Mauricio, the husband of Kyle Richards, is being accused of defrauding a client when it comes to a $32 million mansion he helped that client sell. The lawsuit alleges that Mauricio secretly sold the mansion to himself, for less than it was worth, only to flip the property a year later for the sale price of $69.9 million.
According to The Blast, the mansion in question once belonged to Teodoro Nguema Obiang Mangue, who was accused by the U.S. government of using stolen funds from his home country of Equatorial Guinea (he is the president’s son) to purchase the home.
As a result, the home was seized and under an agreement, once the home got sold, the U.S. government would pocket $10 million of the proceeds while the rest would be returned to the government of Equatorial Guinea.
This is where Mauricio comes in as he owns the popular luxury real estate company called The Agency. In 2015, Mauricio got the listing and found a buyer who agreed to purchase the home for the $32 million price. The sale was approved by the United States on February 8, 2016.
However, things got tricky as prior to the completion of the sale, Mauricio received one more offer from a man named Sam Hakim, who offered to pay the original buyer $8 million if he would agree to back out of the sale, so that he could then purchase it. Mauricio took the offer to the buyer (without informing the seller) who then countered back, asking for $15 million instead to give up the home, with Mauricio and his partner receiving a 4% brokerage fee.
A deal was ultimately reached with the help of Mauricio, and apparently, this alleged action by Mauricio was unethical due to the fact that he failed to disclose the new offer to the seller of the home prior to the closing. And by the time the deal was discovered, it was too late for the seller to back out of it.
Mauricio is being accused of failing to act on his duty to inform the seller of ALL offers including the offer to the buyer by the third party.
Even worse, the third party offer, in addition to the 4% brokerage fee to Mauricio, also allowed him to be an investor in the home, meaning he got a profit a year later when the home was sold again for the $69.9 million price.
The lawsuit also states that Mauricio, a seasoned real estate agent, should have known at the time of the sale that the home was rapidly appreciating in value and that the $32 million sale price was too low.
But it gets even worse as the lawsuit was filed by Mauricio’s own insurance company, Western World, who feels they shouldn’t have to pay for damages being claimed by Sweetwater Malibu LLC (the seller’s LLC).
So basically, the seller sent a letter to Mauricio’s insurance company demanding $8 million in damages due to Maricio’s actions. The seller wanted Mauricio to pay $5 million, and for his insurance company to pay the remaining $3 million.
Mauricio’s insurance company started defending him in the case but ultimately got fed up, and decided that due to Mauricio’s alleged unethical actions, they should not be responsible for spending large amounts to defend him and The Agency.
Mauricio has responded to the lawsuit by accusing his insurance company of teaming up with the seller to hold him liable.
The case remains ongoing and Mauricio has yet to publicly comment on the lawsuit.
He is being accused, by the seller, of breach of fiduciary duties and negligence due to his failure to disclose all offers and counteroffers, failure to disclose his own financial benefit from the sale and for causing the home to be sold for a lower price than it should have been.
This case could have serious consequences for Mauricio as California is very strict when it comes to real estate laws, so his real estate license could be in jeopardy. Additionally, it’s unknown what other consequences could result from this considering the fact that the U.S government also technically owned part of the home due to the seizure of the property from the original owner. So, when Mauricio allegedly screwed over the seller, he also screwed over the U.S. government.
Photo Credit: Jennifer Graylock/INFphoto.com
[Editor’s Note – This case sounds rather complicated so if there are any realtors or real estate experts reading this, please feel free to help break it down in layman’s terms for the rest of us!]
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