Keller Williams Execs Hit With Another Racketeering Suit
John Davis, the former president and CEO of Keller Williams, is going after his old firm again, suing the real estate brokerage for conspiracy to defraud him and others.
The suit alleges Chairman Gary Keller, former President Josh Team and the firm’s affiliated MAPS Coaching company engaged in racketeering and conspiracy to defraud top executives, including Davis.
Davis claims that Keller Williams perpetuates a “why buy what you can steal” culture, promoted by Keller and other top executives, according to a release detailing the allegations.
One email cited in the suit quotes a message from Keller himself: “Because we’re private, we’re not under a microscope," Keller says in the email cited in the suit. "We can do what we want, any way we want with no penalty.”
Individuals were allegedly tricked into purchasing Keller Williams Regions and Market Centers because the brokerage inflated profitability metrics, per the suit. After individuals signed contracts and became franchisees, they were required to make unnecessary purchases, such as training from the MAPS service, pay increasing technology fees and adopt Keller Williams’ market cap.
Franchisees were also forced to purchase Gary Keller’s books or face being ostracized within the company, serving Keller's “own personal enrichment and self-serving needs,” per reporting by The Real Deal on the suit.
The suit claims Davis and other owners were tricked out of millions of dollars due to Keller’s policies, which forced holdings sales at deflated values, per TRD.
Keller Williams denied all allegations of wrongdoing.
“This is yet another attempt by John Davis to smear Keller Williams in the press under the guise of a lawsuit,” Keller Williams spokesperson Darryl Frost told Bisnow by email, adding that two federal courts have already told Davis to resolve his issues with the company. “We will continue to act professionally, follow the law, and aggressively defend these baseless claims.”
The suit alleges five causes in total, made up of two civil RICO causes, one Sherman Act restraint, one intentional fraud claim and one breach of contract cause.
Davis resigned voluntarily in 2019, Inman News reported at the time.
In June, an earlier $300M fraud suit Davis filed against the brokerage was sent to arbitration by a Texas judge.
CORRECTION, SEPT. 5, 10:30 A.M. ET: This story previously misstated the judge’s directive to Davis regarding his previous cases against Keller Williams. This story has been updated.
