These funds originated from Schuster loan proceeds. d. On or about January 31, 2002, the sum of $2,487.71 from an account maintained at Iowa State Bank by Anderson to Park Inn Suites. These funds originated from Schuster loan proceeds. e. On or about January 31, 2002, the sum of $10,014 from an account maintained at Iowa State Bank by Anderson to Anthony Pollasky. These funds originated from Schuster loan proceeds. f. On or about January 31, 2002, the sum of $36,564.67 from an account maintained at Iowa State Bank by defendant Fay Anderson to Chuck Hinnenkamp. These funds originated from Schuster loan proceeds. g. On or about October 29, 2002 the sum of $50,015 from the R-Chief account maintained at ASB to Wachovia Bank in Charlotte, North Carolina in connection with the Witherspoon affair. h. On or about November 15, 2002 the sum of $300,015 from the R-Chief account maintained at ASB to Wachovia Bank in Charlotte, North Carolina in connection with the Witherspoon affair. i. On or about January 30, 2003 the sum of $160,015 from the R-Chief account maintained at ASB to Wachovia Bank in Charlotte, North Carolina in connection with the Witherspoon affair. These funds originated from Schlichte loan proceeds. j. On or about March 17, 2003 the sum of $130,000 from the R-Chief account maintained at ASB to Wachovia Bank in Charlotte, North Carolina in connection with the Witherspoon affair. These funds originated, in part, from Schlichte loan proceeds. k. On or about October 8, 2002 the sum of $30,000 from ASB to Russ Barber in connection with the Witherspoon affair. l. On or about August 27, 2002 the sum of $360,015 from the R-Chief account maintained at ASB to Wachovia Bank in Charlotte, North Carolina in connection with the Witherspoon affair. m. On or about October 25, 2005 the sum of $100,000 from the R-Chief account maintained at ASB to Wachovia Bank in Charlotte, North Carolina in connection with the Witherspoon Affair. These funds originated from Schuster loan proceeds. n. On or about October 28, 2002 the sum of $50,000 from ASB to Russ Barber in connection with the Witherspoon affair. These funds originated from Schuster loan proceeds. Complaint at ¶ 69. Finally, Count XIV, and Counts XV and XVI by reference, indicates that the wire transfers were made for the purposes set forth in paragraphs 38 through 48, 53 through 56, and 58 — which provide: 38. On information and belief, Cleve-ringa and Anderson, and other known and unknown individuals, to include Chuck Hinnenkamp, created a number of legal entities, described in this section, for the purposes of establishing vehicles to be used to solicit investors in various fraudulent investment schemes. It is unclear whether the individuals who formed these entities intended from the start to defraud various investors or whether this intent formed at a later date. 39. At some point, the individuals who formed and/or operated the various legal entities described in this section, conspired to defraud investors in general, and Schuster and Schlichte specifically, in what amounted to a series of fraudulent investment schemes. 40. The investment schemes were fraudulent because these individuals, in general, and Cleveringa and Anderson, in particular, intended to defraud Schus-ter and Schlichte of their savings and other assets through investment schemes that had no possibility of coming to fruition since the “investments” were not investments but simply transfers of cash to Anderson and others. Some of the investors’ money was spent on normal business expenses in order to present the appearance to investors that those were legitimate businesses. 41. Plaintiffs’ “investments” were funded either from cash from Schuster or Schlichte’s assets or by the proceeds of loans made to Schuster or Schlichte by ASB and other financial institutions. 42. On or about March 24, 1997, Creative Marketing & Communications Inc. (hereinafter “Creative Marketing”) was formed. Cleveringa was an officer, director and shareholder in Creative Marketing. Anderson also held an ownership interest in Creative Marketing. 43. On information and belief, Creative Marketing was established for the purpose of providing a vehicle in which to solicit investors in what amounted to a series of fraudulent investment schemes. In their efforts to solicit investors/victims for Creative Marketing, Cleveringa and Anderson arranged investment meetings that were held at ASB in Sioux Center, Iowa. 44. On information and belief, Team Ink, L.L.C. (hereinafter “Team Ink”) was another entity and/or utilized as part of a conspiracy to defraud investors. Team Ink was combined with Creative Marketing in late 1998. 45. On information and belief, in or about 1998, an entity known as World Wide Future Net, a/k/a WWFN (hereinafter ‘WWFN”), was created and/or utilized as part of a conspiracy to defraud investors. Anderson had a financial interest in WWFN. 46. On or about October 1, 1998, an entity by name of Yournet was created and/or utilized as part of a conspiracy to defraud investors. Shortly after the formation of Yournet, the alleged “net assets” of WWFN were transferred to Yournet in exchange for the issuance of stock in Yournet to Anderson and another individual who played a prominent role in the Yournet related entities, Chuck Hinnenkamp. 47. On or about November 7, 2000, an entity by name of Quan Capital Corporation was created and/or utilized as part of a conspiracy to defraud investors. 48. On information and belief, at least two additional entities, R-Chief and Zaba Industries were also created and/or utilized as part of a conspiracy to defraud investors. * * * * * * 53. During September of 2002, in a meeting held at ASB, Cleveringa and Anderson presented an investment opportunity to Schuster and Schlichte related to an “investment” in an alleged jury verdict of over $600 million awarded to Darryl Witherspoon. The purpose of the alleged investment was to cover future expenses related to the lawsuit, with a promised return between 500% and 1,000%. 54. At the time Cleveringa, Anderson and ASB recommended the Witherspoon investment to Schuster and Schlichte, they all knew or should have known but for a reckless disregard of the facts, that the investment opportunity was a fraud. 55. At all times material to Schus-ter’s and Schlichte’s “investments” in the Witherspoon fraud, Cleveringa and Anderson had a financial interest therein, by virtue of a series of promissory notes made payable to Creative Marketing, which were allegedly executed by Darrell Witherspoon and/or Russ Barber, two individuals who were criminally involved in the Witherspoon affair. 56.For all intents and purposes, the Witherspoon affair was simply a continuation of the same fraudulent activity conducted by the same known entities, Cleveringa, Anderson, ASB, and other unknown entities, in the criminal enterprise identified as an “association in fact” in note 4, supra. In other words, while the object of the investment had changed, the players for the most part remained the same and the funding mechanisms also remained the same: an infusion of cash by Schuster, Schlichte or the proceeds of Schuster loans from ASB and other financial institutions. :¡í :¡c # Hí ‡ # 58. Cleveringa and Anderson induced Schuster to borrow the money set forth in paragraph 57 supra, for the purposes of investing in Yournet, Your-net related entities or the Witherspoon affair. Additionally, some of the money that Schuster borrowed was used to pay off earlier investment loans that were due and owing. The proceeds of such loans were deposited into Yournet and/or Yournet related entities’ accounts at ASB, and then disbursed to various individuals and entities. ASB derived a substantial benefit by virtue of Schus-ter’s interest payments on these loans and also by the fact that some of the money Schuster borrowed was used by ASB to pay off notes owed to the bank by less credit-worthy customers. Anderson and Cleveringa were among the recipients of money disbursed from Schuster loan proceeds. Complaint at ¶¶ 38-48, 53-56, 58 (footnote omitted). The term “induced” used in paragraph 58 is further defined in a footnote as: “a representation made by Cleve-ringa and/or Anderson that the proposed investment was a good investment, that it was safe and would return a good profit on Schuster’s investment.” Complaint at pg. 12 n. 4. In this instance, the plaintiffs, in paragraph 69, have set forth the time, amount, and parties to fourteen wire transfers that they allege comprise the predicate racketeering acts and in paragraphs 38-48, 53-56, and 58, have set forth the purposes and/or motivations behind the wire transfers. The plaintiffs have also asserted that these wire transfers originated in one of three discrete locations — “Schuster’s primary business office in Le Mars, Iowa, or at ASB in Sioux Center, Iowa, or at Anderson’s primary place of business in Orange City, Iowa.” Complaint at ¶ 171. The allegations as to the wire transfers themselves, which set forth dates, amounts, the entities the funds were transferred between via wires, and a discrete number of locations from which the wire transfers originated, meet the pleading requirements of Rule 9(b). ii. Circumstance constituting fi'aud. Now, the court turns to the defendants’ contention that the “circumstances constituting” a scheme to defraud by the defendants are not plead with sufficient particularity-most specifically, that the locations and content of any misrepresentations by the defendants is notably absent from the Complaint. Fed. R. Civ. P. 9(b). From the Complaint, it is clear that the plaintiffs allege that Anderson, Cleveringa, and unknown individuals formed a series of business entities in which they held an interest — including: Creative Marketing, Team Ink, WWFN, Yournet, Quan Capital Corporation, R-Chief and Zaba — for the purposes of inducing Schlichte and Schuster to invest in these entities, and once such investments were made Cleveringa and Anderson would extract the funds from those entities and put them to their own personal use. The Complaint also alleges that ASB maintained accounts for several of these “shell” entities, including Yournet, WWFN and R-Chief — accounts for which Cleveringa was the responsible ASB officer. See Complaint at ¶ 49. There are additional allegations that the defendants induced Schuster to take out loans from ASB, and put up certain personal and business property as collateral, such that he could invest in these business entities, and that the defendants also induced Schlichte to borrow money from, or take out lines of credit with, ASB for the same purpose. The Complaint also states that “[i]n their efforts to solicit investors/victims for Creating Marketing, Cleveringa and Anderson arranged investment meetings that were held at ASB in Sioux Center, Iowa.” Id. ¶ 43. With regard to the Witherspoon affair, the plaintiffs contend that Cleveringa and Anderson presented the “investment” opportunity to Schlichte and Schuster at ASB during September 2002 and that Cleveringa and Anderson “induced Schus-ter to borrow money” from ASB “for the purposes of investing in Yournet, Yournet related entities or the Witherspoon affair” and to “pay off earlier investment loans that were due and owing.” Id. ¶¶ 53, 58. As previously noted, to spe