The legal definition for mail/wire fraud is that the intent has to be to obtain money or property... in other words, if you send a letter to a friend that contained a lie, you wouldn’t be charged for fraud unless you we’re trying to use that lie to obtain money or property - which in the case of this scam they did neither. They lied to gain admission - to pay money, the Isaacksons were not seeking any financial benefit.
Racketeering is when an organized business is dealing with illegal or fraudulent activity. The families involved were not part of the business - they were simply customers.
@Supermodel56 - this is completely wrong. The Isaacksons weren't charged with mail fraud. They were charged with conspiracy to commit mail fraud. The government just needs to show that couple agreed to the conspiracy and committed an act in furtherance of the conspiracy. And honest services fraud is part of the mail fraud statute - it specifically covers intangible property rights. To quote you, " I don't think you know how the law works."