Chow et al v. Zimny et al

Filing 1

COMPLAINT against All Plaintiffs Filing fee: $ 350, receipt number 0101-2852961 (Fee Status: Filing Fee paid), filed by Gerald Chow. (Attachments: # 1 Civil Cover Sheet, # 2 Category Sheet)(Clancy, Kevin)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

__________________________________________
)
GERALD CHOW and LILY CHOW,
)
)
Plaintiffs,
)
)
v.
)
)
MARK J. ZIMNY and IVYADMIT
)
CONSULTING ASSOCIATES LLC,
)
)
Defendants.
)
__________________________________________)

Civil Action No. ____________

COMPLAINT
Plaintiffs Gerald Chow (“Mr. Chow”) and Lily Chow (“Mrs. Chow”), citizens of Hong
Kong, bring this action against defendants Mark J. Zimny (“Zimny”) and his company, IvyAdmit
Consulting Associates LLC (“IvyAdmit”), to recover from defendants over two million dollars
that the defendants obtained from Mr. and Mrs. Chow through fraudulent means under the guise
of acting as educational consultants to and caretakers for the Chows’ minor children while they
attended private schools in the United States.

Plaintiffs assert claims for fraud, breach of

fiduciary duty, breach of contract, promissory estoppel, conversion, unjust enrichment, an
accounting and imposition of a constructive trust.
Parties
1.

Plaintiff Gerald Chow is a Chinese citizen who resides in Hong Kong. He is the

husband of plaintiff Lily Chow and is the father of First Son and Second Son.
2.

Plaintiff Lily Chow is a Chinese citizen who resides principally in Hong Kong.

She is the wife of Gerald Chow and is the mother of First Son and Second Son.

3.

Defendant Mark J. Zimny is, upon information and belief, a citizen of

Massachusetts who resides at either 7 Florence Street or 14 Watson Street, Cambridge,
Massachusetts, and is a member and the founder of IvyAdmit Consulting Associates LLC.
4.

Defendant IvyAdmit Consulting Associates LLC is a Connecticut limited liability

company with an office in Cambridge, Massachusetts. IvyAdmit purports to be an educational
consulting company. IvyAdmit transacts business in Massachusetts.
Jurisdiction and Venue
5.

This Court has subject matter jurisdiction over this case pursuant to 28 U.S.C. §

1332, as the plaintiffs are citizens of a foreign state and the amount in controversy exceeds
$75,000 exclusive of interest and costs.
6.

Venue in this District is proper pursuant to 28 U.S.C. § 1391, in that the

defendants or their agents, or certain of them, reside or may be found here, a substantial part of
the events giving rise to plaintiffs’ claims occurred here, and the defendants transact business
here.
Facts
7.

Gerald and Lily Chow have sought the best educational opportunities for their

children. They decided in 2006 that their sons, First Son and Second Son, would benefit most by
being educated in the top schools in the United States. Having no knowledge of the educational
system in the United States, they engaged an educational consultant to assist the m with the
selection of appropriate middle schools in the United States and the admission process.
8.

During the 2006-07 school year, First Son, then age 15, was a ninth grade student

and boarded at Eaglebrook School in Deerfield, Massachusetts.

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9.

In June 2007, First Son graduated from Eaglebrook. At his graduation ceremony,

Zimny approached Gerald Chow and introduced himself, stating that he was a professor at
Harvard University and that he was at the graduation ceremony for one of First Son’s classmates,
a student from Korea and a relative of his Korean wife, Inny. Upon information and belief,
Zimny’s statement that he was a professor at Harvard University was false. Zimny was very
friendly and told the Chows that he helped his relative, the Korean student, gain admission to
Philips Andover, his “dream school.” When he learned that the Chows lived in Hong Kong and
had one son, First Son, in school in the States and another son, Second Son, planning to come to
the United States for school, he informed them that he was planning to be in Hong Kong during
the summer and that he would call on them while he was there.
10.

During the summer of 2007, Zimny and the woman he had referred to as his wife

met with Gerald and Lily Chow in Hong Kong and explained to them that he was an educational
counselor. At that time, he offered his services to assist their children with their education in the
United States. Zimny told the Chows that he owned a company called IvyAdmit through which
he provided educational consulting services to Korean nationals who wished to have their
children educated in the United States. He said he had high level connections with individuals in
the development offices of New England boarding schools and Ivy League colleges and that if
they engaged him as their educational consultant, he could use his school connections to assist
them in gaining admission for First Son and Second Son to the top tier schools.
11.

Zimny subsequently introduced the Chows in Boston to two Harvard professors

whom he claimed were his partners, Professor Vivien Louie of the Harvard School of Education
and Professor Gu-Yeon Wei of the Harvard School of Engineering and Applied Science. He

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subsequently provided the Chows with a formal written “Plan” that described the services which
IvyAdmit could provide for First Son and describing the benefits of engaging IvyAdmit.
12.

In the Plan he prepared for First Son and presented to the Chows in the summer of

2007, Zimny claimed that Mr. and Mrs. Chow could benefit by contributions (“development
process”) made to schools which the boys wanted to attend, but only if those development funds
were contributed through his Group, IvyAdmit. The Plan states in pertinent part:
While the public appearance of any quid pro quo situation would be steadfastly denied by
any University development official, the reality is that of course everything has a price.
This begs the question, how do foreign families or corporations with distinct educational
goals develop a productive and positive relationship with Universities through the
process of development? The answer is simple: through intermediaries such as
EDGE/IVY Group and the internal and long standing relationships these organizations
have established within the embedded social networks of Universities like Harvard, Yale
and Princeton.
The Plan went on to state that “the EDGE/IVY Group insiders are professionals who are well
seasoned in the dynamics of how to create a mutually beneficial and reciprocal relationship
through the development process.” Upon information and belief, these statements were false and
intended by Zimny to encourage Mr. and Mrs. Chow to provide him with significant funds that
they believed would be used for the claimed purpose of making contributions to the deve lopment
funds of certain schools.
13.

Zimny also stated in the Plan that the top institutions were “very selective about

where and from whom they will accept capital contributions,” and that “none of the Tier 1
universities . . . will accept capital contributions from individuals or organizations that are
unknown or untested to them . . . .” Zimny claimed that his organization had the expertise to
utilize development and gifting effectively at U. S. boarding schools “in preparation for larger
efforts at the University level.” Upon information and belief, these statements were false.

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14.

In the Plan, Zimny claimed that because of “embedded racism,” there is resistance

among the schools from becoming “too friendly with Asian donors,” and that there is “an
unwritten presumption that donations are expected from full-pay foreign students.” The Plan
goes on to state that:
Many of the foreign students are shunned, made fun of and treated as “second class”
citizens at U.S. boarding schools due to their cultural differences, eating habits or other
forces that make them ‘different’. . . . They are viewed by many of the teachers and
school officials as a ‘necessary evil’, e.g. students and families that are necessary for the
health of the school because of their ability to contribute financially, but not welcomed to
have a real ‘seat at the table’. . . .”
Upon information and belief, these statements were false, and were intended by Zimny to induce
Mr. and Mrs. Chow to engage him to protect and guide their sons while attending schools in the
States.
15.

Zimny proposed that, for $4,000 a month for each child, excluding tuition fees,

boarding expenses for First Son, home stay expenses for Second Son and other development
expenses that would be allotted to individual boarding schools to which the boys were applying,
he/IvyAdmit would provide not only educational consulting services, but
- He would m
aintain regular communication with First Son and Second Son and be
available to them 24 hours a day;
- He would provide them with access for support and tutoring to professors and graduates
from the top universities who were working for IvyAdmit;
- He would meet with teachers, attend school functions and interact with guidance
counselors to ensure that First Son and Second Son received diligent attention from their
boarding schools and an appropriate strategy ultimately for gaining admission to the top
universities;
- He would assist with living and other arrangements in the States and overseas for their
summer education and activities; and
- He would develop and encourage an educational plan to assist First Son and Second
Son in maximizing their academic performance.

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He also represented that, through IvyAdmit, which was well known and well regarded by
boarding schools and universities, he would be able to make development contributions to
various schools in an appropriate manner which would likely assist in the admissions process.
16.

The services Zimny promised, although expensive, were very attractive to Mr.

and Mrs. Chow, as their young sons would spend much of each year in the United States, with
which the Chows were very unfamiliar and where they had no connections, and Zimny, a person
they had come to trust, promised to watch over the ir sons to ensure not only their educational
success but also their safety and assimilation in the United States.
17.

Accordingly, in return for the services that Zimny promised, in the summer of

2007, Mr. and Mrs. Chow commenced making payments of $4,000 a month for First Son and
$4,000 a month for Second Son to IvyAdmit by wire transfer. Zimny represented to them that
IvyAdmit would directly pay the school tuition bills, tutoring fees and living expenses for their
sons and would then bill the m for reimbursement of the amounts he advanced. Mr. and Mrs.
Chow agreed to this arrangement.
18.

Mr. and Mrs. Chow viewed Zimny as a trusted guardian for their sons while they

were at school in the United States, and they placed their complete trust and confidence in him.
19.

During the 2007-2008 school year, First Son, then age 16, boarded as a tenth

grade student at Brooks School in North Andover, Massachusetts. The following school year, he
was accepted at and attended the Buckingham Browne & Nichols School (“BB&N”) in
Cambridge, Massachusetts, to repeat his sophomore year. Second Son, then age 14, came to the
United States in the summer of 2007 and enrolled as a day student in the eighth grade at Beaver
Country Day School in Lexington, Massachusetts, residing in the home of the mothe r of one of

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his tutors, which was arranged by Zimny. Second Son applied to and was accepted at Loomis
Chaffee for the 2008-2009 school year as a ninth grade boarder.
20.

During the 2007-2008 school year, Mr. and Mrs. Chow discussed with Zimny the

future educational plans for their sons. Zimny repeatedly told the m that the most selective
boarding schools and private colleges in the United States were heavily focused on development:
the strategic and systematic raising of money for programs, facilities, endowments and capital
projects. He stated that the focus by these schools on development would create opportunities
for their sons.
21.

In early 2008, Zimny requested that the Chows provide funds to him to be used

as contributions to the development funds at schools to which the ir sons would be applying for
admission in the fall. He specifically requested that the Chows wire $75,000 to IvyAdmit in
January 2008 and $80,000 in March 2008 for the stated purpose of his making contributions on
their behalf.
22.

In reliance on Zimny’s claim that all development funds had to be contributed

through him and his company, the Chows wired $75,000 on January 24, 2008 and $80,000 on
March 12, 2008 in response to Zimny’s request. Zimny did not specifically identify to which
schools he intended to make the contributions on their behalf.
23.

Upon information and belief, when Zimny requested the development funds from

the Chows, he did not intend to contribute those funds to schools on their behalf, but rather he
intended to and did convert those funds for his own use, without the Chows’ knowledge.
24.

In the summer of 2008, Zimny recommended to Mr. and Mrs. Chow that rather

than paying him $4,000 a month for each child for his consulting services, they instead deposit
with IvyAdmit a $1,000,000 retainer for First Son and a $1,000,000 retainer for Second Son.

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Zimny represented that this $2 million retainer would be part of a big pool of money contributed
by similar Asian, mainly Korean, families. He stated that the purpose of this pool of money was
to help their sons and daughters to gain admission to colleges of their choice in the United States.
Upon information and belief, these representations were false.
25.

In the summer of 2008, Zimny also told Mr. and Mrs. Chow that he had

significant expertise and success as an investor, he had enjoyed very significant investment
returns and he would invest the $2,000,000 retainer and use the investment returns to pay the
monthly consulting fees and the tutoring expenses for First Son and Second Son and make
development contributions for them as appropriate. He represented that when First Son and
Second Son got into the colleges of their choice, he would repay the entire $1 million retainer
paid for each child, together with any unspent investment gains and interest. Tuition payments
were not to be paid from the retainers; rather, IvyAdmit was to continue to make tuition
payments directly and bill Mr. and Mrs. Chow for reimbursement.
26.

Still trusting Zimny and believing that he was acting in good faith and in

furtherance of their best interests and the interests of their children, Mr. and Mrs. Chow agreed to
Zimny’s proposal. They wired IvyAdmit the $2 million over a period of several months in late
2008 and early 2009. Zimny never disclosed to the m how or where he was investing their
money.
27.

Upon information and belief, when Zimny requested that Mr. and Mrs. Chow

provide him with $2 million as a retainer, he did not intend to invest those funds for their benefit,
but instead, without the Chows’ knowledge, intended to and did fraudulently convert those funds
for his own use.

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28. Zimny recommended that First Son and Second Son attend an SAT preparatory
course in Korea in the summers of 2008 and 2009, which they did. Zimny said that the 2008
summer expenses of tuition, boarding and supervision fees were included in the $2 million
retainer fees. However, for the boys’ 2009 summer expenses in Korea, Zimny stated that he
would pay the tuition, room and board expenses directly and bill Mr. and Mrs. Chow for
reimbursement. After payment, the Chows discovered that Zimny had charged them almost
three times the actual tuition cost.
29.

During the summer of 2009, the relationship between Mr. and Mrs. Chow and

Zimny began to deteriorate. Zimny insisted that all emails between their sons’ schools and the
Chows go through Zimny’s personal email account.

He told them that this was necessary

because “he was responsible” for the children while they were attending those elite schools in the
United States. Between June and early September 2009, Mr. and Mrs. Chow were unable to gain
access to the email account. When access was finally restored, Mr. Chow learned that emails
from both schools were missing during that period were missing from the email account.
30.

Shortly thereafter, Mr. Chow spoke to the headmaster at Loomis Chaffee where

Second Son was a student. Mr. Chow asked the headmaster about a development contribution
that Zimny had told him he had made on their behalf to the school. The headmaster responded
that no such contribution had been received. When Mr. Chow mentioned to the headmaster that
Zimny had represented that he was authorized by Loomis Chaffee to recruit students for the
school, the headmaster denied any such authorization or affiliation with Zimny.
31.

In the fall of 2009, Zimny represented that a Korean person who had previously

invested in his “closed fund ” had backed out and that this created an “opportunity” for Mr. Chow
to invest another $1 million in Zimny’s closed fund. Mr. Chow declined the offer.

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32.

Thereafter, Zimny presented another request to Mr. Chow. In the fall of 2009,

Zimny requested that Mr. Chow provide him with another $1 million for a development
contributio n to Stanford University. When Mr. Chow stated that he wanted to make the
contribution in memory of his deceased mother, Zimny refused, stating that the $1 million
contribution had to be made through him. As a result, Mr. Chow did not make the contributio n.
33.

In the fall of 2009, as a result of the foregoing as well as other issues that arose

with Zimny, the relationship with Zimny completely broke down. Mr. and Mrs. Chow lost all
trust in Zimny. Upon information and belief, Zimny, knowing that he wo uld not be able to trick
the Chows into providing any more funds to him, ceased providing any services to First Son and
Second Son and all communications ceased.
34.

On February 17, 2010, Mr. Chow wrote Zimny formally terminating their

relationship and requesting the immediate return of the $2 million in retainers. He also requested
that Zimny either identify the schools to which he made the contributions of $75,000 and
$80,000 from the funds he had wired to him on January 24 and March 12, 2008, respectively, or,
if the contributions had not been made, return the money.
35.

On February 25, 2010, Zimny responded that he would not return the $2 million

and he failed to provide any information concerning the $75,000 and $80,000 amounts which the
Chows h wired to him in January and March 2008. In his lengthy email response, Zimny
ad
made a number of false accusations of wrongdoing against Gerald Chow and Lily Chow and
made disparaging remarks against First Son and Second Son. Upon information and belief, the
email was a threat by Zimny that he would make such false accusations and embarrass Gerald
and Lily Chow and their children if they brought legal action to obtain a return of their funds.

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COUNT I
(Fraud)
36.

Plaintiffs reallege and incorporate herein by reference the allegations contained in

paragraphs 1 through 35 above.
37.

Zimny, and through him IvyAdmit, made false statements and misrepresentations

to Gerald and Lily Chow, as set forth above, concerning his intention to use the $2 million
retainers for the benefit of their sons and to make development contributions to schools on their
behalf.
38.

Plantiffs reasonably relied to their detriment upon Zimny’s false statements and

misrepresentations. As the intended, direct and proximate result thereof, they were harmed, and
continue to suffer harm, for which Zimny and IvyAdmit are liable.
39.

Plaintiffs have been damaged by defendants’ fraudulent representations and

conduct in an amount in excess of $2,155,000, to be determined at trial.
COUNT II
(Breach of Fiduciary Duty)
40.

Plaintiffs reallege and incorporate herein by reference the allegations contained in

paragraphs 1 through 39 above.
41.

Gerald and Lily Chow reposed their trust and confidence in Zimny and IvyAdmit

and entrusted them with $2 million of their money based upon Zimny’s representations that he
had expertise, would invest the ir money, would use the investment returns for the educational
needs of their children, and would return the principal to them upon conclusion of his services.
Further, Gerald and Lily Chow entrusted defendants with $155,000 for the specific purpose of
making development contributions on their behalf.

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42.

Zimny and IvyAdmit were aware that Gerald and Lily Chow were reposing their

trust and confidence in them and were relying on them with respect to the investment, use and
return of their funds.
43.

Zimny and IvyAdmit owed Gerald and Lily Chow a fiduciary duty by virtue of

the trust and reliance that they placed in them and Zimny’s knowledge and acceptance of such
trust and reliance.
44.

Zimny and IvyAdmit breached the fiduciary duty they owed to plaintiffs by

failing and refusing to return the money entrusted to them and, upon information and belief,
converting that money to their own use.
45.

Plaintiffs have been damaged by Zimny’s and IvyAdmit’s breach of the fiduciary

duty they owed to them in an amount in excess of $2,155,000, to be determined at trial.
COUNT III
(Breach of Contract)
46.

Plaintiffs reallege and incorporate herein by reference the allegations contained in

paragraphs 1 through 45 above.
47.

Gerald and Lily Chow entered into an agreement with Zimny and IvyAdmit

pursuant to which they agreed to entrust $2 million to them and Zimny and IvyAdmit agreed to
invest those funds and use the investment returns to pay Zimny’s and IvyAdmit’s educational
consulting fees and tutoring expenses for First Son and Second Son, and make development
contributions to schools on their behalf. Defendants further agreed to return the principal and
any remaining investment returns and interest to the Chows when their services were completed.
In addition, Gerald and Lily Chow agreed to and did provide $155,000 in funds to Zimny and
IvyAdmit for the purpose of using those funds to make development funds to certain schools.

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48.

Zimny and IvyAdmit breached the agreement with plaintiffs by failing to use the

funds provided in accordance with their agreement, failing to return the funds, and instead
converting the funds to their own use.
49.

Plaintiffs have been damaged as a consequence of Zimny’s and IvyAdmit’s

breach of contract in an amount in excess of $2,155,000, to be determined at trial.
COUNT IV
(Promissory Estoppel)
50.

Plaintiffs reallege and incorporate herein by reference the allegations contained in

paragraphs 1 through 49 above.
51.

Zimny and IvyAdmit induced Gerald and Lily Chow to deposit $2 million dollars

with them based upon Zimny’s representation that they would invest the proceeds, use the
investment returns to pay Zimny’s a IvyAdmit’s educational consulting fees and tutoring
nd
expenses for the Chows’ children, make development contributions to schools on their behalf
and return the principal and remaining investment returns to the Chows when their services were
completed. Further, Zimny and IvyAdmit induced the Chows to provide $155,000 to them based
upon Zimny’s representation that the funds would be used to make development contributions to
schools for the benefit of the Chows’ children.
52.

In providing the foregoing funds to Zimny and IvyAdmit, the Chows reasonably

relied upon Zimny’s promises to their significant detriment.
53.

As a consequence of their reasonable reliance on Zimny’s and IvyAdmit’s

promises, the Chows have been damaged in an amount in excess of $2,155,000, to be determined
at trial.

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COUNT V
(Conversion)
54.

Plaintiffs reallege and incorporate herein by reference the allegations contained in

paragraphs 1 through 53 above.
55.

Zimny and IvyAdmit, without right or permission from Gerald and Lily Chow,

improperly exercised control over and converted for their own use the funds that the Chows
entrusted to them for specific purposes.
56.

The Chows are entitled to the immediate return of these funds.
COUNT VI
(Unjust Enrichment )

57.

The Chows reallege and incorporate herein by reference the allegations contained

in paragraphs 1 through 56 above.
58.

Zimny and IvyAdmit have been unjustly enriched by the amounts that Gerald and

Lily Chow provided to them which Zimny and IvyAdmit have refused and failed to return.
59.

Defendants in equity and good conscience should pay to plaintiffs as a result of

defendants’ unjust enrichment an amount in excess of $2,155,000, to be determined at trial.
COUNT VII
(For An Accounting)
60.

Plaintiffs reallege and incorporate herein by reference the allegations contained in

paragraphs 1 through 59 above.
61.

Defendants failed to use the proceeds provided to them by plaintiffs for their

intended purposes, and overcharged plaintiffs for reimbursements for certain tuition payments.
Defendants have failed and refused to account to plaintiffs for the use of the funds transmitted to
them by plaintiffs.

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62.

Plaintiffs demand and are entitled to a full accounting from defendants identifying

how and where the $2,155,000 in funds provided to them were invested and or spent or
contributed, as well as an accounting of the actual cost of all items for which defendants sought
and obtained reimbursement from plaintiffs.
COUNT VIII
(Constructive Trust)
63.

Plaintiffs reallege and incorporate herein by reference the allegations contained in

paragraphs 1 through 62 above.
64.

Gerald and Lily Chow reposed their trust and confidence in Zimny and IvyAdmit

and entrusted them with $2 million of their money based upon Zimny’s false representations that
he had expertise, would invest their money, would use the investment returns for the educational
needs of their children, and would return the principal to them upon conclusion of his services.
Further, Gerald and Lily Chow entrusted the defendants with $155,000 based upon Zimny’s false
representation that the funds would be used to make development contributions on their behalf.
65.

Zimny and IvyAdmit obtained the foregoing funds from Gerald and Lily Chow

fraudulently, and once they obtained the funds they converted them to their own use in breach of
the fiduciary duty that they owed to Gerald and Lily Chow.
66.

A constructive trust for the benefit of Gerald and Lily Chow should be imposed

on Zimny and IvyAdmit with regard to the $2 million and $155,000 of funds entrusted to them
by Gerald and Lily Chow, in order to prevent unjust enrichment.

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PRAYERS FOR RELIEF
WHEREFORE, plaintiffs Gerald and Lily Chow pray that this Court:
1.

Enter judgment in their favor and against the defendants on all Counts of the
Complaint;

2.

Award plaintiffs all damages they sustained as a result of defendants’ conduct
pursuant to Counts I - VI, including without limitation an amount equal to the
$2,155,000 plaintiffs provided to defendants;

3.

Enter an Order requiring the defendants to provide an accounting pursuant to
Count VII;

4.

Order that $2,155,000 provided by plaintiffs to defendants be held in a
constructive trust pursuant to Count VIII pending return to plaintiffs;

5.

Award plaintiffs their attorneys’ fees, costs and pre-and post-judgment interest;
and

6.

Grant such further relief as this Court deems just and proper.
GERALD CHOW and LILY CHOW,
By their attorneys,

__”/s/” Marjorie Sommer Cooke______________
Marjorie Sommer Cooke (BBO # 097800)
[e-mail]
Kevin W. Clancy (BBO # 552590)
kclancy@ccg- law.com
COOKE CLANCY & GRUENTHAL LLP
265 Franklin Street
Boston, MA 02110
[phone]
[phone] (fax)
Dated: April 5, 2010

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