Real Housewives of Beverly Hills star Kyle Richard’s ex Mauricio Umansky is sued for ‘greedy’ COVID loans that ‘he didn’t need’
As a seasoned observer of the business world, I find the ongoing legal battle between The Agency and the United States government quite intriguing. Having worked with various companies throughout my career, I’ve seen both sides of the coin – the struggle to stay afloat during tough times, and the temptation to bend rules for personal gain.
As a die-hard fan, I can’t help but share the latest scoop about my beloved Kyle Richards from The Real Housewives of Beverly Hills! It seems her former partner, Mauricio Umansky, is finding himself in hot water due to a $3.5 million PPP loan lawsuit. Oh, the intrigue!
54-year-old real estate agent Mauricio, longtime spouse of Kyle, also 55, applied for both the Payroll Protection Program (PPP) and a loan under the CARES Act amidst the pandemic.
The main intent behind the government loans was to offer struggling businesses temporary financial aid during the COVID-19 pandemic, thereby helping them avoid laying off their staff members.
Mauricio and his associate Billy Rose secured a substantial loan of $3,521,153, to finance their high-end real estate enterprise named The Agency.
In July 2023, Realtor LLC submitted a complaint alleging that The Agency had made false claims under the Federal False Claims Act.
The court records, initially sealed and submitted last summer, have been made available to us at Touch following their recent unsealing.
The Agency went through two rounds of applications for the loans.
During round one, the luxury real estate agency requested $2.3 million, which was approved.
For round two, the brand applied for a loan of $1.1 million, which was also approved.
The lawsuit claimed: ‘These two programs were created solely with the intention of helping employees avoid being let go, by offering loans to struggling businesses unable to meet their payroll due to COVID-19’s effects – rather than to boost or maintain profits for companies that already had enough funds to cover employee salaries.’
Mainly, a large portion of the funds ended up in the hands of the bigger businesses, while numerous small enterprises such as eateries, grocery stores, and others adversely affected by COVID-19, found themselves without support due to reduced business opportunities.
A significant number of large, successful companies secured their loans through false representations about their financial status. They often claimed that their businesses qualified for loans, even when they did not, or they distorted how the loaned funds would be utilized.
The record showed that their earnings might not have decreased significantly, if at all, since their income stemmed primarily from a proportion of high-end real estate transactions, rather than common consumers who couldn’t purchase items or dine out due to COVID-19 limitations.
‘In fact, The Agency’s business grew massively during the COVID-19 pandemic.
‘This is a case about greed during a national health emergency.’
In 2019, The Agency reported a sales volume of approximately six billion dollars. By the following year, this figure had grown to roughly $6.5 billion.
It went on to emphasize that the company ‘ballooned to $11.2 billion in 2021.’
The suit claimed that the defendants had incorrectly stated: “The current economic instability necessitates these loans for the applicant’s continued business operations, and the funds are required to meet employee payroll, which is a condition for obtaining Paycheck Protection Program (PPP) loans.”
Beyond that, the financial assistance they sought and were granted surpassed the loan threshold of twice their monthly wage, capped at an annual salary of $100,000 per employee. In my role as a diligent follower, I find this to be quite substantial.
Besides getting loans from these fake qualifications, the Defendants subsequently requested and obtained complete loan forgiveness, aware that they didn’t meet the criteria for the loans initially.
Instead of needing Paycheck Protection Program (PPP) loans to sustain their day-to-day activities and compensate their workers, the Defendants already had sufficient financial resources to cover these expenses on their own.
‘Instead, they only bolstered Defendants’ profits.’
The legal case progressed: ‘The defendants’ operations primarily focused on high-end property deals for affluent executives and tycoons, who remained unaffected by the pandemic.’
‘The Agency does not deal in starter homes, but luxury properties for the rich and famous, with their average sales price at $1.92 million.
This differs from smaller enterprises like groceries, eateries, and other product/service providers, who thrive on a large number of frequent customers.
It’s particularly shocking that they resorted to fraud, given their substantial wealth. Mauricio and Billy, joint owners of The Agency, are already multimillionaires, with property portfolios valued in the tens of millions each.
If it becomes essential, postponing or minimizing the distribution of earnings could prevent them from facing financial difficulties that might otherwise halt their business operations.
The realtor is requesting the court to make each defendant pay three times the losses incurred by the U.S. due to the defendants’ actions, along with a civil penalty ranging from $12,537 to $25,076 for every false claim, as mandated by law.
Maurico and The Agency have denied the claims.
A spokesperson from The Agency informed InTouch: ‘Regarding current court cases, we prefer not to comment. However, it’s important to note that The Agency has consistently maintained a strong commitment to ethical conduct in every part of its operations.’
Similar to numerous other businesses, we encountered substantial difficulties due to the COVID-19 pandemic, such as reducing staff and scaling back operations.
Regardless of the circumstances, our priority remains on providing outstanding customer service and employee support, with this being particularly important during difficult times.
In this matter, the statements made are inconsistent with how our business was run and our financial status when we applied for our Paycheck Protection Program (PPP) loans. We plan to strongly contest what we believe are baseless accusations.
Kyle and Mauricio split during the same month that the lawsuit was brought on.
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2024-08-30 17:23