Mauricio Umansky, the Los Angeles-based founder of the luxury brokerage The Agency who gained celebrity status from his appearances on the reality television shows “Real Housewives of Beverly Hills” and “Buying Beverly Hills,” is the subject of a new lawsuit where he is accused of fraudulently obtaining $3.5 million from pandemic relief loans.
According to a report from Us Weekly, Relator LLC filed a lawsuit that claimed Umansky – who is also the co-founder of the start-up American Real Estate Association – and his company applied for and received two Payroll Protection Program (PPP) and CARES Act loans in the total amount of $3,521,153.00 during the Covid-19 pandemic. The lawsuit accused The Agency of “falsely” certifying the loans were needed to pay employees, adding that the money The Agency “applied for and received exceeded the loan limit of 2.5 monthly salary with a cap of $100,000 annual salary per employee.”
The PPP provided loans to businesses that were unable to pay workers due to the pandemic’s impact on their operations. Relator LLC’s lawsuit stated The Agency would have been minimally impacted by the pandemic shutdown it generated revenue in deals “typically between millionaires and billionaires.” The filing added that The Agency’s business “grew massively” during the pandemic by earning $6.5 billion in 2020 and $11.2 billion in 2021.
The lawsuit is requesting that Umansky and The Agency pay equal to three times the amount of damages caused.
“With this knowledge, Defendants would have retained significant reserves to continue to pay their employees,” the lawsuit said. “To do otherwise would have been grossly irresponsible, especially for experts in the real estate markets. As alleged above, Defendants expressly did not hold themselves out as grossly irresponsible and their experience and success confirms they were not.”
A representative for The Agency responded to the lawsuit with a statement that read, “While we are unable to comment on ongoing litigation, we want to emphasize that The Agency has always operated with the highest level of integrity in all aspects of our business. Like many companies, we faced significant challenges during the Covid-19 pandemic, including layoffs and cutbacks. Our focus has always been, and especially during that challenging period, on delivering exceptional service to our customers and supporting our employees. The claims in this case do not reflect the reality of our operations and financial situation at the time we filed for our PPP loans, and we intend to vigorously defend against these meritless claims.”
Photo courtesy of Netflix
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And to think that all the rest of the hardworking and honest agents/brokers like myself strive to stand by our fiduciary duties to our clients with obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care. Now, there is a real class act and just another dark mark on an industry that continues to be dragged by its heels through the mire.
Guess he didn’t read the NAR Code of Ethics
I would like to see AREA’s code of ethics!