It’s a story of corruption, Ferraris, Michael Jackson memorabilia and now, alleged real estate agent impropriety.
An insurance company claims in a lawsuit filed in federal court that Agency co-founder Mauricio Umansky misled a client when he conspired with another investor to underpay for a Malibu mansion and then flip it for $70 million. That’s more than double what they paid for it a year earlier.
Western World Insurance, Umansky’s insurance company, filed the suit against Umansky on June 25, seeking relief from having to pay any damages to the seller.
The story dates to 2011, when the U.S. government accused Teodoro Nguema Obiang, the son of Equatorial Guinea president Teodoro Obiang, of using stolen funds to purchase an assortment of lavish assets. The purchases included the 15,000-square-foot mansion on Sweetwater Road in Malibu, as well as a Michael Jackson-signed jacket and several Ferraris.
As part of a settlement with the Department of Justice, Obiang agreed to relinquish the home. Of the sale price, at least a third was slated to go to the U.S. government, while a large chunk was set aside for the people of Equatorial Guinea, a country in Central Africa.
Umansky, co-founder of the Agency and a star of Bravo reality shows, was tapped as the listing agent in 2015. A few months later, he brokered a deal to an individual named Mauricio Oberfeld, who agreed to pay $32 million. Umansky also invested in the deal, according to the suit.
With approval from the government, the home sold in February 2016. A year later, Umansky and Oberfeld flipped the home for $69.9 million, over double what they had paid for it, records show.
While courting offers, Umansky received one from a man named Sam Hakin, who offered to pay Oberfeld an extra $8 million to get first bids on the home, according to the lawsuit. Umansky countered that offer without bringing it to the seller, demanding Hakin pay $15 million, instead of $8 million, with the Agency retaining a 4 percent brokerage fee from the sale.
Sweetwater Malibu LLC, the seller’s LLC, sent a letter to Umansky and the Agency nearly a year ago, requesting they cough up $8 million in damages for failing to disclose the relationship with Oberfeld, and for intentionally misrepresenting the value of the home, among other claims. In a second letter sent in February, the seller said Umansky could pay the $5 million, with the remaining $3 million coming from his insurance, according to the suit.
It was Umansky’s insurance company that felt aggrieved enough to sue the star agent. Western World alleged in the 33-page lawsuit that Umansky made several misstatements in his application for an Errors and Omissions liability policy, including incorrectly stating that the value of the largest transaction he had completed in the past year was $30 million. He applied for the policy in June 2017, two months after selling the property for $70 million.
Western World is requesting reimbursement for all benefits received by Umansky and his firm, as well as an official declaration from a judge stating Western World has no duty to defend Umansky nor the Agency.
A spokesperson for the Agency told The Real Deal on Monday that Umansky had “acted entirely appropriately” in handling the sale. Umansky “handled the transaction with honesty and integrity and we will vigorously defend ourselves against this meritless lawsuit,” she added.
RealityBlurb first reported the story.