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‘RHOBH’ Star Kyle Richards’ Ex Mauricio Umansky Sued Over Alleged $3 Million PPP Loan ‘Greed’
Real Housewives of Beverly Hills star Kyle Richards’ estranged husband, Mauricio Umansky, and his real estate company are accused of obtaining $3.5 million in payroll protection program (PPP) loans that they didn’t need, In Touch can exclusively report.
Mauricio and his company deny the claims.
According to court documents obtained by In Touch, Relator LLC filed a complaint for violations of federal false claims act against Mauricio, 54, his business partner William “Billy” Rose and their company The Agency.
The lawsuit was filed under seal in July 2023 but recently unsealed by the court.
“This is a case about greed during a national health emergency,” the filing read.
The suit said Mauricio and Billy, through The Agency, applied for and received two Payroll Protection Program and CARES Act loans in the amount of $3,521,153.
“Those two programs were enacted for the sole purpose of preventing termination of employees by providing loans to businesses that were unable to pay them due to the impact of COVID-19, not to bolster or preserve the profits of a business that had sufficient funds available to pay its employees,” the suit explained. “Yet, the vast majority of the proceeds went to those very businesses, leaving many small businesses like restaurants, grocers and other small businesses that were directly impacted by COVID-19 through lost business out in the cold.”
The suit continued, “Many of the large, profitable businesses obtained their loans by misrepresenting their financial situations, claiming their businesses were eligible when they were not, or by misrepresenting how the funds would be used.” Relator LLC said Mauricio and Billy are the heads of a luxury real estate company.
“Their profits would have been minimally impacted if at all, because their revenue was based on a percentage of real estate transactions, typically between millionaires and billionaires, not consumers who were unable to buy goods or dine out because of the COVID-19 restrictions. In fact, The Agency’s business grew massively during the COVID-19 pandemic.”
The suit said The Agency had $6 billion in sales volume in 2019 but that rose to $6.5 billion in 2020 and “ballooned to $11.2 billion in 2021.”
The suit alleged, “Despite this, in order to receive the loans, Defendants falsely certified that ‘current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant’ and that they needed the loans to pay their employees, a requirement for eligibility for PPP loans.”
“In addition, the amounts they applied for and received exceeded the loan limit of 2.5 monthly salary with a cap of $100,000 annual salary per employee. In addition to receiving loans based on these false certifications, Defendants later applied for and received full loan forgiveness, knowing they were ineligible for the loans in the first place,” the lawsuit read.
The suit said that The Agency applied for a PPP loan for $2.3 million during round one of the paycheck protection program. The loan was approved. During round two of the program, The Agency applied for a loan in the amount of $1.1 million. It was also approved.
“The PPP Loans were not necessary to support Defendants’ ongoing operations and pay their employees’ salaries, nor were they used for such purposes, because Defendants had ample liquidity to do so. Instead, they only bolstered Defendants’ profits,” the suit alleged.
“Defendants’ business revolved around luxury real estate transactions of white-collar millionaires and billionaires who were not impacted 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 contrasts with small businesses, such as grocery stores, restaurants and other companies that sell other products and services, and who depend on a voluminous flow of customers,” the suit continued.
Relator slammed Mauricio and Billy for taking the loans.
“The fraud to protect profits here is all the more egregious because [Mauricio] and [Billy], who co-own The Agency, are already extremely wealthy individuals who each own tens of millions of dollars of real estate. Reducing or foregoing distribution of profits if necessary for a period of time would not have made it financially impossible to keep their business in operation.”
The suit said Mauricio and Billy received loan forgiveness on both PPP loans. Relator demanded the court enter judgment against each defendant in an amount equal to “three times the damages that the United States has sustained because of Defendants’ actions, plus a civil penalty of not less than $12,537 and not more than $25,076 for each and every false claim as are required by law.”
Mauricio, Billy and The Agency have yet to respond to the lawsuit.
A rep for The Agency tells In Touch, “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.”
Mauricio and Kyle, 55, split in July 2023, after 27 years of marriage, the same month the lawsuit was brought.
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