Keller Williams Realty, Keller Williams Leaders Sued for Racketeering

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Keller Williams Realty, Keller Williams Leaders Sued for Racketeering

“Why buy what you can steal” culture permeates Keller Williams Realty to enrich leaders

Austin, TX –News Direct– Omodt & Associates

(Austin, TX – August 29, 2023) In a far-reaching civil complaint filed today, former Keller Williams President and CEO John Davis alleges Keller Williams Realty, Chairman Gary Keller, former executive Josh Team and Keller Williams-affiliated MAPS Coaching of racketeering and conspiracy to defraud Davis and others through orchestrated schemes to induce, diminish, devalue and cheat Davis and other parties. The suit seeks a jury trial and financial damages in the millions of dollars.

The suit pulls back the curtain on Keller Williams’ inner workings to reveal a brazen “why buy what you can steal” culture that Gary Keller and his associates promoted. According to the complaint, Keller is quoted in one email exchange as saying: “Because we’re private, we’re not under a microscope. We can do what we want, any way we want with no penalty.”

Under one of the schemes in Keller’s playbook, Davis and other local market center and region owners were defrauded out of millions of dollars by forcing sales of their holdings at deflated values to Keller and his hand-picked buyers.

The suit outlines how “KWRI undermines independently owned and operated Market Centers by tortiously interfering with independently owned and operated investment groups, intentionally creating chaos to pit the independently owned and operated Market Centers each other and forcing out Market Center leadership in bad faith for improper purposes, so that in their weakened state, Keller and his associates can demand that a sale be made to them at a price that is criminally low.”

“Through this scheme, KWRI itself and the other Defendants suffer no loss, and only gains, from the harm caused to the individual owners. Unless stopped, Defendants will continue to subject franchisees to the same scheme for the purposes of substantial interest and profit,” the complaint alleges.

The suit also lays out Keller’s ruthless pursuit of unilaterally altering franchise agreements, including agent commission caps, to enrich himself and his cohorts. Keller’s insistence in lowering caps eventually led to Davis’ voluntary resignation in early January 2019

Indeed, following Davis’ departure, Keller and his cohorts did order the lowering of caps which had the negative impacts Davis warned of, namely a loss for the local market center, a loss for the region, yet a win of KWRI’s royalty fee, which did not change.

“Nothing in the individual franchise agreements gave Keller or KWRI the power to set market caps themselves for independently owned and operated Market Centers,” the complaint states. “Indeed, in recommending specific and universal Market Center cap amounts, Keller was overstepping the franchisee’s role in leading an independently owned and operated Market Center.”

The filing in The United States District Court, Western District of Texas, Austin Division, outlines five causes of action, including two civil RICO causes, one Sherman Act restraint upon commerce cause, one intentional fraud in the inducement, and one breach of contract cause.

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