Antitrust Law Daily Wrap Up, RICO—S.D.N.Y.: RICO suit over alleged $250,000 college admissions consulting scam tossed, (Aug 4, 2026)

By Martin A. Steinberg, J.D.

Plaintiff failed to plead a RICO enterprise or a continuous pattern of racketeering activity.

The federal district court in New York City dismissed a putative class action accusing Qi Xin and China Summit Capital, LLC, of fraudulently marketing college-admissions consulting services to Chinese families. Plaintiff Wanglap Yam alleged that he paid $250,000 after Xin claimed that IvyMountain International, LLC, a subsidiary of China Summit, had elite admissions personnel and connections capable of helping Yam’s daughter gain admission to top U.S. colleges, but that no meaningful services were provided and a contractually required $125,000 refund was withheld. The court held that it had federal-question jurisdiction over Yam’s civil RICO claim but dismissed the claim with prejudice because the complaint failed to plausibly allege an association-in-fact enterprise or a continuous pattern of racketeering activity. Although Yam adequately alleged several predicate acts, including wire-fraud predicates involving several transfers and a purported witness-tampering threat, the court found that the alleged conduct involved only a few participants and victims and consisted largely of isolated activity rather than sustained or ongoing criminal conduct. After dismissing the RICO claim, the court declined to exercise supplemental jurisdiction over Yam’s state-law claims for consumer-protection violations, fraud, negligent misrepresentation, and breach of contract, dismissing those claims without prejudice (Yam v. Xin, No 1:23-cv-09793-KPF (S.D.N.Y. Aug. 3, 2026)).

Background. Plaintiff Wanglap Yam, a Chinese citizen residing in Hong Kong, brought a putative class action against Qi Xin, also known as Brandon Qi, and China Summit Capital, LLC, alleging that they fraudulently marketed college-admissions consulting services to Chinese families. Xin was alleged to be the sole member of China Summit Capital and to operate through IvyMountain International, LLC, which purportedly offered specialized assistance in securing admission to elite U.S. colleges.

In late 2022 and early 2023, Yam sought help for his daughter’s college applications. Through intermediary Chu Pui Lam of Bright Range Limited, Yam learned of Xin’s services. Xin allegedly represented that IvyMountain had extensive staff, admissions expertise, and connections to top U.S. universities. China Summit Capital’s website similarly claimed that IvyMountain had assembled an elite team that included admissions officers from highly ranked schools. Yam alleged that these representations were false because IvyMountain had no employees, lacked the promised expertise and connections, and was not a legitimate operating company.

On February 6, 2023, Yam entered into a contract with IvyMountain for college-application services. Bright Range signed on Yam’s behalf, while Zhiran “Marc” Cheng signed for IvyMountain. The agreement required Yam to pay $250,000 and identified seven target schools, including Harvard, Yale, Columbia, Cornell, and Princeton. If Yam’s daughter was not admitted to any of the five “reach” schools, IvyMountain was required to refund $125,000 within one business day.

Yam wired the full fee to Xin’s personal bank account after Xin allegedly explained that IvyMountain’s account was receiving too many client payments. Yam claimed this explanation was false and intended to conceal that IvyMountain was not a legitimate company. According to the complaint, defendants provided no meaningful services, Yam’s daughter was not admitted to any reach school, and defendants refused to issue the required refund.

The complaint identified Sherry Shan as another alleged victim. Xin allegedly promised “study-abroad lobby” services to help Shan’s son gain admission to Cornell. Shan transferred approximately $111,700, but no services were provided, her son was not admitted, and Xin refused a refund.

Yam also alleged that Xin made or caused anonymous threats during the litigation, including threats involving Yam’s daughter and Pui Lam’s son. Additional details were filed under seal.

Yam sought to represent a class of individuals who paid defendants for educational-consulting services and an alternative subclass of customers whose children were not admitted to specified schools and who were denied refunds. He alleged that most class members were located in China and that defendants’ records would identify them.

Procedural history. Plaintiff filed the action in November 2023, asserting civil RICO and New York consumer-protection claims, along with claims for fraud, negligent misrepresentation, breach of contract, and unjust enrichment. Defendants answered and asserted counterclaims for defamation and for harassment and insults, then moved to strike the class allegations and dismiss the complaint. Plaintiff, in turn, moved to dismiss the counterclaims.

In January 2025, the court dismissed the civil RICO, fraud, and negligent-misrepresentation claims with leave to amend. It dismissed the unjust-enrichment claim and the rescission component of the contract claim with prejudice, but allowed the New York General Business Law § 349 claim and the remainder of the contract claim to proceed. The court denied the motion to strike the class allegations without prejudice to renewal at the class-certification stage. It also dismissed defendants’ harassment counterclaim with prejudice and their defamation counterclaim with leave to amend.

After the court addressed separate issues involving anonymous threats and denied both sides’ sanctions requests, plaintiff filed a First Amended Complaint in March 2025. Defendants answered and reasserted a counterclaim, and plaintiff answered that counterclaim.

In July 2025, plaintiff requested a conference concerning defendants’ responses to document requests that had been served before discovery was stayed. Defendants responded by seeking dismissal for lack of subject-matter jurisdiction. At an August 2025 conference, the court set a briefing schedule for defendants’ anticipated motion and permitted plaintiff to amend again.

Plaintiff filed the Second Amended Complaint in September 2025. Defendants then submitted a series of procedurally confused filings, including separate dismissal motions and an answer, prompting the court to deny the motions without prejudice and require clarification. Defendants ultimately filed the motion to dismiss addressed in the opinion.

Rule 12(b)(1). The court rejected defendants’ jurisdictional challenge, holding that plaintiff’s civil RICO claim supplied federal-question jurisdiction even though it ultimately failed on the merits. The claim was not so frivolous or insubstantial as to deprive the court of authority to hear it, and the court therefore also had discretion to consider the related state-law claims.

Neither diversity jurisdiction nor the Class Action Fairness Act provided an alternative basis. Complete diversity was lacking because foreign citizens appeared on both sides of the case. CAFA did not apply because the plaintiff failed to plausibly allege minimal diversity, a class of at least 100 members, or more than $5 million in controversy. The court therefore denied dismissal under Rule 12(b)(1).

Rule 12(b)(6). The court dismissed the civil RICO claim with prejudice because plaintiff failed to plead an enterprise or a continuous pattern of racketeering activity. The court found that plaintiff adequately alleged a common fraudulent purpose but failed to plead sufficient relationships among the alleged participants. Plaintiff alleged an association-in-fact enterprise consisting of Xin, China Summit Capital, Marc Cheng, Bright Range Limited, and Chu Pui Lam. He claimed that the group’s purpose was to induce victims to pay large sums for nonexistent or misrepresented college-admissions services.

Pui Lam and Bright Range acted as plaintiff’s own intermediaries, and the complaint did not plausibly allege that they knowingly participated in the fraud or functioned as recruited members of Xin’s enterprise. As for Cheng, the complaint alleged that he signed Yam’s contract on IvyMountain’s behalf, held himself out as an IvyMountain official, and later directed plaintiff’s counsel to pursue claims against him rather than others. The court found that these allegations showed only limited involvement in Yam’s transaction and did not establish that Cheng served as a broader “signatory” or “enforcer” within a structured organization whose members functioned as a continuing unit.

The complaint also failed to adequately allege longevity. Although it identified events occurring from early 2023 through alleged threats in 2025, it did not clearly describe how long the purported enterprise operated, how defendants continued to market the services, or whether others were harmed before or after plaintiff and Sherry Shan. Because plaintiff failed to plead an association-in-fact enterprise, the RICO claim was deficient on that ground alone.

Predicate acts of racketeering. The court nevertheless considered whether plaintiff adequately alleged predicate acts. Plaintiff relied primarily on wire fraud and several alleged threats. Because wire-fraud allegations are subject to Rule 9(b), plaintiff was required to identify the fraudulent statements with particularity, including their content, speaker, timing, and circumstances. The court found that only Xin’s January 19, 2023, communications with Shan were pleaded with sufficient specificity among the alleged fraudulent communications.

The court also found that plaintiff adequately alleged three wire transfers made in furtherance of the alleged scheme: Yam’s $250,000 transfer to Xin on February 6, 2023, and Shan’s transfers of RMB 60,000 and RMB 695,000 on January 23 and January 31, 2023. Those transfers, together with the complaint’s description of the alleged fraudulent scheme, could constitute predicate acts.

Alleged threats and witness tampering. Plaintiff also alleged that Xin made anonymous threats against Yam, Yam’s daughter, Pui Lam, and Pui Lam’s son. The court held that threats under 18 U.S.C. § 875 are not RICO predicates and that the Hobbs Act did not apply because the alleged threats were not plausibly connected to robbery, extortion, or interference with commerce. The alleged August 2025 threat against Pui Lam’s son, however, could plausibly constitute witness tampering under 18 U.S.C. § 1512 because it may have been intended to influence or prevent her testimony. Taken together with the adequately alleged wire transfers and communications, the court concluded that plaintiff had pleaded at least two predicate acts.

Failure to plead closed-ended continuity. Despite alleging predicate acts, plaintiff failed to show a closed-ended pattern of racketeering activity. Although the alleged acts spanned more than two years, nearly all of the wire-fraud activity occurred during a brief period in January and February 2023. The only later act was the alleged witness-tampering threat.

Considering the number of participants, victims, schemes, and acts, the court found that the complaint described sporadic activity rather than sustained criminal conduct. The allegations involved only a few participants, two identified victims, and a limited objective. The dispute therefore more closely resembled ordinary contract and tort claims than the long-term criminal conduct targeted by RICO.

Failure to plead open-ended continuity. Plaintiff also failed to establish a threat of future criminal activity. He did not plausibly allege that the purported enterprise was primarily unlawful or that fraud was defendants’ regular method of conducting an otherwise legitimate business. Although plaintiff asserted that the scheme continued and referred generally to other potential victims, he identified only Shan as having a similar experience. The allegation that defendants continued operating an educational-consulting business did not, without more, show that criminal activity would continue. The court therefore found no open-ended continuity.

State law claims. Although the court retained discretion to exercise supplemental jurisdiction after dismissing the sole federal claim, it declined to do so because Second Circuit precedent generally disfavors retaining state-law claims in that circumstance. The court therefore dismissed those claims without prejudice to refiling in state court.

The Case is No. 1:23-cv-09793-KPF.

Judge: Failla, K.

Attorneys: Mark Hammervold (Hammervold PLC) for Wanglap Yam. Sang Young Han (YK Law LLP) for Qi Xin.

Cases: RICO NewYorkNews