Embezzlement Allegations Added to Lawsuit Against Keller Williams

The battle between former Keller Williams CEO John Davis and his old firm has escalated, adding to the stack of legal challenges facing the brokerage and its co-founder Gary Keller.

Last week, Davis amended the lawsuit he filed in August against Keller Williams, adding accusations of embezzlement, Inman reported.

Davis’ original racketeering lawsuit alleged that the brokerage committed fraud and financial abuse on the part of Gary Keller and former company president Josh Team. Davis accused the firm of inflating crucial profitability metrics to deceive individuals into purchasing Keller Williams Regions and Market Centers.

The amended suit alleges that Gary Keller misappropriated fees collected from company franchisees, diverting those funds for personal ventures and creating new Keller Williams businesses through his holding company KWx. The accusations go beyond financial improprieties, asserting that Keller directed fees to benefit his son John Keller.

Keller Williams denied the allegations, via spokesperson Darryl Frost.

“Once again, John Davis has filed baseless allegations against new parties to get more press coverage,” Frost, told the outlet.

In the amended lawsuit, attention is drawn to 72Sold, a platform that allows homeowners to sell their homes quickly and at a high price. The lawsuit claims that the platform, of which Gary Keller allegedly has a 49 percent stake, engages in misleading national advertising, contrary to its characterization as a “leads and marketing platform.”

The list of defendants has also expanded, now including Keller Williams president Marc King, KW Worldwide president William Soteroff, head of industry and learning Jason Abrams and regional directors Jonathan Dupree and Matt Green, plus Livian, 72Sold and the KW Southwest Region. The original 58-page lawsuit has grown to 71 pages, with the claims of embezzlement and general partner liability, alongside the original RICO and Sherman Act claims.

The lawsuit came three months after a judge ordered Davis to settle a $300 million fraud claim against Keller Williams in 2022. The suit seeks unspecified damages and a jury trial.

The first lawsuit followed accusations of sexual misconduct against Davis.

—Quinn Donoghue