Reported / Citable
Background
Pro se plaintiff Zak Shaik sued Imperium AI and its principal, Shazir Mucklai, over a May 2025 public-relations-services transaction. Shaik alleged that an unsolicited email offered a “$500 Guaranteed PR Special” with promised media placements; after paying $500 by phone, he made additional payments following alleged upselling. He claimed the defendants did not perform, threatened him when he sought a refund, and failed to refund his money.
Shaik asserted civil RICO and 42 U.S.C. § 1981 claims, as well as Texas-law claims for breach of contract, fraud/fraudulent inducement, unjust enrichment, and intentional infliction of emotional distress. The defendants moved to dismiss the federal claims under Rule 12(b)(6) and asked the court to decline supplemental jurisdiction over the state-law claims.
The Court’s Holding
Magistrate Judge Jeffrey L. Cureton recommended granting the motion to dismiss the RICO claim with prejudice. The allegations described a failed business transaction, not the long-term criminal conduct RICO addresses. Shaik also failed to plead wire fraud with the particularity required by Rule 9(b), including what communications were fraudulent and facts supporting an intent to defraud, and did not allege an interstate connection for the purported wire-fraud or extortion predicates.
The magistrate judge also recommended dismissing the § 1981 claim with prejudice. Although the alleged racial slurs were reprehensible, the complaint did not plead nonconclusory facts supporting an inference that the defendants intentionally interfered with Shaik’s contract rights because of race. With the only federal claims recommended for dismissal, the magistrate judge recommended declining supplemental jurisdiction and dismissing the state-law claims without prejudice. The recommendation concluded that further amendment would be futile because Shaik had already amended his complaint.
Key Takeaways
- A failed service contract and alleged nonperformance do not, without more, state a civil RICO claim.
- RICO predicates based on wire fraud must satisfy Rule 9(b) and must allege interstate wire use.
- Racial insults alone do not establish a § 1981 claim absent plausible facts tying race to interference with contract rights.
Why It Matters
The recommendation underscores the limits on using federal RICO and civil-rights statutes to federalize a dispute over a business transaction. Pleading labels such as “enterprise,” “pattern,” and “continuity” cannot replace particularized facts establishing predicate racketeering acts and a plausible discrimination-based contractual injury.
Because this was a magistrate judge’s findings, conclusions, and recommendation, the parties had until July 24, 2026, to file objections before the district judge’s review.