Full opinion text
I. Background.1046 A. Ashford Castle.1046 B. Dromoland Castle.1047 C. Nuneham Park and Dromoland Conference Centers.1047 D. Distribution of AHL’s Assets.■.1048 E. The Amended Complaint.1048 II Rule 8 .1049 III. R.TCO Claims .1050 A. RICO Standing. 1050 1. Creditor Plaintiffs.1050 2. Investor Plaintiffs .1052 § 1962(c) Claims.'.1053 M 1. Operation or Management of the Enterprise .1054 2. Racketeering Activities.1056 a. Mail and Wire Fraud.1056 i. Existence of a Scheme to Defraud.1056 ii. Use of the Mails.1058 iii. Intent to Defraud.1058 b. Securities Fraud.1060 i. § 10(b) Violations.1062 ii. § 12(2) Violations.1064 c. Bankruptcy Fraud.1064 3. Pattern Requirement.1067 4. Statute of Limitations.1067 C. § 1962(d) Claims.1068 D. Respondeat Superior Claim.1069 IV. Supplemental Claims.1070 A. Jurisdiction.1070 B. Common Law Fraud Claims.1071 C. Breach of Contract.1071 V. Curley’s Motion to Strike.1072 VI. Conclusion.1072 OPINION AND ORDER ROSS, District Judge: The principal plaintiffs in this case are American investors who sought shelter from U.S. tax laws in Irish castles. These plaintiffs contend that the defendants induced them to purchase interests in a scheme to convert these castles into luxury hotels — a project designed to produce tax benefits to upper income investors. They claim that in reality, defendants were perpetrating a type of Ponzi scheme, continually starting new hotel projects in order to pay off the debts of the old. When the project was near collapse, they claim that defendants looted the assets of their enterprise, leaving their creditors— several of whom are also plaintiffs here— unable to collect on their debts. Plaintiffs commenced this action against defendants in the Supreme Court of the State of New York, Nassau County, alleging violations of sections 1962(c) and (d) of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), as well as charges of common law fraud, breach of fiduciary duty, and breach of contract. Defendants removed the action to this court on July 20, 1994. Subsequently, all defendants moved to dismiss the amended complaint pursuant to Rules 8, 9(b), and 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons discussed below, defendants’ motions are granted in part and denied in part. I. Background The factual allegations made by plaintiffs are set out at length in the amended complaint. Since it is assumed that the parties are familiar with the details of these allegations, only a summary of the essential facts is provided below. Naturally, for the purposes of this motion, the court must accept the facts alleged in the amended complaint as true and draw all reasonable factual inferences in favor of the plaintiffs. See, e.g., IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1052 (2d Cir.1993), cert. denied, — U.S. -, 115 S.Ct. 86, 130 L.Ed.2d 38 (1994). A. Ashford Castle Ashford Castle (“Ashford”) is an eighteenth century castle located on the western coast of Ireland that was converted into a luxury resort hotel and later acquired by Allied Irish Bank (“AIB”) as a result of a failed loan. In 1985, defendants Dowling, Nickerson, and Curley decided to purchase Ashford from AIB and sell interests in the castle to investors for profit. Defendants Ashford Castle, Inc. (“ACI”) and Dowmar Securities, Inc. (“Dowmar”), corporations owned and directed by Dowling, Nickerson, and Curley, handled most of the financial matters regarding the Ashford syndication. AIB agreed to be the primary lender for the project. Numerous American investors were successfully solicited via mail by letters and a private placement memorandum (“Ashford PPM”). Among these investors are plaintiffs Burke, Casey, Connor, Higgins, Joyce, Kane, Kaufman, Keelan, Kirkwood, McGouran, McSorley, Millard, and Mulcahy (“Ashford plaintiffs”). ¶ 71. The Ashford PPM described the layout of Ashford and detailed the terms and conditions of the syndication. However, it contained some misrepresentations, which form the basis of the Ashford plaintiffs’ claims. Most significantly, the Ashford plaintiffs claim that the syndication of Ashford was consummated even though the requisite minimum subscription level stated in the Ashford PPM, was never actually reached. Instead, the offerors of Ashford used at least eight “stand-in” investors to meet the minimum subscription level. These investors lent their names to be used as names of bona fide investors, and like the bona fide investors, secured loans from AIB. However, the “stand-ins” never used any of their own money. Their obligations were paid by the offer-ors of Ashford, using the money from the general revenue of the castle. ¶ 78. AIB accepted and processed these “stand-in” payments, and credited the accounts of the “stand-ins” on behalf of whom the checks were being written. The Ashford offerors also received unexplained payments that were taken from the proceeds of the Ashford syndication. Pl.Ex.C. B. Dromoland Castle In 1987, a second fraudulent scheme similar to the Ashford scheme was perpetrated using another Irish castle called Dromoland Castle (“Dromoland”). The Dromoland plaintiffs are Connor, Feeley, Gilgan, Joyce, Kaufman, Keelan, Levine, Loftus, Loughran, MeWeeney, Millard, Charles Milligan, Phoebe Milligan, Moore, and Quinlan (“Dro-moland plaintiffs”). The Dromoland private placement memorandum (“Dromoland PPM”) contained misrepresentations about the financing and the use of proceeds with regard to the Dromo-land project. Also, the syndication of Dro-moland was consummated even though the requisite minimum subscription level stated in the Dromoland PPM, was never achieved on account of a “stand-in” fraud that resembled the one at Ashford. ¶ 94. In addition to all the defendants implicated in the Ash-ford scheme, Dromoland Castles, Inc. (“DCI”), a corporation formerly owned and directed by Dowling, Nickerson, and Curley, is implicated in the Dromoland scheme. Again, revenue from the castles was used to pay the “stand-in” obligations at Dromoland, and for the unexplained personal expenses of the Dromoland offerors. ¶ 102, Pl.Ex.C. C. Nuneham Park and Dromoland Conference Centers Plaintiffs charge that defendants also perpetrated additional fraudulent schemes, but do not allege any injury from these schemes in this action. In 1988, Dowling, Nickerson and Curley formed Ashford Hotels, Ltd. (“AHL”). The complaint is unclear as to the precise relationship between AHL and the other corporations run by these defendants. Plaintiffs simply state that AHL was formed to “consolidate” the management contracts of ACI and DCI, as well as other projects of the defendants. ¶¶47, 55. Defendant Davison joined AHL as a shareholder and director some months after its formation. ¶ 111. With AIB acting again as the primary lender, AHL then attempted to syndicate an English property known as Nune-ham Park. Although plaintiffs do not allege that defendants engaged in a “stand-in” fraud with respect to Nuneham Park, they do claim that funds from the Nuneham Park project were diverted for a number of improper purposes, including the payment of obligations connected with Dromoland. ¶ 123. Defendant Wilde Sapte, AIB’s law firm, is implicated in these diversions. No construction was ever performed on the Nuneham Park project. Plaintiff Higgins, who was also an Ashford investor, is pursuing claims related to Nuneham Park in a separate action in New York state court, along with another Nuneham investor. ¶ 127. After the failure of the Nuneham Park project, AIB demanded that Dowling, Curley and Nickerson make direct payments on the Ashford and Dromoland “stand-in” units. In order to make the payments, they required diversions of additional funds. ¶ 128. Dowl-ing, Nickerson, Curley, Davison and AIB therefore agreed on a new project, involving the expansion of Dromoland Castle and the construction of a Dromoland Conference Center (“DCC”). These funds were subsequently diverted to pay for the “stand-in” obligations at Ashford and Dromoland. Several of the Dromoland unitholders subsequently agreed to pay $2.5 million to the DCC investors in settlement of a claim which the complaint does not identify or explain. ¶ 146. The DCC investors themselves are pursuing a separate action in Ireland, and are not parties to this action. ¶ 147. D. Distribution of AHL’s Assets By late 1991, the “stand-in” frauds and the continued diversion of funds from one project to another had put the directors of AHL under great financial strain. By December of 1991, it was apparent to them that AHL was insolvent. ¶ 150. Defendants then took several steps to protect themselves and AIB by securing as many of AHL’s assets as possible. First, they arranged to have AHL issue them backdated demand notes, thus making it appear that their initial equity investment in AHL was merely a loan. Plaintiffs do not contend that the defendants ever actually collected on these notes, however. Rather, they intended that AHL would deny payment, thereby allowing them to write then-investments off as bad debts for tax purposes. ¶¶ 155-156. Second, AIB instituted proceedings against AHL in the English High Court for collection of a $5.4 million debt stemming from the Nuneham Park project. The AHL directors opted neither to defend this action nor to file for bankruptcy. As a result, AHL obtained a default judgment on September 18, 1992. ¶ 160. AHL then sought to have one of its attorneys, a partner at Wilde Sapte named Mark Gill, appointed as a receiver of an “asset” of AHL. The asset in question was an indemnification agreement, executed by plaintiff Higgins and his co-plaintiff in the Nuneham Park action, Tyree. Under this agreement, Higgins and Tyree apparently agreed to indemnify AHL for certain of its liabilities, although they claim they have no such obligations. ¶ 161. In connection with the receivership proceedings, plaintiffs claim that Gill made numerous false representations to the English court. Most significantly, he swore to an affidavit stating that AHL had no other creditors with an interest in the indemnification agreement. ¶ 162-165. In fact, AHL had numerous other creditors, several of whom have joined as plaintiffs in this action. These plaintiffs (“creditor plaintiffs”) are William Bertram & Fell, Bollinger, Inc., GMA Architecture Ltd., Ove Arup & Partners, and Pa-get, and their claims arise from debts owed to them in connection with yet another hotel project, the Empire Hotel in Bath, England. ¶¶ 163(b), 188. The creditor plaintiffs claim that they are entitled to a share of this asset, but that AIB, AHL and Wilde Sapte obstructed their efforts to gain access to it. As a result of the defendants’ efforts to strip AHL of its assets, they claim, they are now unable to collect on the debts owed to them. E. The Amended Complaint The Amended Complaint alleges seven causes of actions under various theories of liability. The first three causes of action allege violations of RICO. Count One is brought by all plaintiffs against all defendants, and charges that defendants conducted an enterprise through a pattern of racketeering activity, in violation of 18 U.S.C. § 1962(c), based on predicate acts of mail and wire fraud, securities fraud, and bankruptcy fraud. The predicate acts of securities fraud apply to the Ashford and Dromo-land “stand-in” frauds, while the predicate act of bankruptcy fraud applies only to the fraudulent distribution of assets. ¶ 175. Count Two is also brought by all plaintiffs. It alleges that Dowling, Nickerson, Curley, Davison, AIB, and Wilde Sapte conspired to violate RICO through the schemes described above, in violation of 18 U.S.C. § 1962(d). Count Three is brought by all plaintiffs against AIB. It alleges that AIB is vicariously liable under RICO for the actions of Dowling and Gill. The fourth through seventh causes of action seek to recover on various state law grounds. In Count Four, the Ashford and Dromoland plaintiffs charge Dowling, ACI, DCI, Dowmar and AIB with common law fraud. In Count Five, they charge Nicker-son, Curley, and AIB with aiding and abetting fraud. Count Six is apparently brought by all plaintiffs. It seeks to recover, however, against Dowling, Nickerson, Davison, AIB and Wilde Sapte for breach of a fiduciary duty to AHL’s creditors. Count Seven is brought solely by the Dromoland plaintiffs against AIB and DCI for breach of contract with respect to statements made in the Dro-moland PPM and certain loan agreements between the investors and AIB. The Ashford and Dromoland plaintiffs claim that as a result of defendants’ Ponzi-like scheme, the value of their interests in Ashford and Dromoland have greatly decreased. The creditor plaintiffs claim that they have been cheated out of money that they are owed and to which they should have had access. All plaintiffs seek treble damages and punitive damages against all defendants jointly and severally. II. Rule 8 At the outset, defendant AIB argues that the Amended Complaint should be dismissed in its entirety pursuant to Rule 8 of the Federal Rules of Civil Procedure for failure to set forth a “short and plain statement” of plaintiffs’ claims. See Fed.R.Civ.P. 8(a). Initially, the court notes that this argument is somewhat at odds with the contentions of AIB and the other defendants that plaintiffs have failed to plead allegations of fraud with the particularity required by Fed.R.Civ.P. 9(b). AIB nonetheless describes the complaint as a “massive pleading, filled with irrelevant detail, in an effort to convince the Court that somewhere in all those pages a claim must have been stated.” AIB Mem. at 14. To be sure, plaintiffs’ complaint is lengthy. It contains 115 pages and 231 numbered paragraphs, and sets forth seven causes of action by thirty-three plaintiffs against ten defendants. But “long and involved complaints do not per se fail to pass the test of sufficiency under Rule 8.” Karlinsky v. New York Racing Ass’n, 52 F.R.D. 40, 43 (S.D.N.Y.1971). In view of the complexity of the schemes alleged, and the requirement of Rule 9 that allegations of fraud be pleaded with particularity, the Amended Complaint does not seem inordinately long. Rule 8 is designed primarily to ensure that courts and adverse parties can understand a claim and frame a response to it. The Second Circuit has observed that: The statement should be plain because the principal function of pleadings is to give the adverse party fair notice of the claim asserted so as to enable him to answer and prepare for trial. The statement should be short because “unnecessary prolixity in a pleading places an unjustified burden on the court and the party who must respond to it because they are forced to select the relevant material from a mass of verbiage.” Salahuddin v. Cuomo, 861 F.2d 40, 42 (2d Cir.1988) (quoting 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1281, at 365 (1969)) (other internal citations omitted). If a complaint is so “confused, ambiguous, vague, or otherwise unintelligible that its true substance, if any, is well disguised,” a court may dismiss it. Id. Absent extraordinary circumstances, however, it is an abuse of discretion for a court to dismiss a complaint under Rule 8 without granting leave to amend. Id. The cases cited by AIB make it clear that the complaint in this case is not the kind of departure from the “short and plain” standard that the Salahuddin court had in mind. In Moscowitz v. Brown, 850 F.Supp. 1185 (S.D.N.Y.1994), the court dismissed a plaintiff’s complaint after giving him three opportunities to replead. The amended complaint contained a bewildering array of charges, ranging from religious discrimination to defamation to insider trading to prostitution. Id. at 1189. The plaintiff also charged that the New York City Police Department, his former employer, was “an effective subsidiary” of Goldman, Sachs & Co., a prominent New York investment banker. Id. Thus the court had an ample basis for its conclusion that the complaint was “a labyrinthian prolixity of unrelated and vituperative charges.” Id. (quoting Prezzi v. Schelter, 469 F.2d 691, 692 (2d Cir.1972) (per curiam), cert. denied, 411 U.S. 935, 93 S.Ct. 1911, 36 L.Ed.2d 396 (1973)). Similarly, in Lonesome v. Lebedeff, 141 F.R.D. 397 (E.D.N.Y.1992), a pro se plaintiff brought an action alleging a conspiracy to violate his civil rights pursuant to 42 U.S.C. § 1983. In a complaint that contained 452 paragraphs in 62 pages, he made numerous “vague and incomprehensible allegations.” Id. at 398. The court dismissed the complaint, and granted the plaintiff leave to file an amended complaint within twenty days. Plaintiffs in this case have made allegations that are neither vague nor incomprehensible. At a minimum, they place the defendants on notice of the charges against them and allow them sufficient opportunity to prepare a response. Nor are the allegations framed in a manner that places an inordinate burden on this court or opposing counsel. Accordingly, the court finds that the complaint meets the standards of Rule 8. III. RICO Claims Plaintiffs’ first three counts seek to recover for alleged violations of the RICO Act of 1970. The analysis begins, therefore, with the language of the statute, which provides that “[a]ny person injured in his business or property by reason of a violation of § 1962 of this chapter may sue therefor in the appropriate United States district court, and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable áttorney’s fee.” 18 U.S.C. § 1964(c). Based on this language, courts have identified three elements which plaintiffs must establish in order to have standing to sue under RICO. Plaintiffs must allege “(1) a violation of § 1962; (2) injury to business or property; and (3) causation of the injury by the violation.” Hecht v. Commerce Clearing House, 897 F.2d 21, 23 (2d Cir.1990); see also First Nationwide Bank v. Gelt Funding Corp., 27 F.3d 763, 771 (2d Cir.1994), cert. denied, — U.S. -, 115 S.Ct. 728, 130 L.Ed.2d 632 (1995). Causation, for the purposes of the RICO inquiry, requires a showing of both actual or “but-for” causation and a showing of proximate causation. Holmes v. Securities Investor Protection Corp., 503 U.S. 258, 266, 112 S.Ct. 1311, 1317, 117 L.Ed.2d 532 (1992). A RICO violation proximately causes a plaintiff injury when it is “a substantial factor in the sequence of responsible causation, and if the injury is reasonably foreseeable or anticipated as a natural consequence.” Hecht, 897 F.2d at 23. A. RICO Standing At the outset, several of the defendants contend that plaintiffs have not pleaded facts sufficient to demonstrate standing under RICO. Because plaintiffs have alleged predicate acts of fraud as the basis of their RICO complaint, they must plead injury and causation with particularity, as required by Fed.R.Civ.P. 9(b). See First Nationwide, 27 F.3d at 771. For the purposes of this discussion, the court will address the allegations of the creditor plaintiffs and. the Ashford and Dromoland plaintiffs separately. 1. Creditor Plaintiffs Defendants Dowling, Nickerson, Davison, ACI, DCI, Dowmar and AHL (the “Dowling defendants”) argue that the creditor plaintiffs have not alleged an injury cognizable under RICO. Dowling Mem. at 39-40. The court agrees, although for somewhat different reasons than those cited by the defendants. As the Second Circuit has repeatedly noted, a cause of action does not accrue under RICO until damages become clear and definite. First Nationwide, 2,1 F.3d at 768. For this reason, “a plaintiff who claims that a debt is uncollectible because of the defendant’s conduct can only pursue the RICO treble damages remedy after his contractual rights to payment have been frustrated.” Id. Based on a careful reading of the amended complaint, the court concludes that in this ease, the creditor plaintiffs have not adequately alleged such frustration of their contractual rights, and that their RICO claim is not yet ripe. In Bankers Trust v. Rhoades, 859 F.2d 1096 (2d Cir.1988), cert. denied, 490 U.S. 1007, 109 S.Ct. 1642, 1643, 104 L.Ed.2d 158 (1989), the defendants sought to prevent the plaintiff from collecting a debt they owed to him by deceiving a bankruptcy court and bribing state court judges in South Carolina. The plaintiff then filed a RICO action while bankruptcy proceedings were still pending. The court held that a RICO cause of action does not accrue until a plaintiffs claim becomes clear and definite. Id. at 1106. It therefore found that the plaintiff could not maintain a RICO action for its lost debt, because there was still a possibility that it might be recovered in the bankruptcy proceeding. Prior to that time, the plaintiffs damages were unduly speculative. Similarly, in Stochastic Decisions v. DiDomenico, 995 F.2d 1158 (2d Cir.1992), cert. denied, 510 U.S. 945, 114 S.Ct. 385, 126 L.Ed.2d 334 (1993), the plaintiff filed a RICO action against a debtor over whom it had previously obtained two judgments in state court. After the RICO action was filed, the defendant paid one judgment, and the plaintiff had made no effort to collect on the second. Id. at 1162. Although the court awarded the plaintiffs treble damages for its attorney fees spent attempting to collect one judgment, it declined to award damages for the amount of the debts themselves. The Second Circuit upheld this decision, reasoning that one judgment had been paid, and that plaintiffs might still recover part of the second judgment, thereby reducing the RICO claim: Bankers Trust makes it clear that ... a RICO claim does not accrue until it is established that collection of the claim or judgment has been successfully frustrated. In other words, to the extent of a successful collection, the RICO claim is abated pro tanto, prior to any application of trebling. Id. at 1166. In this case, the creditor plaintiffs, with one exception, give no indication that they ever even demanded payment of their debts from AHL, much less sought to obtain a judgment or enforce it. The one exception is plaintiff Paget, whose claim stems from an assignment by the British corporation Beaudesert. The complaint does allege that Beaudesert, through its attorneys, wrote a letter to AHL demanding payment on a debt. ¶ 169. AHL informed Beaudesert that the debt would not be paid. Id. But the complaint does not allege that Beaudesert or Paget ever took any further steps to ensure the collection of the debt. Nor does it adequately allege that such efforts would necessarily be futile. Although plaintiffs repeatedly allege that AHL is “insolvent,” they also contend that it has assets which continue to be distributed to certain creditors. ¶¶ 58-59. Thus, as in Bankers Trust and Stochastic Decisions, there remains — so far as the court can tell from the pleadings — a real possibility that the creditor plaintiffs may be able to recover all or part of their losses. Yet they have not chosen to do so through the traditional legal means available to them. Rather, they seek to recover three times what they are owed by application of the federal antiracketeering statute. To be sure, in GICC Capital Corp. v. Technology Financing Group, 30 F.3d 289 (2d Cir.1994), the court held that a creditor had standing under RICO to sue a debtor company that had defaulted on a promissory note as a result of the actions defendants had taken to strip the company of its assets. The plaintiff in GICC had alleged that the defendant had no prospect of making payment; as in this case, there was no allegation that it had filed for or been placed into bankruptcy. The court noted that the possible availability of a state court action to collect on a debt “does not preclude [the plaintiffs] standing to pursue federal claims in federal court.” Id. at 293. The GICC Capital court, however, did not address the issue of the ripeness of the plaintiffs RICO injury, as the First Nationwide court had done one month earlier. The only issue before the court was the issue of proximate causation. Furthermore, the court had facts from which it could infer a definite loss; the defendant had defaulted on a promissory note that specifically spelled out terms of payment and interest, and the plaintiff had demanded payment. By contrast, here the creditor plaintiffs merely allege, without any further explanation, that they have suffered “a total loss.” Because AHL is continuing to distribute its assets, they do not adequately allege that they have no prospect of payment. Following First Nationwide, the court concludes that they have not alleged facts suggesting that their contractual right to payment has been frustrated. Until these plaintiffs can demonstrate that the orthodox methods of recovery have failed them, and that defendants’ acts of racketeering have in fact caused them a loss, they should not be entitled to treble damages under RICO. The RICO claims brought by the creditor plaintiffs are therefore dismissed without prejudice. If the creditor plaintiffs choose to amend their complaint to show a definite injury, they must also allege that such injury was actually and proximately caused by a RICO predicate act. In this connection, the court notes that the alleged injuries to the creditor plaintiffs appear to flow primarily from the predicate act of bankruptcy fraud, which, for the reasons discussed below, plaintiffs have failed to plead with sufficient particularity. Thus, in an amended complaint, plaintiffs must either plead bankruptcy fraud with particularity or show a direct causal link between their injury and specific acts of mail or wire fraud. 2. Investor Plaintiffs The Ashford and Dromoland plaintiffs allege that the securities they purchased have declined considerably in value as a result of the racketeering activities of the various defendants. They seek to recover for the value of that decline. In addition, Plaintiffs Burke and Higgins seek to recover fees paid to attorneys and accountants for investigation of defendants’ activities, and plaintiff Levine seeks to recover consequential damages arising from his loss of a finder’s fee. ¶¶ 182, 185. Defendants argue, however, that plaintiffs have not alleged the kind of “clear and definite” injury, First Nationwide, 27 F.3d at 768, necessary for them to recover under RICO. AIB Mem. at 32-33; Dowling Mem. at 40-45; Curley Mem. at 21-25. First Nationwide and Bankers Trust make it clear that plaintiffs cannot recover damages that are merely speculative in nature. In this case, however, plaintiffs base their claims of injury on a series of estimates for which they provide no clear factual basis. Plaintiffs calculate their damages by subtracting the estimated current value of the castle interests from the estimated value those interests would have had in the absence of defendants’ fraud. The complaint asserts that the estimated current value of the Ashford Castle interests, in the absence of fraud, would be two-and-a-half times their purchase price, and the current value of the Dromoland Castle interests would be twice their purchase price. ¶¶ 181, 184. In the case of Ashford Castle, they allege that these figures are based on “(i) the dates of purchase ... (ii) the interest paid by the plaintiffs in connection with their purchases, (iii) the substantial operating profits of the castle, and (iv) the paucity of dividends, which if they had been retained rather than diverted would have increased the values of the units.” ¶ 181. In the case of Dromoland Castle, the estimates are based on a similar list of factors. ¶ 184. The complaint does not explain how the plaintiffs arrived at these formulas or even attempt to explain the relationship between these factors. Plaintiffs’ estimates of the actual values are similarly deficient. For Ashford, they claim that the estimate is based on “the lack of success by several ... investors to sell their units; in fact there have been no offers for such units for over a year.” ¶ 181. While plaintiffs’ inability to sell their interests should not necessarily bar them from recovery, it does not provide the court with any helpful guide as to the reliability of their estimates. Nonetheless, the court finds that plaintiffs have alleged sufficient injury to enable them to state a claim under RICO. As plaintiffs note, they need not establish that they can obtain the precise relief they seek to survive this motion, so long as they can demonstrate that they are entitled to some relief. The Limited v. McCrory Corp., 683 F.Supp. 387, 393 (S.D.N.Y.1988). As previously discussed, the complaint does state with particularity the dates, cheek numbers, and amounts of the payments made by ACI and DCI to AIB and to various defendants on the “stand-in” obligations. Pl.Ex.C. Plaintiffs contend that these payments were made from the general revenue of the castles — money which properly belonged to the investors. ¶¶ 178,103. Relying on the “general rule of fraud damages ... that the defrauded plaintiff may recover out-of-pocket losses caused by the fraud,” First Nationwide, 27 F.3d at 768, the court concludes that the investor plaintiffs have alleged an injury to their business or property. 18 U.S.C. § 1964. With the scope of the injury thus narrowed, the court must address the issue of causation. The Ashford and Dromoland plaintiffs contend that their injury was caused by predicate acts of mail and wire fraud and of securities fraud. Specifically, they contend that they were induced to purchase interests in Ashford and Dromoland Castles by fraudulent representations in the offering memoranda. The core of their allegations is that both the Ashford and Dromoland PPMs explicitly stated that closing of the sale of castle interests was contingent upon the attainment of a minimum subscription level. They contend that defendants did not reach the minimum subscription level for either offering through the use of “legitimate” investors. Instead, they solicited numerous “stand-in” investors, whose obligations were to be paid out of the operating revenue of the castles. In the context of an alleged RICO predicate act of mail fraud, a showing of proximate cause requires plaintiffs to allege that they relied on the defendants’ misrepresentations, and that such reliance caused them injury. Metromedia Co. v. Fugazy, 983 F.2d 350, 368 (2d Cir.1992), cert. denied, 508 U.S. 952, 113 S.Ct. 2445, 124 L.Ed.2d 662 (1993); Red Ball Interior Demolition Corp. v. Palmadessa, 874 F.Supp. 576, 586-87 (S.D.N.Y.1995). The court concludes that plaintiffs have adequately alleged reliance. In this ease, the facts withheld from the plaintiffs — the information that “stand-in” investors were being used to meet the minimum subscription levels — were material in the sense that a reasonable person might not have chosen to invest in the castle interests if they had been disclosed. Plaintiffs have alleged that they relied on the statements in the offering memoranda concerning the minimum subscription levels and the qualifications of investors. The court concludes that they have alleged reliance with sufficient particularity to survive a motion to dismiss. Furthermore, it is obvious that the defendants could reasonably have foreseen that their use of castle revenue to pay “stand-in” obligations would cause injury to the investors. Clearly these diversions of funds from castle revenue would ultimately reduce the returns payed to each investor. The investor plaintiffs therefore have standing to pursue RICO claims relating to the “stand-in” scheme against the defendants. With respect to the distribution of AHL’s assets, plaintiffs do not have standing. Unlike the creditor plaintiffs, who describe the debts AHL owes to them and the circumstances in which they arose, the investor plaintiffs do not allege any facts to support the claim that AHL owes them money. They do not, for example, ever claim that AHL assumed the debts or obligations of ACI or DCI, or that AHL ever diverted revenue from Ashford and Dromoland to pay for “stand-in” obligations. It is thus unclear how any of the transactions relating to AHL injured the investor plaintiffs. They therefore cannot maintain a RICO action with respect to these claims. B. § 1962(c) Claims Count One of the Amended Complaint charges all defendants with a violation of 18 U.S.C. § 1962(c), which prohibits the conduct of a business enterprise through a pattern of racketeering activity. Plaintiffs therefore must allege seven constituent elements, namely “(1) that the defendant (2) through the commission of two or more acts (3) constituting a ‘pattern’ (4) of ‘racketeering activity’ (5) directly or indirectly ... participates in (6) an ‘enterprise’ (7) the activities of which affect interstate or foreign commerce.” Moss v. Morgan Stanley, 719 F.2d 5,17 (1983), cert. denied, 465 U.S. 1025, 104 S.Ct. 1280, 79 L.Ed.2d 684 (1984). In this case, plaintiffs describe the “enterprise” as an “association-in-fact” between Dowling, Nickerson, Curley, AIB and Dow-mar Securities that began in January, 1985. Subsequently, the enterprise was joined by ACI and DCI, the corporations which managed the hotel operations at Ashford and Dromoland Castles, respectively. In 1988, after the syndication of these two castles was complete, the enterprise was joined by Davi-son, AHL, and Wilde Sapte. ¶44. Defendants do not challenge plaintiffs’ allegations concerning the existence of an enterprise, or concerning its effect on interstate or foreign commerce. They do, however, challenge the sufficiency of plaintiffs’ RICO allegations on a number of other grounds, which are addressed in turn below. 1. Operation or Management of the Enterprise AIB and Wilde Sapte claim that they are exempt from liability under RICO because they were not closely enough involved in the enterprise to have “conducted” its affairs within the meaning of the statute. They base this argument on the Supreme Court’s holding in Reves v. Ernst & Young, 507 U.S. 170, 113 S.Ct. 1163, 122 L.Ed.2d 525 (1993), which restricted RICO liability to defendants who “participate in the operation or management of the enterprise itself.” Id. at 185, 113 S.Ct. at 1173. AIB and Wilde Sapte each contend that they did not exercise this level of control. The defendants in Reves were accountants who drafted misleading financial statements and were subsequently sued for both securities fraud and RICO violations. Although a jury ultimately found that the defendants had engaged in securities fraud, the Supreme Court upheld the grant of summary judgement in favor of the accountants on the RICO claim, holding that the mere drafting of statements based on information supplied by the board did not constitute sufficient participation in the operation or management of the enterprise. Thus, even if the defendants had engaged in intentional fraud, they could not be held liable under RICO. Reves, however, involved a motion for summary judgment, on which the Court had evidence before it and could reach a final determination. AIB and Wilde Sapte have raised the “operation or management” test in this case in a motion to dismiss pursuant to Rule 12(b)(6). The issue is simply whether plaintiffs can prove any set of facts in support of their claim that would entitle them to relief. See Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957). Moreover, the court is required to accept plaintiffs’ factual allegations as true, and to draw every reasonable inference in favor of the plaintiffs. See, e.g. Cosmos v. Hassett, 886 F.2d 8, 11 (2d Cir.1989). Plaintiffs clearly do state in conclusory form that both AIB and Wilde Sapte participated in the “operation or management” of the enterprise, and “directed” and “exerted control” over various aspects of it. ¶¶ 50, 54. AIB contends, however, that “it takes more than bald conclusory allegations ... to establish RICO liability,” although it offers no authority in support of this proposition. AIB Mem. at 46. Wilde Sapte makes a similar contention, Wilde Sapte Mem. at 21 n. 9, correctly noting even under Rule 12(b)(6), the court is not required to accept “conclusions of law or unwarranted deductions” as true. First Nationwide, 27 F.3d 763, 771 (1994). Nonetheless, plaintiffs are entitled to discovery on their claims so long as they have pleaded some minimal factual basis which would entitle them to relief. Wilde Sapte cites a number of cases in which courts have held that attorneys did not participate in the operation or management of an enterprise merely by providing legal services to it. Like Reves, however, nearly all of these eases arose in a context where the court had facts before it, rather than merely allegations in a complaint. See Nolte v. Pearson, 994 F.2d 1311, 1314 (8th Cir.1993) (affirming district court’s grant of directed verdict); Gilmore v. Berg, 820 F.Supp. 179, 180 (D.N.J.1993) (granting summary judgment to defendants on RICO claim); Biofeedtrac v. Kolinor Optical Enterprises & Consultants, 832 F.Supp. 585, 586 (E.D.N.Y.1993) (treating motion to dismiss as motion for summary judgment). Courts differ somewhat as to what pleading standards Reves imposes on a motion to dismiss. In Friedman v. Hartmann, Civ. No. 91-1523, 1994 WL 376058 (S.D.N.Y. July 15, 1994), the court recently declined to apply Reves. It reasoned that “it will not always be reasonable to expect that when a defrauded plaintiff frames his complaint, he will have available sufficient factual information regarding the inner workings of a RICO enterprise to determine whether an attorney was merely ‘substantially involved’ in the RICO enterprise or participated in the ‘operation or management’ of the enterprise.” Id. at *2. In other cases, however, courts have dismissed RICO claims under Reves without giving plaintiffs an opportunity to conduct discovery. See Morin v. Trupin, 835 F.Supp. 126, 133-36 (S.D.N.Y.1993) (dismissing RICO claim against attorneys where complaint merely alleged that they had drafted documents and directed other defendants as to where to sign them); Amalgamated Bank of New York v. Marsh, 823 F.Supp. 209 (S.D.N.Y.1993) (dismissing RICO claim against restaurant where complaint merely alleged that it received checks in embezzlement scheme). In Mathon v. Marine Midland Bank, 875 F.Supp. 986 (E.D.N.Y.1995), Judge Spatt of this court elected not to follow Morin in deciding whether plaintiffs had adequately pleaded the involvement of attorneys in a RICO enterprise. The court reasoned that: The above cases [Morin, Biofeedtrac, and Nolte ] lead to the conclusion that attorneys do not incur RICO liability for the traditional functions of providing legal advice and services. However, the cases do not foreclose the possibility of an attorney or law firm maintaining a[n] operational or managerial position in a RICO enterprise. Because the court must construe all allegations in favor of the plaintiff in reviewing a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), the Court determines for the purposes of this motion that the Amended Complaint sufficiently ... pleads a “RICO enterprise.” Id. at 995. The court then went on to dismiss plaintiffs’ RICO complaint on the ground that plaintiffs had not adequately alleged continuity. Relying on these precedents, the court concludes that plaintiffs have alleged a sufficient factual basis to support their contention that AIB “operated or managed” the RICO enterprise. To be sure, if AIB’s involvement were limited to its knowing receipt of improperly diverted funds,, it would be insufficient under Reves to support a RICO claim. See Marsh, 823 F.Supp. at 220. Similarly, its assistance in preparing the PPMs would not be sufficient under Morin. But plaintiffs have alleged much more than that. The Amended Complaint charges that AIB helped to initiate the scheme to syndicate Ashford Castle, a property which it owned and through which it was losing considerable money. It also alleges that AIB exerted substantial control over the other defendants as a result of the debts they owed the bank. These allegations suggest that AIB exerted increasing control over the enterprise as its financial situation became more precarious. Thus, although AIB will not be liable if it merely performed routine services for the RICO enterprise, plaintiffs are entitled to discovery to determine the extent of AIB’s role. Wilde Sapte’s involvement in the enterprise is less clearly alleged. Wilde Sapte is not alleged to have been involved in the syndication of Ashford and Dromoland Castles. Rather, the sole charges against it stem from its involvement in the distribution of AHL’s assets — a matter in which it represented AIB. Plaintiffs contend that Wilde Sapte’s role went beyond the traditional functions of providing legal services in that Gill, a Wilde Sapte partner, served as a receiver of AHL’s assets, and in so doing intentionally participated in a scheme to defraud. Pls.Mem. at 39 However, even intentional participation in a fraud will not subject a defendant to RICO liability if he is not involved in the operation or management of the enterprise. See, e.g., Biofeedtrac, 832 F.Supp. at 588-89, 592 (attorney who suborned perjury and engaged in mail and wire fraud not sufficiently involved in operation or management to sustain RICO liability). Furthermore, Gill’s service as a receiver is well within the realm of traditional legal services. See id. at 591 (attaching no weight to fact that attorney had served as board member and corporate secretary of defendant corporation because “corporate counsel customarily fill such roles without becoming a part of the operation or management of the enterprise”). Furthermore, unlike the pro se plaintiffs in Mathon, plaintiffs in this case are represented by skilled counsel. The court is therefore less inclined to read their complaint with the liberality that would be appropriate to a pro se pleading. Given the lack of any specific allegations against Wilde Sapte, the court concludes that it was not sufficiently involved in the operation or management of the enterprise to subject it to RICO liability. Count One of the complaint is therefore dismissed without prejudice as to defendant Wilde Sapte. 2. Racketeering Activities Defendants have also challenged the sufficiency of plaintiffs’ claims concerning their alleged “racketeering activities.” “Racketeering activity” is defined by § 1961(1) of the RICO statute to include violations of the mail and wire fraud statutes, 18 U.S.C. § 1341 and 18 U.S.C. § 1343, and “any offense involving fraud connected with a case under Title 11 [or] fraud in the sale of securities[.]” 18 U.S.C. § 1961(1). Because the RICO complaint alleges fraud as its predicate acts, it is governed in part by the strict pleading requirements of Rule 9(b) of the Federal Rules of Civil Procedure. Rule 9(b) provides that “[i]n all averments of fraud ... the circumstances constituting fraud ... shall be stated with particularity. Malice, intent, knowledge, and other condition of mind may be averred generally.” Fed.R.Civ.P. 9(b). Rule 9(b) is thus an exception to the general policy of the federal rules, which require plaintiffs only to set forth “a short and plain statement” of a claim sufficient to give the opposing party notice. Fed.R.Civ.P. 8. To satisfy the requirements of Rule 9 with respect to their fraud allegations, plaintiffs must, at a minimum, “(1) specify the statements that [they] contend[] were fraudulent, (2) identify the speaker, (3) state where and the statements were made, and (4) explain why the statements were fraudulent.” Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir.1993) (citing Cosmas v. Hassett, 886 F.2d 8, 11 (2d Cir.1989)). Although Rule 9 does relax its particularity requirement with respect to allegations of malice, intent and knowledge, plaintiffs must still allege facts that “give rise to a strong inference of fraudulent intent.” Shields v. Citytrust Bancorp, 25 F.3d 1124, 1128 (2d Cir.1994). The requisite “strong inference” may be established “either (a) by alleging facts to show that defendants had both motive and opportunity to commit fraud, or (b) by alleging facts that constitute strong circumstantial evidence of conscious misbehavior or recklessness.” Id. Under the “conscious behavior” approach, however, “the strength of the circumstantial allegations must be correspondingly greater.” Beck v. Manufacturers Hanover Trust, 820 F.2d 46, 50 (2d Cir.1987), cert. denied, 484 U.S. 1005, 108 S.Ct. 698, 98 L.Ed.2d 650 (1988). a. Mail and Wire Fraud To state a claim of mail fraud under 18 U.S.C. § 1341 or wire fraud under 18 U.S.C. § 1343, a complaint must allege “(1) a scheme or artifice to defraud or to obtain money by means of false pretenses, representations, or promises; (2) use of the mails [or wires] for the purpose of executing the scheme; and (3) a specific intent to defraud either by devising, participating in, or abetting the scheme.” Update Traffic Systems v. Gould, 857 F.Supp. 274, 282 (E.D.N.Y.1994) (quoting Morrow v. Black, 742 F.Supp. 1199, 1205 (E.D.N.Y.1990)); see also Powers v. British PLC, 57 F.3d 176, 184 (2d Cir.1995); In re Crazy Eddie Securities Litigation, 812 F.Supp. 338, 347 (E.D.N.Y.1993). Each of these elements is examined below in turn. i. Existence of a Scheme to Defraud The court finds that the investor plaintiffs have adequately alleged the existence of a scheme to defraud them through material misrepresentations in the Ashford and Dromoland PPMs. At its core, the complaint makes the following claims. Defendants Dowling, Nickerson and Curley, through the corporations they controlled, initially solicited investors for the Ashford Cas-tie project through several letters mailed to investors between February and May of 1985. On or about May 1, 1985, Dowling mailed copies of the Ashford PPM to potential investors. ¶70. The memorandum explicitly stated that the offer would close when the Ashford Minimum Subscription Level, which it defined as aggregate sales of $5.5 million or greater, was reached. Pl.Ex.A., at 7, 65,157. In May and June of 1985, defendants Dowling and Curley began to solicit “stand-in” investors to help them attain the minimum subscription level. Curley solicited one such stand-in, Addison Vestal, through a letter dated June 10,1985, which promised that defendants would return his investment by mid-September unless he indicated otherwise. ¶ 73; Pl.Ex.B. Defendants then closed the syndication despite the failure to reach the minimum syndication level with legitimate investors. ¶ 74. From November 20, 1985 to April 24, 1992, defendant ACI then used its operating funds to pay the obligations of the “stand-in” investors to defendant AIB. ¶ 78. Plaintiffs have provided a list of payments made on these obligations, including check numbers, amounts, and dates. In 1987, the same group of defendants began a syndication of Dromoland Castle in a manner substantially identical to that of Ash-ford Castle. Like the Ashford PPM, the Dromoland PPM stated that the closing would not occur until a minimum subscription level had been reached. ¶ 92; Pl.ExJB., at 70-71. The defendants reached this level by relying on “stand-in” investors, whose obligations to AIB were paid out of the operating revenue of DCI, which managed the castle, and by defendant Nickerson. ¶¶ 100-102. Plaintiffs also provide a list of payments from DCI to AIB, again including check numbers, amounts, and dates. PI. Ex.C. Plaintiffs have adequately alleged the existence of material misrepresentations in the Ashford and Dromoland PPMs. Both offering memoranda clearly indicate that sales equivalent to the minimum subscription level is a necessary precondition to closure. See Defs.Ex. 2 at 64 (“Unless the Minimum Subscription Level is attained by no later than one year from the date of this Memorandum, ACI shall withdraw this offering and reject all Unit Sale Agreements without liability.”); Defs.Ex. 3, at 70 (“The initial Closing of Offering shall occur on or after September 1, 1987, when the Minimum Subscription and Financing Level has been attained_”). The Amended Complaint also alleges — although in somewhat less clear fashion — that the minimum subscription levels for the Ash-ford and Dromoland Castles were not met. The Ashford PPM defined the minimum subscription level as “[tjhat number of Castle Interests the aggregate sales proceeds from the sale of which would be equal to or greater than approximately $5.5 million.” Ex.A, at 157. The Dromoland PPM defined it as “[sjubseriptions and approval of such mortgage financing arranged by DCI as Owner desires for 45 Castle Interests.” Ex.D, at 145. It then indicates that at least eight “stand-in” investors were used to meet the Ashford minimum subscription level, and another eight to meet the Dromoland minimum subscription level. ¶¶ 68(b), 94(a). As the Dowling defendants correctly note, see Dowling Rep.Mem. at 8, the amended complaint does not specifically state that the $5.5 million subscription level was never met. Nonetheless, the court finds that plaintiffs have alleged facts sufficient to support their claim that neither project met its minimum subscription level. Plaintiffs note that the Ashford minimum subscription level of $5.5 million was defined as the amount of money that would be raised by the sale of 62 units at $89,000 per unit. ¶ 66(b). Given an average price of $89,000, the sale of only 51 units would result in aggregate proceeds of only $4.539 million — nearly $10 million less than the minimum subscription level. In order to reach $5.5 million through the sale of only 51 units, the average sale price would need to be nearly $108,000, a figure significantly higher than defendants’ estimated average. Thus plaintiffs have alleged facts adequate to support the inference that the $5.5 million figure was not met. With respect to Dromoland Castle, plaintiffs have alleged only that “eight of the 45 units required to be sold to attain [the minimum subscription level] were taken by ‘stand-in’ investors!!.]” ¶ 94(a). This language is somewhat unclear. Plaintiffs do not expressly state the total number of units sold. The language of this allegation, however, permits the reasonable inference that exactly 45 units were sold, including eight “stand-ins.” Since neither the Dowling defendants, AIB, or Curley has argued that plaintiffs have failed to plead that the Dro-moland minimum subscription level was met, the court accepts this interpretation. Plaintiffs have thus clearly alleged that closing of the Ashford and Dromoland offerings was contingent upon the attainment of the minimum subscription level, and that the minimum level was only achieved through the use of “stand-in” investors. The success of their argument thus depends on whether, under the terms of the PPMs, the “stand-in” investors “count” toward reaching the minimum levels. Plaintiffs have adequately alleged that they do not. The Ashford PPM expressly states that “[investors will be required to represent that they are acquiring Castle Interests for their own account, for investment and not with a view toward resale or distribution thereof.” Pl.Ex.A at 1. The Dromoland PPM contains virtually identical language. Pl.Ex.D at 10. “Stand-in” investors, however, were not planning to retain their interests, but simply to hold them temporarily, as the letter from Curley to Vestal makes clear. Defendants have not identified any language in either memorandum that adequately warned plaintiffs that substitute investors would be allowed to buy castle interests, then discard them or transfer their obligations to others once the minimum subscription levels were ■met. The court expresses no view as to whether the other alleged misrepresentations in the Ashford and Dromoland PPMs adequately allege a scheme to defraud the investor plaintiffs. Plaintiffs have met their burden for the purposes of this motion by pleading with particularity the details of the “stand-in” scheme. ii. Use of the Mails In this ease, plaintiffs have alleged numerous uses of the mails and interstate or international wires by each of the defendants, including several letters, telephone calls, facsimile transmissions, and wired checks. In most cases they have specified the date, the sender, the recipient, and the content of the communications. To be in furtherance of a scheme, a mailing need not contain any misrepresentation, and need not be an essential part of the scheme. See Schmuck v. United States, 489 U.S. 705, 710-11, 109 S.Ct. 1443, 1448, 103 L.Ed.2d 734 (1989) (“It is sufficient for the mailing to be incident to an essential part of the scheme or a step in the plot.”) (citations and internal quotation marks omitted). Similarly, a defendant need not actually use the mails or wires so long as that defendant “causes” such use. Causation, for this purpose, merely requires an allegation to support the claim that use of the mails or wires was reasonably foreseeable, or likely to follow in the ordinary course of business. United States v. Bortnovsky, 879 F.2d 30, 36 (2d Cir.1989); see also United States v. Altman, 48 F.3d 96, 102-03 (2d Cir.1995). Defendants have not challenged the sufficiency of plaintiffs allegations regarding use of the mails. Given the liberal standard of proof required by the statute, the court concludes that plaintiffs have adequately alleged use of the mails and wires in furtherance of a scheme to defraud. iii. Intent to Defraud To satisfy Rule 9(b), allegations of fraudulent intent must “provide some minimal factual basis for conclusory allegations of scienter that give rise to a strong inference of fraudulent intent.” Powers v. British Vita, P.L.C., 57 F.3d 176, 184 (2d Cir.1995) (citations and internal quotation marks omitted). Plaintiffs may satisfy this burden in one of two ways. First, they may allege both motive for committing fraud and a clear opportunity for doing so. Id.; Beck v. Manufacturers Hanover Trust, 820 F.2d 46, 50 (2d Cir.1987), cert. denied, 484 U.S. 1005, 108 S.Ct. 698, 98 L.Ed.2d 650 (1988). Second, they may allege “circumstances indicating conscious behavior by the defendant, though the strength of the circumstantial allegations must be correspondingly greater.” Id. Applying this standard, the court finds that plaintiffs have adequately alleged fraudulent intent with respect to all remaining defendants except Davison and AHL. Dowling, Nickerson, Curley, ACI, DCI and Dowmar With respect to defendants Dowling, Nickerson, Curley and Davison and the various corporations under their control, plaintiffs easily demonstrate the requisite “strong inference” of fraudulent intent under either the “motive and opportunity” test or the “conscious behavior” test. First, as directors or officers of the various corporations involved in the Ashford and Dromoland Castle projects (ACI, DCI and Dowmar), these defendants stood to gain significant amounts of money from the syndication and operation of these castles. Moreover, each of these defendants were “well positioned to carry out the fraudulent transaction^]” in that each of them possessed the “trust and authority” necessary to effectuate fraud. Powers, 57 F.3d at 185. Second, plaintiffs have alleged numerous circumstances pointing to conscious behavior by each of these defendants, including several letters that evince their awareness of the “stand-in” scheme. Pl.Ex. B, E, G, H, I. They have also detailed numerous payments made by defendants ACI and DCI in connection with the “stand-in” scheme. Pl.Ex. C, F. Defendant Curley does not appear to contest the allegations concerning fraudulent intent. The Dowling defendants do contest the allegation of intent, but fail to offer any coherent argument as to why plaintiffs’ allegations of intent are insufficient. They argue, for example, that “there is not a single allegation as to an oral misrepresentation to any plaintiff or a showing that any of the named defendants knowingly or intentionally participated in drafting the express or implied ‘representation^]’ ” in the Ashford and Dromoland PPMs. Dowling Mem. at 38. But a showing of fraudulent intent requires neither a showing of an oral misrepresentation or a link to drafting a specific written misrepresentation. All it requires is that plaintiffs allege facts supporting the contention that each defendant knowingly or intentionally took part in a scheme to defraud through either the “motive and opportunity” test or the “conscious behavior” test. The court finds plaintiffs have met this burden with respect to Dowling, Nickerson, Curley, ACI, DCI and Dowmar. AIB The Amended Complaint clearly alleges a motive for AIB’s participation in the fraud scheme. Plaintiffs allege that AIB acquired Ashford Castle in 1980, when it restructured a mortgage agreement with the property’s then-owner, Ashford Castle Limited (ACL). Because revenue from the castle was insufficient to cover ACL’s obligations, in 1985 AIB agreed to sell its castle interest to individual investors through Dowling, Nickerson and Curley. ¶¶ 61-62. By allowing the syndication to proceed despite the fact that its promoters failed to reach their advertised “minimum subscription level,” AIB thus was able to replace a non-performing loan to ACL with loans to new investors, see ¶74, who presumably might not have bought shares in the castle had they known of the existence of “stand-in” investors. Because ACI paid the “stand-in” obligations to AIB, the scheme effectively allowed AIB to continue to withdraw funds from the operating revenue of the castle, despite the fact that it no longer owned the castle. ¶78. Although AIB never owned any interest in Dromoland Castle, the use of “stand-in” investors similarly allowed AIB effectively to withdraw funds from that project’s revenue. ¶ 102. The amended complaint also clearly alleges that AIB had the opportunity to commit fraud. As the primary lender on all of the syndication projects alleged, AIB drafted the financing sections of the offering memoranda for Ashford and Dromoland Castles, ¶¶ 66, 92, accepted payments from ACI and DCI on behalf of the “stand-in” investors, ¶¶ 78-79, 102; Pl.Ex.C, and continued to fund new projects despite knowledge of previous improprieties. Like the Dowling defendants, AIB contends that plaintiffs allegations of fraudulent intent are deficient because the complaint does not clearly link AIB to any particular misrepresentation. However, the elements of mail and wire fraud do not require such a clear misrepresentation. They merely require plaintiffs to allege facts sufficient to support a “strong inference” of AIB’s intentional participation in a scheme to defraud. Because they have adequately pleaded both motive and opportunity, the court finds that plaintiffs have satisfied this standard. Davison and AHL With respect to Davison and AHL, the complaint clearly does not allege intentional participation in the “stand-in” scheme. Indeed, neither of these defendants is alleged to have joined the enterprise until 1988, after the sale of the Ashford and Dromoland Castle interests. The relationship between AHL and the investor plaintiffs is somewhat unclear. As noted previously, the complaint does not explain the precise relationship between AHL, ACI and DCI, nor the manner in which AHL “consolidated” the management contracts for Ashford and Dromoland castles. While plaintiffs have alleged specific diversions of funds from ACI and DCI to cover the “stand-in” obligations, they have not alleged that AHL diverted any funds from Ashford or Dromoland to cover those obligations. Instead, plaintiffs appear to be contending that AHL diverted money from other projects to pay the Ashford and Dromoland “stand-in” obligations. AHL cannot therefore be said to have intentionally participated in the “stand-in” fraud itself. Nor can Davison, whose r