A complaint accuses Keller Williams and Gary Keller of inflating key profitability metrics, including company sales and profits. Gary Keller faces many lawsuits, and the real estate firm he co-founded is Keller Williams. The firm’s CEO, John Davis, filed the second lawsuit against the firm in the Western District of Texas.
In the initial filing, Keller and Keller Williams, Davis’ names were mentioned as KW former president Josh team, Business MAPS Management LLC, and Business MAPS Ltd. The new complaint expands the list to include the sons of Gary Keller, Johnathan Duree, Marc King, Matt Green William, Jason Abrams, KWx, and 72 Sold Lawsuit.
Furthermore, the new filing included Jesse Herfel, a former Keller Williams Market Center owner and regional director of the Southwest Region of Keller Williams Realty International. In the original complaint, Davis stated that when the franchisees signed a contract, the defendants adopted KWRI’s present market cap, which is the fee agents pay for their market centers.
Davis alleged that the fees were used to increase technology and unneeded goods and services from affiliated companies like MAPS, which provides accounting and training. The amended complaint accused Gary Keller of Operating under a practice and pattern of improperly using fees collected from franchisees.
The fees were used for both personal gain and to fund additional Keller-owned entities. According to the filing complaint, Keller left some funds for himself and his son, John Keller. Besides, he used the funds to create other businesses and forced franchisees to buy into them.
In this complaint, the example is given of the 72 Sold leads company, and Keller became part of a joint venture with 72 Sold and owned 49 % of the company.
According to this filing, the pattern results in a snowball effect for franchises, where their money is put toward other companies. In the statement, Darryl Frost, a Keller Williams spokesperson, wrote that the firm will continue to defend Davis aggressively for baseless claims.
In addition, John Davis filed new allegations against new parties to get more press coverage. KW’s technology is the prime example of this alleged improper use of funds, and it was noted that in the past six months, the manded monthly technology fee has doubled and increased from $25 to $65 per agent.
The complaint statement also stated that Gary Keller has yet to do anything other than pocket the increased technology fee for some time.
The agents must pay the technology fee to complain and are compensated upon closing their transactions. But Herfel and his market center agents found it impossible to run the day-to-day operations of his firm with the technology provided by Gary Keller.
The top real estate team was using outside technology, and the complaint also suggested that Keller had purchased outside technology to implement for Livian. In this 72-sold lawsuit, the complaint added an embezzlement claim to the disclosed Racketeer-Influenced and Corrupt Organizations claims and the Sherman Act claim.