Allstate Insurance Co. v. Benhamou (190 F. Supp. 3d 631, 2016)

United States District Court for the Southern District of Texas 2016-06-02

Crimes and Criminal Procedure

Citations

Full opinion text

OPINION AND ORDER

MELINDA HARMON, UNITED STATES DISTRICT JUDGE

Plaintiffs, Allstate Insurance Company, Allstate Indemnity Company, Allstate Property and Casualty Insurance Company, Allstate County Mutual Insurance Company, and Allstate Eire and Casualty Insurance Company (collectively, “Allstate” or “Plaintiffs”) bring this action against Defendants, Elias Benhamou, M.D. (“Benhamou”), Mobeen Choudhri, M.D, (“Choudhri”), Greater Houston Interven-tional Pain Associates, PA (f/n/a Elias Ben-hamou, M.D., P.A.) (“GHIPA”), and Bayou City Pain Consultants, LLC (“BCPC”), (collectively, “BCPC Defendants”), and Steven Sanderson, CRNA (“Defendant Sanderson” or “Sanderson”), (collectively, “Defendants”), for operating a Racketeer Influenced and Corrupt Organizations Act (“RICQ”) enterprise in violation of 18 U.S.C. § 1962(c), engaging in a RICO conspiracy in violation of 18 U.S.C. § 1962(d), and for fraud, conspiracy, and unjust enrichment in violation of Texas state law. Pending before the Court are the following motions: BCPC Defendants’ Motion to Dismiss (Doc. 11), BCPC Defendants’ Motion for a More Definite Statement (Doc. 12), and Defendant Sanderson’s Motion to Dismiss and, in the Alternative, Motion for a More Definite Statement (Doc. 13), Having considered the motions, responses, replies, and the applicable law, the Court finds that Defendants’ motions should be granted in part and denied in part.

I. BACKGROUND

Plaintiffs filed this action against Defendants on February 10, 2016, seeking to recover “sums fraudulently procured by Defendants from Plaintiffs from 2010 through 2013, by means of bodily injury claims based on medical billings for unnecessary and unreasonable examinations and consultations and surgical injection procedures.” Doc. 1 at ¶ 1. On the RICO claims, Plaintiffs allege repeated violations of the federal mail fraud statute, 18 U.S.C. § 1341, as the predicate acts. Id. at ¶ 119, The first count of the complaint ■ alleges mail fraud violations by an association-in-fact enterprise consisting of GHIPA, Ben-hamou, and Choudhri. Id. at 104-111. The second count alleges mail fraud violations by the GHIPA “center enterprise,” with Defendants Benhamou, Choudhri, BCPC, and Sanderson as the “enterprise persons.” Id. at ¶¶ 104-115. The third count alleges that Defendants conspired to violate 18 U.S.C. § 1962(c), in violation of 18 U.S.C. § 1962(d). Id, at ¶¶ 279-280. The fourth, fifth, and sixth counts state claims for common-law fraud, conspiracy, and unjust enrichment. Id. at ¶¶ 281-299.

BCPC Defendants filed a motion to dismiss under Fed. R. Civ. P. 12(b)(6) and 9(b) contending that Allstate failed to adequately plead:

1. Plaintiffs have standing; ■

2. predicate acts that support a “pattern of racketeering activity,” and' with particularity on the fraud allegations;

3. the existence of a RICO enterprise or enterprise persons;

4. a RICO conspiracy claim; and

5. common-law fraud or conspiracy with particularity and, therefore, also fail to articulate a claim upon which an unjust-enrichment claim can lie.

Doc. 11 at ¶¶ 15-62.

As an alternative to its 12(b)(6) motion, BCPC Defendants filed a motion for a more definite statement. Doc. 12.

Defendant Sanderson also filed a motion to dismiss pursuant to Rules 12(b)(6) and 9(b) and, in the alternative, a motion for a more definite statement. Doc. 13. Defendant Sanderson alleges that Allstate fails adequately to plead:

1. Plaintiffs have standing;

2. Sanderson participated in the operation or management of the enterprises;

3. Sanderson committed a single violation of the mail fraud statute;

4. Sanderson made any fraudulent misrepresentation;

5. Sanderson “caused use of the mails to further a fraudulent scheme;”

6. Sanderson engaged in a pattern of mail fraud or “the predicate acts are related to each other and that they constitute or threaten long-term criminal activity;”

7, the association-in-fact enterprise had a separate purpose;

8, the association-in-fact enterprise “is an ongoing organization or that it functions as a continuing unit as shown by a hierarchical or consensual decision-making structure,”

9, Sanderson knew of and agreed to .the overall objective of the “RICO offense;”

10, the 'alleged fraud caused legal injury; ■ and ‘

11, common-law fraud or conspiracy with particularity and, therefore, also fail to articulate a claim upon which an unjust-enrichment claim can lie.

Id. at pp. 10-16.

Defendants move the Court to dismiss Plaintiffs’ claims pursuant to Federal Rules of Civil Procedure 12(b)(6) for failure to state a.claim for which relief may be granted and 9(b) for failure to plead fraud with particularity. As an alternative to their motions to dismiss, Defendants ask this court to order Plaintiffs to provide a more definite statement of their claims under Fed. R. Civ. P. 12(e). Plaintiffs respond to the pending motions by arguing that the pleadings are -sufficient to survive the motions to dismiss and seeking leave to file an amended complaint if this Court disagrees.

II. LEGAL STANDARDS

A. Federal Rule of Civil Procedure 12(b)(6)

Federal Rule of Civil Procedure 12(b)(6) allows the court to dismiss a claim that “fails to state a claim upon which relief may be granted.” Fed. R. Civ. P. 12(b)(6). In reviewing, a motion to dismiss for failure to state a claim, the court must accept as true all well-pleaded facts in the complaint, and must view the allegations as a whole in the light most favorable to the non-movant. Scanlan v. Texas A & M Univ., 343 F.3d 533, 536 (5th Cir.2003). Although Federal Rule of Civil Procedure 8 mandates only that a pleading contain a “short and plain statement of the claim showing that the pleader is entitled to relief,” this standard demands more than unadorned accusations, “labels and conclusions,” “a formulaic recitation of the elements of a cause of action,” or “naked assertion[s]” devoid of “further factual enhancement.” Bell Atl. v. Twombly, 550 U.S. 544, 555-57, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Thus, to survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” Id. at 570, 127 S.Ct. 1955.

Facial plausibility is satisfied when the plaintiff pleads factual content that allows the court to draw a reasonable inference that the defendant is liable for the misconduct alleged. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955). Although the plausibility standard “is not akin to a ‘probability requirement,’ ” there must be “more than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 556, 127 S.Ct. 1955). Thus, “where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged— but it has not ‘shown’ — ‘that the pleader is entitled to relief.’” Id. at 679, 129 S.Ct. 1937 (quoting Rule 8(a)(2)). Determining whether a complaint states a plausible claim for relief is a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. Id.

B. Federal Rule of Civil Procedure 9(b)

When a complaint alleges claims sounding in fraud, Rule 9(b) requires that plaintiffs plead the underlying factual circumstances with particularity. Fed. R. Civ. P. 9(b). Accordingly, Rule 9(b)’s particularity requirement applies to the pleading of mail fraud as a predicate act in a RICO case. Landry v. Air Line Pilots Ass’n Intern. AFL-CIO, 901 F.2d 404, 430 (5th Cir. 1990); Williams v. WMX Techs., Inc., 112 F.3d 175, 177 (5th Cir.1997); Tel-Phonic Servs., Inc. v. TBS Int'l Inc., 975 F.2d 1134, 1139 (5th Cir.1992). Rule 9(b) states that “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.” Fed. R. Civ. P. 9(b). Under Rule 9(b), a plaintiff must plead the particulars of time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby. Benchmark Elecs, v. J.M. Huber Corp., 343 F.3d 719, 724 (5th Cir.2003) (quoting Tel-Phonic Servs., 975 F.2d at 1139). Put simply, plaintiffs must plead the “who, what, when, where, and how” of the alleged fraud. United States ex rel. Williams v. Bell Helicopter Textron Inc., 417 F.3d 450, 453 (5th Cir. 2005) (internal citation and quotation marks omitted). However, when certain information is peculiarly within defendants’ knowledge, the courts are more forgiving in applying Rule 9(b), finding that less detail is required in such cases. In re Enron Corp. Sec., Derivative & “ERISA” Litig., No. 02-0299, 2002 WL 32107216, at *11 (S.D.Tex. Aug. 12, 2002) (citing Wool v. Tandem Computers, Inc., 818 F.2d 1433, 1439 (9th Cir.1987); Schlik v. Penn-Dixie Cement Corp., 507 F.2d 374, 379 (2d Cir.1974); The Cadle Co. v. Schultz, 779 F.Supp. 392 (N.D.Tex.1991); Michaels Bldg. Co. v. Ameritrust Co., 848 F.2d 674, 680 (6th Cir.1974)).

III. ANALYSIS

Plaintiffs bring this action for violations of RICO, 18 U.S.C. §§ 1962-1968, common-law fraud, conspiracy, and unjust enrichment. Doc. 1 at ¶¶ 104-116, 279-299. Plaintiffs allege that “Defendants engaged in a scheme to defraud Allstate, through bodily injury claims based on medical billings for unnecessary and unreasonable consultations and surgical injection procedures.” Id. at ¶ 1; Doc. 19 at ¶ 1.

A. RICO CLAIMS

Defendants argue that Plaintiffs’ RICO claims should be dismissed because the complaint fails to sufficiently allege: (1) RICO standing; (2) a RICO § 1962(c) claim; and (3) a RICO conspiracy. Doc. 11 at ¶¶ 15-43; Doc. 13 at pp. 7-15.

There are four substantive RICO violations set out in § 1962. 18 U.S.C. § 1962(a)-(d). The elements required to state a claim vary according to the particular RICO claim asserted. Elliot v. Foufas, 867 F.2d 877, 880 (5th Cir.1989). However, regardless of what section a claim' is brought under, three threshold elements must be met: (1) a person who engages in (2) a pattern of racketeering activity (3) connected to the acquisition, establishment, conduct, or control of an enterprise. Delta Truck & Tractor, Inc. v. J.I. Case Co., 855 F.2d 241, 242 (5th Cir.1988) (em: phasis in original). Assuming that all three of these elements are met, the court may then continue to the substantive requirements of each respective subsection. St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425, 439 (5th Cir.2000).

In this case, Plaintiffs allege violations of subsections (c) and (d). Because the contested threshold elements, “pattern of racketeering activity” and “enterprise,” overlap with the substantive elements of subsection (c) and (d) claims, and a subsection (d) claim is dependent on the subsection (c) claim in civil cases, the Court will address those two elements in addressing the § 1962(c) claim.

1. Plaintiffs’ Standing

Defendants first argue that Plaintiffs lack standing to bring suit because Plaintiffs’ Original Complaint fails to demonstrate that Defendants’ “pattern of racketeering activity” was the direct and proximate cause of Allstate’s purported injuries. Doc. 13 at pp. 7-9; Doc. 11 at ¶¶ 15-20; Doc. 12 at ¶ 7.

A civil action under RICO may be brought by “[a]ny person injured in his business or property by reason of a violation of’ RICO’s substantive provisions. Varela v. Gonzales, 773 F.3d 704, 707 (5th Cir.2014) (quoting 18 U.S.C. § 1964(c)). Thus, a RICO plaintiff only has standing if, and can only recover to the extent that, he has been injured in his business or property by reason. of the conduct constituting the violation. Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 496, 106 S.Ct. 3275, 87 L.Ed.2d.346 (1985) (emphasis added). To establish that an injury came about “by reason of’ a RICO violation, a plaintiff must show that a predicate offense “not only was a ‘but for’ cause of his injury, but a proximate cause as well.” Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258, 268, 112 S.Ct. 1311, 117 L.Ed.2d 532 (1992).

Proximate causation under RICO is evaluated in light of its common-law foundations. Hemi Group, LLC v. City of New York, 559 U.S. 1, 130 S.Ct. 983, 175 L.Ed.2d 943 (2010). Consequently, the central question a court must ask is whether the alleged violation led directly to a plaintiffs injuries. Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 461, 126 S.Ct. 1991, 164 L.Ed.2d 720 (2006). Links that are “indirect,” “too remote,” or “purely contingent” are insufficient. Hemi, 559 U.S. at 2, 130 S.Ct. 983 (quoting Holmes, 503 U.S. at 271, 274, 112 S.Ct. 1311) (internal quotation marks omitted).

In a string of cases, the Supreme Court has made it clear that proximate causation is lacking when the alleged harm is distinct from the alleged RICO violation. Id. at 10-11, 130 S.Ct. 983 (citing Anza, 547 U.S. at 460-61, 126 S.Ct. 1991); See also Holmes, 503 U.S. at 271, 112 S.Ct. 1311. In the first of these cases, Plaintiff-Respondent Securities Investor Protection Corporation (“SIPC”), alleged that Petitioner-Defendant Robert G. Holmes, Jr. (“Holmes”), was involved in a stock-manipulation scheme that forced the liquidation of two broker-dealers. Holmes, 503 U.S. at 261, 112 S.Ct. 1311. As a result of the liquidation, the broker-dealers were prevented from meeting obligations and SIPC was forced to advance funds to reimburse the broker-dealers’ customers under the Securities Investor Protection Act of 1970 (“SIPA”). Id. Alleging securities, wire, and mail fraud as predicate acts,.SIPC brought suit under RICO. Id. at 262, 112 S.Ct. 1311. The district court entered summary judgment for Holmes, ruling that SIPC did not have standing to assert .RICO claims because proximate cause was lacking. Id. at 263, 112 S.Ct. 1311. The Ninth Circuit disagreed and reversed. Id. at 264, 112 S.Ct. 1311.. The Supreme Court sided with the district court, stating that the link between the stock manipulation (the alleged RICO violation) and the customers’ harm (the alleged harm in the case because SIPC’s argument was based on sub-rogation) was too remote because the customers’ harm was “purely contingent on the harm suffered by the broker-dealers.” Id. at 271, 112 S.Ct. 1311. Analogizing to the judiciary’s general method of analyzing legal damages, the Court stated that a proximate cause analysis under RICO should not “go beyond the first step.” Id. at 271-72, 112 S.Ct. 1311 (internal citation omitted). In doing so, the Court solidified the idea that there must be “some direct relation between the injury • asserted and the injurious conduct alleged” in order for a plaintiff to have standing to assert RICO claims. Id. at 268,112 S.Ct. 1311.

In the second case in this series, the Court reiterated the direct-injury limitation of RICO standing. Plaintiff-Respondent Ideal Steel Supply Corporation (“Ideal”) sued Defendant-Petitioners Joseph and Vincent Anza, the owners of Ideal’s principal competitor under RICO. Anza, 547 U.S. at 454, 126 S.Ct. 1991. Ideal alleged ongoing mail and wire fraud through the submission of fraudulent tax returns, as predicate acts constituting a “pattern of racketeering activity.” Id. After the district court granted Defendant-Petitioners’ 12(b)(6) motion, the Second Circuit vacated the judgment, finding that the plaintiff had adequately pled proximate cause and had standing. Id. at 455, 126 S.Ct. 1991. The Supreme Court disagreed. Id. at 462, 126 S.Ct. 1991. Citing Holmes, the Court concluded that “the absence of proximate cause is ... clear” because “the cause of Ideal’s asserted harms ... is a set of actions (offering lower prices) ... entirely distinct from the alleged RICO violation (defrauding the State).” Id. at 458,126 S.Ct. 1991.

Finally, in Hemi, Plaintiff-Respondent New York City, brought suit against Defendant-Petitioner Hemi Group (“Hemi”), alleging that Hemi’s failure to file reports required of .out-of-state cigarette sellers under the Jenkins Act constituted mail and wire fraud (“racketeering activities” subject to enforcement under RICO) and deprived the city of tax revenue. Hemi, 559 U.S. at 4, 130-S.Ct. 983. When the case reached the Supreme Court, the Court cited its prior Anza and Holmes decisions in ruling that proximate cause was lacking, stating that “the focus [in the RICO context] is on the directness of the relationship between the conduct and harm.” Id. at 12, 130 S.Ct. 983. The Court concluded the city’s causal theory was far too attenuated because the alleged fraud was selling cigarettes to city residents and failing to submit the required customer information to the state, while the alleged injury was the city’s inability to collect back taxes due on those sales. Id. at 9-11, 130 S.Ct. 983.

In this case, the court need not “go beyond the first step.” See Holmes, 503 U.S. at 271-72, 112 S.Ct. 1311 (internal citation omitted). Unlike Anza, Holmes, and Hemi, where “the conduct directly causing the harm was distinct from the conduct giving rise to the fraud,” Hemi, 559 U.S. at 11, 130 S.Ct. 983, the alleged harm and alleged RICO violation in this case are directly connected. See Doc. 1 at Will, 114, 118-273. Allstate’s alleged harm is the overpayment of at least 51 claims based on fraudulent bills and reports, and the alleged fraud is Defendants’ submissions of fraudulent bills and reports, which Allstate then paid by settlement checks sent via U,S. mail. Id. Thus, rather than being an indirect or incidental party to the fraud, Allstate was the object of it. See Allstate Ins. Co. v. Plambeck, 802 F.3d 665, 676 (5th Cir.2015) (concluding proximate cause was satisfied‘ in a similar case because “[t]he -objective of the enterprise was to collect from insurance companies; ... Allstate’s paying up was not just incidental but was the object of the collaboration.”).

In an attempt to deflect focus from the directness of the relationship between the alleged harm and alleged fraud, BCPC Defendants cite Allstate insurance Co. v. Rehab Alliance of Texas, Inc., No. 14-13-00459-CV, 2015 WL 1843249, at *6 (Tex. App.-Houston' [14th Dist.], Apr. 21, 2015, pet. denied), for the proposition that Allstate must “attribute” or “quantify” its damage in order to sufficiently plead standing. Doe. 20 at ¶6. However, that case is inapposite. Rather than addressing RICO standing at all, much less at the motion tq dismiss stage, the appeals,court in-. Rehab Alliance -affirmed the district court’s grant of a no-evidence motion for summary judgment, concluding that Allstate failed to marshal sufficient evidence to support the injury element of its common-law fraud claim. Rehab Alliance, 2015 WL 1843249, at *8. Importantly, “[t]he evidentiary burden on the non-movant in a summary judgment motion is significantly greater than in a motion to dismiss.” Reese v. Anderson, 926 F.2d .494, 498 .(5th Cir. 1991). As even the Rehab court acknowledged, “[t]he Court’s task ‘in ruling on a Rule 12(b)(6) motion is merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof.’ ” Id. at *7, 130 S.Ct. 983 (quoting Allstate Ins. Co. v. Seigel, 312 F.Supp.2d 260, 269-270 (D.Conn.2004)).

Defendants also argue that Plaintiffs’ failure to take into account other factors such as. the decisions of third parties makes Plaintiffs’ claims too speculative to support standing. Doc. 20 at ¶ 2-6, Doc. 21 at pp. 11-14. Defendant Sanderson cites Little v. KPMG, LLP, 575 F.3d 533 (5th Cir.2009), for this proposition. Doc. 21 at pp. 12-13. Defendants again miss the mark with this line of reasoning. First, KPMG addresses Article III, not statutory, standing. Second, in that case, the court of appeals affirmed the district court’s dismissal of the case under Rule 12(b)(1) because a group of defendant-accounting firm’s competitors depended on a three-step chain of speculative causation to connect their alleged injury to defendant’s actions. Id. at 540. There is no such speculative causal chain in this case.

It is axiomatic that Plaintiffs must satisfy both statutory and constitutional standing requirements to proceed with their case. See Steel Co. v., Citizens for a Better Env’t, 523 U.S. 83, 84, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) (stating that statutory and Article III standing are analyzed separately). See also Cox, Cox, Filo, Camel & Wilson, LLC v. Sasol North America, Inc., No. 2:ll-CV-00856, 2013 WL 4516007, at *2 (W.D.La. Aug. 22, 2013) (citing DeMauro v. De Mauro, 115 F.3d 94, 96 (1st Cir.1997) (stating that although a claim of injury to business or property, as is required for a civil RICO damages action, is sometimes described as a “standing” issue, even when there is plainly a case or controversy under Article III, the statutory precondition of injury to business or property must also be met)). On a motion to dismiss, however, courts presume that general allegations embrace the specific facts that are necessary to support a claim of constitutional standing. Lujan v. Nat’l Wildlife Fed., 497 U.S. 871, 889, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990). Moreover, unlike the Article III standing cases that KPMG follows and relies on, Allstate’s injury is not based on an attenuated, speculative causal chain. Nor are third-party actions, the effects of which are unknown, at issue in this case. The complaint alleges that Allstate has suffered a direct and concrete injury (overpayment of claims to the tune of $414,773.79). This injury has a direct causal connection to Defendants’ actions that satisfies both constitutional and RICO proximate causation standards (as discussed above). The harm is “directly attributable to the improper and fraudulent .. ,billing[s].” Doc. 1 at ¶¶ 121-273. Regardless of any third party’s actions, Allstate’s harm would not have-occurred if Defendants had not submitted fraudulent “records, reports, billings, and other documents ... substantiating the unnecessary and inflated services.” See id, As to the final element of constitutional standing, a favorable decision in this case will address Plaintiffs’ injury, by awarding treble damages.

Assuming the truth of the allegations set forth in the complaint (as it must at this stage), the Court concludes that Allstate has alleged sufficient facts directly connecting the alleged fraud to the alleged harm. As a result, Plaintiffs’ complaint survives a 12(b)(6) motion for failure to state a claim on the issue of statutory standing. The Court also notes that Plaintiffs satisfy Article III standing.

2. Section 1962(c) Claims

With regard to the § 1962(c) claim, Defendants argue that Plaintiffs fail to' (1) sufficiently allege predicate acts; (2) plead fraud with particularity; (3) plead facts demonstrating Defendants caused use of the mails to further a fraudulent scheme; (4) plead acts showing Defendants engaged in a pattern of such acts; and (5) sufficiently allege the existence of an association-in-fact enterprise or enterprise persons. Doc. 11 at ¶¶ 22-41; Doc. 13 at pp. 10-14:

A violation of § 1962(c) requires (1) conduct or participation (2) of an enterprise (3) through a pattern (4) of racketeering activity. Sedima, 473 U.S. at 496,106 S.Ct. 3275. A plaintiff must allege each of these elements in order to state a claim. Id. The Court will address Defendants’ arguments as they relate to each of these elements.

a. Enterprise Status

Defendants argue that Plaintiffs’ RICO claims fail as a matter of law because Plaintiffs have not pled facts showing the existence of a RICO enterprise. Doc 11 at ¶¶ 34-41; Doc. 13 at pp. 13-14; Doc. 20 at ¶¶ 21-24. Count one of Plaintiffs’ complaint alleges a violation of 18 U.S.C. § 1962(c) by an association-in-fact enterprise consisting of GHIPA, Benhamou, and Choudhri. Doc. 1 at ¶¶ 104-111. Count two alleges a violation of the same subsection by an entity enterprise consisting of GHIPA (known as the “Center Enterprise”) with BCPC, Benhamou, Choudhri, and Sander-son as “enterprise persons.” Id. at ¶¶ 112-115. Defendants challenge the sufficiency of Plaintiffs’ allegations of a RICO enterprise, arguing that Allstate fails to plead the required distinction between the “enterprise” and “enterprise persons.” Doc. 11 at ¶¶ 34-41; Doc. 20 at ¶¶ 21-24. Defendants also argue that the complaint fails to establish the purported association-in-fact enterprise because Allstate does not plead facts that the purported association existed for purposes other than to commit the predicate acts, is an ongoing organization, or functions as a continuing unit as shown by a' hierarchical or consensual decision-making structure. Doc. 11 at ¶¶ 34-37; Doc. 13 at pp. 13-14.

1) Distinction Between the “Enterprise” and “Enterprise Persons” Is Sufficiently Alleged

RICO makes it “unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign 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.” Boyle v. United States, 556 U.S. 938, 943-45, 129 S.Ct. 2237, 173 L.Ed.2d 1265 (2009) (quoting 18 U.S.C. § 1962(c)) (internal quotation marks omitted). Thus, to establish liability under § 1962(c) one must allege and prove the existence of two distinct entities: (1) a “person”; and (2) an “enterprise” that is not simply the same “person” referred to by a different name. N. Cypress Med. Ctr. Operating Co. v. CIGNA Healthcare, No. 4:09-CV-2556, 2011 WL 5325785, at *7 (S.D.Tex. Nov. 3, 2011), aff'd sub nom. N. Cypress Med. Ctr. Operating Co., Ltd. v. Cigna Healthcare, 781 F.3d 182 (5th Cir.2015) (quoting Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 161, 121 S.Ct. 2087, 150 L.Ed.2d 198 (2001)) (internal quotation marks omitted). However, although a defendant may not be both a person and an enterprise, a defendant may be both a person and a part of an enterprise. St. Paul, 224 F.3d at 447 (internal citation and quotation omitted).

In order to avoid dismissal for failure to state a RICO claim, a plaintiff must plead specific facts, not mere conclu-sory allegations, which establish the existence of an enterprise. Foufas, 867 F.2d 877, 881 (5th Cir.1989) (citing Montesano v. Seafirst Commercial Corp., 818 F.2d 423 (5th Cir.1987)). RICO defines an enterprise as “any individual, partnership, corporation, association or other legal entity, and any union or group of individuals associated in fact although not a legal entity.” Plambeck, 802 F.3d at 673 (quoting 18 U.S.C. § 1961(4)) (internal quotation marks omitted). Accordingly, a RICO enterprise can be either a legal entity or an association-in-fact. Crowe v. Henry, 43 F.3d 198, 204 (5th Cir.1995).

BCPC Defendants argue that Allstate fails to meet its burden to plead the required distinction between the alleged enterprise and alleged enterprise persons. Doe. 20 at ¶ 21-24. In Count one of the complaint, Plaintiffs allege that OHIPA, Benhamou, and Choudhri are an association-in-fact enterprise with each person “fulfilling a specific role to carry out and facilitate its purpose.” Doc. 1 at ¶ 104.

Despite the somewhat confusing hair splitting that has occurred in this area of RICO case law over the last decade, this type of overlap between alleged enterprise persons and an association-in-fact enterprise is recognized. See St. Paul, 224 F.3d at 447 (“Although a defendant may not be both a person and an enterprise, a defendant may be both a person and a part of an enterprise.”) (quoting Atlas Pile Driving Co. v. DiCon Fin. Co., 886 F.2d 986, 995 (8th Cir.1989)); Riverwoods Chappaqua Corp. v. Marine Midland Bank, N.A, 30 F.3d 339, 344 (2d Cir.1994) (“A corporate entity may be held liable ... where it associates with others to form an enterprise that is sufficiently distinct from itself. In this regard we have noted that a section 1962(c) claim may be sustained where there is only a partial overlap between the RICO person and the RICO enterprise and that a defendant may be a “RICO ‘person’ and one of a number of members of the RICO ‘enterprise,’ ”); Allstate Ins. Co. v. Valley Physical Med. & Rehab. P.C., No. 05-5934, 2009 WL 3245388, at *6 (E.D.N.Y.2009) (finding sufficient pleading of an association-in-fact enterprise which was composed of corporate entities and their principals where both the corporate entities and their principals were also alleged as individual RICO persons).

In St. Paul, the Fifth Circuit distinguished its earlier holdings in Burzynski and Crowe, stating that although the identified defendants — the RICO persons— were essentially the alleged association-in-fact, “[a] collective entity is something more than the members of which -it is comprised.’’ 224 F.3d at 447 (internal citation and quotation marks omitted). The court reasoned that to find otherwise would permit an individual member of a collective enterprise, such as an association-in-fact, to escape prosecution for violating § 1962(c) because he would not be considered distinct from the enterprise. Id. In explaining the rationale for recognizing the difference, the court-explicitly acknowledged the use of the pleading method employed in this case:

To get around having a corporation named as both a RICO defendant and a RICO enterprise, many plaintiffs have charged the corporation as being part of an association-in-fact enterprise and also as a RICO defendant. Courts have roundly criticized this formulation. In some ways, that formulation parallels the situation where, individuals are named as defendants and as being part of an association-in-fact, and accordingly, the criticism has fed the notion that no defendant can be a part of the association-in-fact enterprise or it would violate the person/enterprise distinction. But the criticism pertaining to having corporations listed as being a part of the association-in-faet is due to the fact that a §■ 1962(c) enterprise must be more than an association of individuals or enti- • ties conducting the normal affairs of a defendant -corporation. The criticism is generally unwarranted where corporations are not involved.

224 F.3d at 434 n. 16 (internal citations omitted) (emphasis added). The court went on to explain further:

[W]hen Bishop, the decision to which the Burzynski court cited for support, held that to state a § 1962(c) claim, a plaintiff had to distinguish between the RICO person and the RICO enterprise, it was not making the stveeping generalization that any congruence between a RICO person and a member of an association-in-fact, which constituted a RICO enterprise, violated the person/enterprise distinction. Instead, Bishop merely concurred with the vast majority : of the circuits that held that a § 1962(c) claim requires a distinction between the RICO person and the RICO enterprise. Those circuits were discussing the person/enterprise distinction where the plaintiffs were alleging a corporate entity as both a RICO defendant and a RICO enterprise. Bishop itself involved a plaintiff who sought, a § 1962(c) claim against a single corporate defendant, which was also named as the RICO enterprise. The reason .for differentiating in .the § 1962(c) context, between cases where a corporation, is identified as both the enterprise and the defendant and cases where it is not was aptly noted in the Haroco decision, to which ■ Bishop heavily deferred.

Id. at 446^17 (internal citations omitted) (emphasis added). When one reads the Haroco decision, the matter becomes even clearer:

[A] corporation and an association' in fact differ substantially with respect to the “person” element. Where persons associate “in fact” for criminal purposes, each person may be held liable under RICO for his, her or its participation in conducting the affairs of the association in fact through a pattern of racketeering activity. But the nebulous association in fact does not itself fall within the RICO definition of “person.” We doubt that an “association in fact” can, as such, hold any interest in property or even be brought into court. In the association in fact .situation, each participant in the enterprise may be a “person” liable under RICO, but the association itself cannot be.

Haroco, Inc. v. Am. Nat. Bank & Trust Co. of Chicago, 747 F.2d 384, 401 (7th Cir.1984), aff'd, 473 U.S. 606, 105 S.Ct. 3291, 87 L.Ed.2d 437 (1985) (emphasis added).

In this case, the association-in-fact consists of GHIPA, Benhamou, and Chou-dhri, all three of whom have been named as defendants in this case, but as the Har-oco case, a ruling upon which this circuit’s precedent rests, makes clear, an association-in-fact is not a “person” for RICO purposes. Thus, the association-in-fact of GHIPA, Benhamou, and Choudhri is not a person, and is therefore distinct: from GHIPA, Benhamou, and Choudhri as “persons.”

Moreover, notwithstanding the required' enterprise-person distinction in the corporate context, a corporate entity may be held liable where it associates with others to form an enterprise that is sufficiently distinct from itself. St. Paul, 224 F.3d at 447. The key inquiry under this test focuses on whether the § 1962(c) enterprise is “more than an association of individuals or entities conducting the normal affairs of a defendant corporation.” Id. at 434 n. 16. Here, Plaintiffs allege that the normal affairs of the GHIPA entity include provision of pain management services. See Doc. 1 at ¶¶ 17-51. The association-in-fact enterprise consisting of GHI-PA, Benhamou, and Choudhri, however, is alleged to be conducting activities beyond normal affairs, specifically by conducting unnecessary procedures and charging inflated rates in automobile accident cases covered by letters of protection. See id. at ¶¶ 52-102. Accordingly, this Court finds that the distinctiveness requirement has been met with regard to the alleged association-in-fact enterprise in' count' one of Plaintiffs’ complaint.

Count two of the complaint alleges that GHIPA, a legal entity, is the enterprise. GHIPA is not also alleged to be an enterprise person, only BCPC, Benhamou, Choudhri, and Sanderson are. Because the enterprise and enterprise persons are distinct, this pleading is sufficient.

2) Separate Purpose Is Pled

Regardless of whether an enterprise is alleged to be a legal entity or an association-in-fact, the enterprise must be an entity separate and apart from the pattern of activity in which it engages. Old Time Enters., Inc. v. Int’l Coffee Corp., 862 F.2d 1213, 1217 (5th Cir.1989). Thus, a plaintiff must plead specific facts which establish that' the association exists for purposes other than simply to commit the predicate acts. Foufas, 867 F.2d' at 881. Although proof of one does not necessarily establish the other, “evidence used to prove the pattern of racketeering activity and the evidence establishing an enterprise ‘may in particular cases coalesce.’” Boyle, 556 U.S. at 947, 129 S.Ct. 2237 (quoting United States v. Turkette, 452 U.S. 576, 583, 101 S.Ct. 2524, 69 L.Ed.2d 246 (1981)). As the Supreme Court has recognized, “the existence of an association-in-fact [enterprise] is oftentimes more readily proven by what it does, rather than by abstract analysis of its structure.” Id. at 951,129 S.Ct. 2237.

Defendants argue that Allstate fails to plead specific facts plausibly establishing that the purported association exists for purposes other than to commit the predicate acts. Doc. 11 at ¶ 35; Doc. 13 at p. 13. Both defendants cite to Donovan and Giv-enter in support. Those cases are not controlling. Defendants’ reliance on Giventer is misplaced because that case concerns claims against a chiropractic clinic/law office combination that did not provide services to any legitimate patients. State Farm Mut. Auto. Ins. Co. v. Giventer, 212 F.Supp.2d 639, 650 (N.D.Tex.2002). Although the Donovan case more closely aligns with the facts of this case, it too, is distinguishable. Because the Donovan court found that the allegations .contained in the complaint were “not capable of establishing that the enterprise treats other, legitimate, patients, i.e., patients. whose claims are not fraudulently inflated,” it concluded the allegations were not capable of establishing that the association-in-fact enterprise had an existence separate and apart from the pattern of racketeering activity. Allstate Ins. Co. v. Donovan, No. 12-0432, 2012 WL 2577546, at *13 (S.D.Tex. July 3, 2012).

In contrast to Giventer and Donovan, however, Plaintiffs’ complaint contains multiple allegations that are capable of establishing that the enterprise provided services to a number of legitimate patients and began doing so before the alleged fraud even began. See, e.g., Doc. 1 at ¶¶46, 50, 51. Such allegations illustrate that the purported association exists for purposes other than to commit the predicate acts. See Allstate Ins. Co. v. Michael Kent Plambeck, D.C., No. 3:08-CV-388-M, 2014 WL 1303000, at *3 (N.D.Tex. Mar. 31, 2014), ajfd sub nom. Allstate Ins. Co. v. Plambeck, 802 F.3d 665 (“Plaintiffs also presented sufficient evidence that the enterprise had an existence separate and apart from the alleged racketeering activity, e.g., that the enterprise solicited and provided treatment and representation to patients who actually required such treatment.”); Crowe, 43 F.3d at 205 (concluding that .the farming venture alleged existed separate and apart from the pattern of racketeering because the participants’ association extended beyond the alleged acts of fraud and theft). For example, in paragraph 46, Allstate alleges that Benhamou testified in state court that of the two GHIPA offices, only Houston had “a big attorney practice.” Doc. 1 at ¶46. The complaint goes on to state that in addition to the automobile cases at issue in the alleged fraud, GHIPA, Benhamou, and Choudhri treat Medicare patients. Id. at ¶ 50. The complaint gives exact dollar figures of the amounts billed to Medicare for the year 2012 and alleges that the “highest charged Medicare service in 2012 was for neurostimulation implants” — a procedure that is not performed in automobile accident cases. Id. at ¶¶50, 51. The Court finds that these allegations are capable of establishing that the association-in-fact enterprise had a purpose serving legitimate patients that was separate from the alleged pattern of racketeering activity.

3) Legal Entity Enterprise Is Sufficiently Alleged

Count two of Plaintiffs’ complaint alleges that GHIPA is an “enterprise” as defined in 18 U.S.C. 1961(4). Id, at ¶ 112. Plaintiffs refer to this enterprise as “the Center Enterprise.”

“A legal entity [enterprise] is one that ‘has sufficient existence in legal contemplation that it can function legally, be sued or sue and make decisions through agents as in the case of corporations.’” Bonner v. Henderson, 147 F.3d 457, 459 (5th Cir.1998) (quoting Black’s Law Dictionary (6th ed. 1990)). See also United States v. Griffin, 660 F.2d 996, 999 (4th Cir.1981) (stating that “legal entity” as used in RICO enterprise definition contemplates inclusion of legal associations such as corporations and partnerships). Accordingly, “proof simply of the ‘legal’ existence of the corporation, partnership, or other legal form of organization charged” is presumably sufficient to prove existence of a legal entity enterprise. Griffin, 660 F.2d at 999.

Plaintiffs have alleged that GHI-PA is a professional association organized under the laws of Texas. Doc. 1 at ¶ 13. This allegation satisfies the statutory definition of an enterprise. See 18 U.S.C. § 1961(4). See also Donovan, 2012 WL 2577546 at *10 (concluding that Texas limited partnership is a legal entity for enterprise status). Accordingly, GHIPA has sufficiently alleged the existence of an entity enterprise.

4) Association-in-Fact Enterprise Is Sufficiently Alleged

Defendants next argue that Plaintiffs do “not plead specific facts showing that the proposed association-in-fact enterprise is an ongoing organization or that it functions as a continuing unit as shown by a hierarchical or consensual decision-making structure.” Doc. 11 at ¶ 37; Doc. 13 at p. 13.

When the alleged enterprise is an association-in-fact enterprise, the plaintiff must show evidence of: (1) an existence separate and apart from the pattern of racketeering; (2) ongoing organization; and (3) members that function as a continuing unit as shown by a hierarchical or consensual, decision-making structure. Delta Truck, '855 'F.2d at 243. See also Boyle, 556 U.S. at 946, 129 S.Gt. 2237 (recognizing' that “an association-in-fact enterprise' must have at least three structural features: purpose, relationships among those associated with the enterprise, and longevity sufficient to permit these associates to pursue the enterprise’s purpose”). In other words, a plaintiff must explain the functioning- of alleged enterprises to satisfy the pleading standard for the enterprise element. Old Time, 862 F.2d at 1218.

a. Ongoing Organization Is Sufficiently Pled

“Continuity or the ongoing nature of an association in fact is the linchpin of enterprise status.” Calcasieu Marine Nat. Bank v. Grant, 943 F.2d 1453, 1462 (5th Cir.1991) (quoting Ocean Energy II, Inc. v. Alexander & Alexander, Inc., 868 F.2d 740, 749 (5th Cir.1989)) (internal quotation marks omitted). To qualify as an enterprise, there must be “continuity of ... structure and personnel, which links the defendants, and a common or shared purpose.” Id. (citing Shaffer v. Williams, 794 F.2d 1030, 1032-33 (5th Cir.1986)). The ongoing-organization element of enterprise status simply requires “longevity sufficient to permit ... associates to pursue the enterprise’s purpose.” Boyle, 556 U.S. at 946,129 S.Ct. 2237.

Allstate’s complaint states that the association-in-fact and center enterprises have been engaged in the alleged fraud since at least 2010. Doc. 1 at ¶¶ 1,104,121-273 279, 282, 289, This allegation is sufficient to satisfy the ongoing-organization element of pleading an association-in-fact enterprise. See, e.g,, Crowe, 43 F.3d at 205 (concluding that ongoing-organization status was adequately pled because the association-in-fact enterprise lasted for almost four years and “might have gone on indefinitely.”),

b. Hierarchical or Consensual Decision-Making Structure Is Sufficiently Pled

Defendants particularly take issue with the adequacy of Plaintiffs’ allegations regarding the structure of the association-in-fact enterprise. Defendants claim that “Allstate’s description of each Defendant’s separate business affairs does not show the existence of an ascertainable structure of an ongoing organization and, particularly any decision-making structure.” Doc. 11 at ¶ 37; Doc. 13 at p. 14.

RICO does not require that an enterprise be a separate business-like entity. Michael Kent Plambeek, 2014 WL 1303000, at *3 (citing Boyle, 556 U.S. at 945, 129 S.Ct. 2237). An association-in-fact enterprise is simply a continuing unit that functions with a common purpose and course of conduct. Boyle, 556 U.S. at 950, 129 S.Ct. 2237. Although each member of the enterprise must also share this common purpose, Michael Kent Plambeek, 2014 WL 1303000, at *3, the enterprise concept is broad. Boyle, 556 U.S. at 949, 129 S.Ct. 2237. An association need not have a “hierarchical structure,” a “chain of command,” or any formalized procedures. Id. at 948, 129 S.Ct. 2237. Decisions may be made on an ad hoe basis and members need not have fixed roles. Id. Thus, alleging that association-in-fact members actively associate with one another and work cooperatively and illegally to achieve a goal is sufficient to establish plausible enterprise status. Adhikari v. Daoud & Partners, 697 F.Supp.2d 674, 692 (S.D.Tex. 2009). Interdependent and coordinated associations that exist to perpetuate the enterprise. and its profitability likewise satisfy the common-purpose structural element. Michael Kent Plambeek, 2014 WL 1303000, at *3. See also United States v. Elliott, 571 F.2d 880, 898 (5th Cir.1978) (noting that a shared “desire to make money” is sufficient to, satisfy RICO’s common-purpose requirement).

Two cases in particular illustrate the breadth of the enterprise concept within this circuit. In Crowe, the Fifth Circuit concluded that the structural element of enterprise status was adequately pled because the members of the alleged association-in-fact enterprise were equal partners and met on a regular basis to make decisions concerning the operation. 43 F.3d at 205; In another more recent case, the court found that allegations that a defendant “was part of a unit, that even absent any decision-making structure, worked cooperatively and illegally to achieve, [the enterprise’s] goal” was sufficient to survive a 12(b)(6) motion. Adhikari, 697 F.Supp.2d at 692. .

Benhamou and Choudhri are' allegedly equal partners of GHIPA and BCPC and make shared decisions on a regular basis, just as the defendants 'in Crowe. Doc; 1 at ¶¶ 33, 37, 40, 41, 48,.59, 62, 63, .94, 100. As in Adhikari, ■ Plaintiffs in this case allege that the association-in-fact members actively associated with, one another and worked cooperatively and illegally to achieve the goal of defrauding Plaintiffs. Id. at ¶ 108. Both allegations are sufficient to establish plausible enterprise status under this circuit’s precedent.

Defendants cite Gonzalez v. Bank of AmeHca in support of their arguments and for the proposition that “each party’s conducting of its own affairs is not hierarchical or consensual decision making or an ongoing organization.” Doc. 11 at ¶ 37; Doc. 13 at p. 14 (quoting Gonzalez, No. 09-2946, 2011 U.S. Dist. LEXIS 16963, at *20 (S.D.Tex. Feb. 20, 2011)) (internal quotation marks omitted). However, that case is distinguishable. What Defendants fail to recognize is that the relationships among the members of the alleged association-in-fact in Gonzalez were entirely distinct from the relationships at issue in this case. There, the association-in-fact enterprisé was composed of Bank of America- and several other independent companies separately engaged in different aspects of the insurance industry. Their only ties to one another were in contractual relationships regarding the process of selling and providing insurance. Thus, in finding that the plaintiff had failed to allege sufficient facts to satisfy enterprise status, the independent operational status of the defendants was key:

Gonzalez does not have a single fact showing that the defendants operate ... as a continuing unit with a hierarchical or consensual decision-making structure. At best, some of the defendants had separate roles in the selling of insurance; but each party’s conducting of its own affairs is not hierarchical or consensual decision making or an ongoing organization. Nothing suggests the defendants participated in a hierarchy beyond their contractual relationships — if the defendant had a role at all.

Gonzalez, 2011 U.S. Dist. LEXIS'16963, at *20-21.

Donovan is similarly distinguishable. In Donovan, several independent businesses were members of an alleged association-in-fact enterprise engaged in “interenterprise referrals” in an effort to convert “otherwise ‘soft-tissue’ bodily injury claims into major medical claims.” Donovan, 2012 WL 2577546, at *2, 14. The court held that “[mjerely pleading that there are several businesses and individuals that sometimes work with each other” and “identiffying] and describ[ing] the specific roles that each defendant plays in providing healthcare services to their injured patients and running their respective businesses” was insufficient to establish enterprise status. Id. at ■ *14 (emphasis added). The court went on to note that the complaint lacked “factual allegations capable of establishing how the alleged scheme was formed, who, if anyone, was in charge, how each of the defendants participated: in the alleged scheme other than providing independent services, or whether there were communications, agreements, or an understanding between the alleged parties that advanced the fraud.” Id. at *14.

In contrast to both Gonzalez and Donovan, the alleged association-in-fact before this Court deals with only one business entity and two individuals. Importantly, the business entity is wholly owned and controlled by the two individuals. Doc. 1 at ¶ 33. Even were it to include BCPC and Sanderson, however, the analysis would not change. BCPC was also wholly owned by Choudhri and Benhamou. Id. at ¶37. Sanderson was employed there. Id. at ¶ 41. Therefore, Choudhri and Benhamou operated all of the pieces — -regardless of whether BCPC and GHIPA can technically be termed “separate” businesses. Thus, unlike the members of the alleged associations-in-fact who ran their respective businesses independently of one another in Gonzalez and Donovan, GHIPA, BCPC, Choudhri, Benhamou, and Sanderson are each parts of a dependent business structure. Moreover, the complaint contains factual allegations establishing how the alleged scheme was formed, who was in charge, and how each of the defendants participated in the alleged scheme. Id. at ¶¶ 16-101, 108. Consequently, this Court finds that the structural element of enterprise status has been adequately pled.

b. Participation or Management.

In order to determine what the phrase “to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs” in 18 U.S.C. § 1962(c) means, the Supreme Court first examined the meaning of the terms “conduct” and “participate.” Reves v. Ernst & Young, 507 U.S. 170, 177-79, 113 S.Ct. 1163, 122 L.Ed.2d 525 (1993). The Court concluded that “conduct,” both as a noun and as . a verb in the subsection, requires some level of direction while the word “participate” requires some part in that direction. Id. at 178-79, 113 S.Ct. 1163. Accordingly, “[i]n order to ‘participate, directly or indirectly, in the conduct of such enterprise’s affairs,’ one must have some part in directing those affairs.” Id. at 179, 113 S.Ct. 1163. Although some part in directing the enterprise’s affairs is required for liability, the Court likewise explained that the use of the words “participate” and “directly or indirectly” indicate that RICO liability is not limited to those with primary responsibility for the enterprise’s affairs or a formal position in- the enterprise. Id. Thus, lower rung participants in the enterprise who are under the direction of upper management as well as those “associated with” the enterprise who exert control over it can be liable. Id. at 184, 113 S.Ct. 1163.

Although one need not be a ringleader, the Fifth Circuit has made clear that a defendant must have some supervisory involvement in an enterprise in order to satisfy § 1962(c)’s conduct or participate requirement. Plambeck, 802 F.3d at 675 (acknowledging that defendants had limited roles but nevertheless finding they “participated in managing the enterprise with their supervisory roles in their respective parts of the scheme.”). Thus, simply providing goods or services that ultimately benefit the enterprise will not subject one to liability. In re MasterCard Intern. Inc., Internet Gambling Litig., 132 F.Supp.2d 468, 489 (E.D.La.2001), aff'd sub nom. In re MasterCard Intern. Inc., 313 F.3d 257 (5th Cir.2002) (quoting Amsterdam Tobacco, Inc. v. Philip Morris, Inc., 107 F.Supp.2d 210 (S.D.N.Y. 2000)) (internal quotation marks omitted). Nor will merely having a business relationship with a RICO enterprise, Compass Bank v. Villarreal, No. 10-8, 2011 WL 1740270, at *13 (S.D.Tex. May 5, 2011) (collecting cases), or simply contributing to the enterprise “with the knowledge of or willful disregard” for the other defendants’ supposed criminal activity. Gonzalez, 2011 U.S. Dist. LEXIS 16963, at *21. Even the receipt of funds or materials on its own, without more, will not establish that a defendant actually operated the scheme to obtain those funds or materials. Davis-Lynch, Inc. v. Moreno, 667 F.3d 539, 551 (5th Cir.2012).

1) Sanderson’s Participation or Management Is Not Sufficiently Alleged

Defendant Sanderson alleges that Plaintiffs have failed to plead facts establishing that Sanderson participated in the operation or management of the enterprise or association-in-fact enterprise as required by the statute. Doc. 13 at p. 10. Plaintiffs respond that Sanderson has ignored the portions of the complaint that allege Sand-erson’s anesthesia services were a “substantial part of the scheme.” Doc. 19 at ¶ 41.

In this case, the complaint alleges that Stephen Sanderson was a nurse anesthetist employed by Bayou City Pain, an entity wholly owned by Benhamou and Choudhri. Doc. 1 at ¶¶37, 41. The complaint goes on to allege that in his capacity as a BCPC anesthetist, Sanderson worked under the supervision of the GHIPA physician (either Benhamou or Choudhri) and performed anesthesia services, including administering “unnecessary general anesthesia.” Id. at ¶¶ 79, 93, 108e, 113d. From these sparse allegations it appears Sander-son had limited involvement in the entity’s affairs. While such limited involvement does not preclude a finding that Sanderson “conducted or participated” in the. enterprise, Plaintiffs’ claims that Sanderson was employed by BCPC, worked at .the direction of Choudhri and Benhamou, and administered unnecessary general anesthesia are insufficient to show that Sanderson had any supervisory role in the scheme. This is true regardless of whether the services he rendered for BCPC were “a substantial part of the scheme.” Doc. 19 at ¶ 41. Accordingly, the RICO claims against Sanderson are subject to dismissal pursuant to Rule 12(b)(6) for failure to state a claim for which relief may be granted.

2) BCPC Defendants’ Participation or Management Is Sufficiently Alleged

BCPC Defendants likewise argue that Allstate has not pled their párticipation or management in the supposed association-in-fact or “center” enterprise with any factual sufficiency. Doc, 11 at ¶¶ 38-41.

As already discussed, and as BCPC Defendants correctly note, neither the provision of goods or services,, the mere existence of a business relationship, simple contributions with knowledge of the scheme, nor the receipt of funds or materials from the scheme is sufficient to subject one to RICO liability. In re MasterCard, 132 F.Supp.2d at 489; Compass Bank, 2011 WL 1740270, at *13; Gonzalez 2011 U.S. Dist. LEXIS 16963, at *21; Davis-Lynch, 667 F.3d at 651. Unlike the factual allegations against Sanderson and those in the cases that BCPC Defendants cite in their defense, however, the complaint alleges that Benhamou, Choudhri, GHIPA, and BCPC did not merely provide services to, conduct a business relationship with, make simple contributions to, or merely receive funds and materials from the enterprise. Rather, the complaint alleges that Ben-hamou and Choudhri were the masterminds of the scheme to defraud Allstate and that GHIPA and BCPC were the tools by which they accomplished the fraud. See, e.g,, Doc. 1 at ¶ 33 (“Choudhri and Ben-hamou are the only persons'who have ever had an ownership interest in GHIPA, .. .”); ¶ 37 (“Benhamou and Choudhri are the only persons to have had an ownership interest' in [BCPC].”); ¶ 40 (“Bayou City Pain only provides services to the two GHIPA offices.”); ¶ 43 (“Bayou City has no independent, defined office space.”); ¶79 (“The nurse anesthetist is under the supervision of the GHIPA physician conducting the procedure.”); ¶ 93 (“Dr. Benhamou has claimed in state court deposition testimony that GHIPA may bill these additional charges, because the services were provided by Bayou City Pain, which is an ‘independent’ company, and he does not supervise the nurse anesthetist.... However, Dr, Benhamou and Dr: Choudhri are the sole owners of Bayou City Pain; Bayou City Pain performs services only for GHI-PA; Bayous City Pain has no office of its own, or even defined office space within GHIPA; GHIPA bills for the anesthesia services within its own, itemize billing; there is no separate bill issued by Bayou City Pain..,.”); ¶49 (“In a November 2013 state court deposition, Benhamou testified the seven GHIPA providers ... each see about 25 patients a day”) (emphasis in original); ¶ 59 (“GHIPA represented these initial examinations were comprehensive examinations of the highest complexity, almost always through the use of the OPT code 99245.”); ¶ 60 (“A 99245 coding represents the examination was for a presenting problem of moderate to high severity, and the examination .,, typically involved] 80 minutes spent by the physician with the patient or the family.”); ¶ 90 (“The itemized billing concludes with separate cha[r]ges for the following services, with no code generally ascribed to them: “Operating room,” “Recovery room,” and “Anesthesia.”); ¶80 (“Once the procedure was completed, the patient is moved to What Defendants characterize as the ‘recovery room.’ The GHIPA recovery room was simply another area of the ‘operating room,’ separated from the area where injection procedures are performed by a curtain.”). In contrast to the allegations against Sanderson, these factual allegations against BCPC Defendants are sufficient to establish their “participation in the operation or management of the enterprise itself.” See Reves, 507 U.S. at 179, 113 S.Ct 1163.

c. Pattern of Racketeering Activity

Defendants argue that Plaintiffs do not plead that Defendants have “committed a single violation of the federal mail fraud statue, much less the two required for RICO.” Doc. 11 at ¶ 22; Doc, 13 at p. 10. Defendants also argue that because the alleged predicate acts are violations of the federal mail fraud statute, Plaintiffs pleadings are - subject to, but fail to satisfy, the heightened pleading requirement of Rule 9(b), Doc. 11 at ¶ 22; Doc. 13 at p. 10.

“Pattern of racketeering activity” is a defined term and has two components. In re Burzynski, 989 F.2d 733, 742 (5th Cir. 1993); 18 U.S.C. § 1961(5). First, there must be at least two predicate acts of “racketeering activity.” Burzynski, 989 F.2d at 742. Second, there must be a pattern of such acts. Id.

1) Predicate Acts of Mail Fraud Are Not Sufficiently Alleged with Regard to Defendant Sanderson, but Are Sufficiently Alleged with Regard to BCPC Defendants

“Racketeering activity,” is defined by reference to various state and federal offenses. Foufas, 867 F.2d at 880; 18 U.S.C, § 1961(1). One of the enumerated crimes is mail fraud. See 18 U.S.C. § 1961(1)(B) (defining any act indictable under 18 U.S.C. •§ 1341 — the mail fraud statute — as “racketeering activity”). Section 1341 “applies, to anyone who knowingly causes to. be delivered by mail anything for-the purpose of executing any scheme or artifice to defraud.” United States v. Whitfield, 590 F.3d 325, 355 (5th Cir.2009) (internal citations and quotation marks omitted). The elements of RICO mail fraud are: (l) a scheme to defraud by means of false or fraudulent representation; (2) interstate or intrastate use of the mails to execute the scheme; (3)- the use of the mails by the defendant connected with or incident to the scheme; and (4) actual injury to the plaintiff. Landry, 901 F.2d at 428. Although reliance is not an element of statutory mail or wire fraud, the Fifth Circuit does require its showing when mail or wire fraud is alleged as a RICO predicate act. In re MasterCard Intern., 313 F.3d at 263. Moreover, because Rule 9(b)’s particularity requirement applies to the pleading of mail fraud as a predicate act in a RICO case, Landry, 901 F.2d at 430, Plaintiffs “must state with particularity the circumstances constituting fraud, or mistake.” Fed. R. Civ. P. 9(b). However, “[m]alice, inte