jQuery closest class selector

closest travels up the dom tree. it won't find something thats a sibling. you can use a find on a parent to achieve this

$('.Level2').click(function(){
       $(this).parent().find('.Level3').fadeToggle();
    });

jQuery's .closest() method doesn't select sibling selectors, but parents. Looks like you're looking for the .siblings() method.

$('.Level2').click(function(){
   $(this).siblings('.Level3').fadeToggle();
});

Try .next() instead of .closest() that traverses through the ancestors of the DOM element.

Working Demo

Also you should use $(this) rather than $('.Level2') else it'll select ALL the .Level2 rather than the clicked one.

You can also go for something like this - $(this).closest('.wrap').find('.Level3').fadeToggle();.