In his first few weeks as Douglas Elliman CEO, Michael Liebowitz embarked on a week-long excursion to California and Nevada.
His “Dispatch from the Western Region” email recapping the trip read like a postcard. There was the Beverly Hills sales meeting, a stop at Century City’s Park Elm luxury residences, a conversation at Newport Beach’s members-only Elwood Club, a tour of a Rancho Santa Fe listing and a walk-through of Elliman’s new Summerlin, Nevada, office.
Liebowitz hinted at the “vision taking shape” for the company as he looks to make his mark following the departure of longtime executive Howard Lorber.
The chief executive touched down in the Western offices at a time when brokers and others close to the business say culture issues have been festering, pushing out managers and sparking a slew of litigation.
Trouble in the West
Elliman’s push West was made official in 2014, when it entered California with a Beverly Hills address. Texas came in 2019 when the brokerage formed a joint venture with Houston-based Sudhoff Companies. The Nevada office opened in 2022.
These markets comprise the Western region, which sits in the shadow of New York and Florida: The West generated $189.6 million in 2023 total revenue, or about 20 percent of the companywide bucket.
But as of late, the region is outsized in terms of drama and litigation.
TRD spoke with nine industry people — a combination of agents and employees across brokerages, including some with direct knowledge of Elliman’s inner workings — with all requesting anonymity in a bid to avoid retaliation. Their accounts repeat accusations of a variety of behaviors crossing professional and ethical lines amid a workplace hyper-focused on celebrity agents and a win-at-all-costs mentality out West.
First came one lawsuit filed in October California Superior Court by former Portfolio Escrow President and founder William Grasska. The lawsuit against Elliman’s Portfolio Escrow business, Douglas Elliman of California, Douglas Elliman of California Financial, Western Region CEO of Brokerage Stephen Kotler and other brokerage and escrow employees alleges breach of contract, negligence, defamation and unfair business practices among other complaints.
Kotler was tapped for the West’s top spot in April 2017. Shortly after, he assumed much larger oversight than he initially signed on for: Elliman announced plans to buy rival Teles Properties in a deal that added 500 agents and 20 offices overnight.
Still, the executive doesn’t have the same visibility and influence as Howard Lorber and Scott Durkin did in New York, or Jay Parker in Florida, the brokerage’s biggest markets. But he does appear in some of the legal action by those crying foul from their experiences in the region.
Grasska alleged in the suit, among other things, Kotler on multiple occasions told him he “was not the youngest guy in the room.”
Elliman has since sued Grasska, accusing the escrow executive of his own misdeeds, including a kickback scheme involving a “high-profile Los Angeles real estate broker” on a reality TV show. The unnamed broker provided Portfolio Escrow with their business in exchange for as much as a 20 percent cut of the escrow fee per transaction in an amount exceeding $100,000, according to the complaint. Attorneys for Elliman alleged in the lawsuit these funds were moved through multiple LLCs.
“Toxic leaders start at the very top; it’s not the middle.”
Elliman reiterated a statement provided in October in clarifying no Douglas Elliman agents were involved in the allegations brought against Grasska.
“Douglas Elliman’s complaint against Grasska was filed after uncovering a deliberate scheme by Grasska and certain other individuals to defraud the company,” a spokesperson for Elliman said in a statement. “The complaint includes allegations of fraud, embezzlement of company funds, and other egregious misconduct. Douglas Elliman is confident that the courts will deliver a just outcome.”
Grasska did not respond to requests for comment. His attorney Angel Horacek declined comment.
Christina Carrillo, former Elliman Newport Beach executive manager of sales, resigned from the brokerage in October and filed her lawsuit shortly after. The case in California Superior Court is against Elliman of California, its financial LLC and Kotler with accusations of sexual harassment, retaliation, negligent supervision and wrongful termination among other complaints.
“Toxic leaders start at the very top; it’s not the middle,” Carrillo said.
Carrillo, who declined to discuss the details of her case or time at the brokerage, was the West’s most recent departure. There was also James Horne, senior executive manager of sales in the Houston office, who left in November 2023 after about a year and a half at the brokerage. Assaf Sinai, executive manager of sales and broker of record in Nevada, built the office from the ground up in 2022 before also leaving this year. Both Horne and Sinai did not respond to requests for comment.
Carrillo has alleged sexual harassment, retaliation and wrongful termination among other complaints. The lawsuit accuses Kotler of repeatedly instructing her to use her “sex appeal,” whether through dress or action, to help the firm obtain more clients. Her directives were to “look pretty” and “smile.”
When Carrillo raised concerns about the Altman Brothers Team — helmed by brothers and “Million Dollar Listing Los Angeles” stars Josh and Matt Altman — soliciting others’ active listings, the CEO allegedly snapped.
“Enough Christi. I have made millions from the Altman Brothers so shut up. If other agents and brokers get fucked over, I don’t care. So be it,” Carrillo recalled Kotler saying, according to her lawsuit.
A spokesperson for Elliman said the brokerage “never received any complaints of sexual harassment, nor was management aware of any such claims” from Carrillo’s time at the brokerage.
“Had any such complaints been received, those complaints would have been thoroughly investigated consistent with our policies and procedures,” the spokesperson said in a statement.
The Altmans are not named as defendants in the lawsuits from Carrillo or Grasska.
“As long as people are making dollars, they don’t care,” said a female luxury agent, who was a top producer and high up at Elliman, in describing West Coast management’s approach to bad behavior.
The agent echoed Carrillo’s account of the workplace for women and recounted how the standard line in the office from Kotler when concerns were raised was to, “Keep my fucking mouth shut or there’s the fucking door.”
The brokerage called Grasska’s and Carrillo’s lawsuits “baseless.”
“TRD’s insinuations regarding the Altmans or any other Douglas Elliman agents are unfounded, and we firmly reject any implication of wrongdoing,” the brokerage said in a statement.
Rules for thee…
A year and a half ago, Rob Giem had lunch with Kotler.
Giem, a name synonymous with Orange County luxury homes, went to hear Kotler’s pitch to have him join the brokerage. The conversation took a turn as Giem recalled Kotler spending 20 minutes talking up Elliman’s culture. Kotler claimed that meant they only hired agents that fit within a mold: ethical and they treated others well.
But Giem said that didn’t seem to hold up with some of the market’s best-known brokers.
“He just went on and on and on about how important their culture is,” Giem described. “I said, ‘OK, well that begs the question, Why do you employ the Altmans? They’re the most reviled in the business.’ And you know what he said? He said, ‘We make $2 million a year off of their business and it’s important to us to make a profit.’”
The brokerage denied Giem’s account.
Orange County’s luxury market is small relative to Los Angeles, with the heart of it stretching from Newport Harbor to Laguna Beach. It’s a market that’s home to Newport Coast, which Realtor.com dubbed the priciest zip code in the country with a median price of $11.7 million.
Given the smaller pool, agents who work there consider it a tight business community where news of bad behavior spreads quickly.
“Most of the [Orange County] brokerage community, we’re a pretty close-knit crew,” said one veteran OC luxury agent. “We all know each other and most of us want to cooperate and work together. It’s just a better way to conduct yourself.”
“Culture is everything. A friendly, winning attitude isn’t just desirable — it’s essential.”
The Altmans have turned their aggressive business into star power. In season 15 of Netflix’s “Million Dollar Listing Los Angeles,” Josh and Matt Altman toured an Encino home. The seller firmly told the duo he had “commitments” but didn’t intend to sign the listing agreement for another few weeks until the home was staged.
The brothers convinced the seller to let him see what they could do to sell the property before he signed the agreement.
“Our motto at the Altman Brothers is ready, fire, aim. We see an opportunity. We take the shot. We don’t wait till everything’s perfect,” Josh Altman said in the episode.
Four individuals with knowledge of the matter said they witnessed the Altmans soliciting others’ active listings, sometimes using the promise of lower fees, ranging from 1 percent to a flat rate, to woo sellers’ business.
A former Elliman manager said they also witnessed the Altmans consistently bypass the brokerage’s policy requiring manager approval to take listings under 2.5 percent.
“It’s not illegal to take 1 percent. Where it becomes unethical is that Elliman is not a discount brokerage and company policy states you’re not allowed to take a listing under 2.5 percent,” the ex-manager said.
Elliman called the accusations around the Altmans soliciting others’ active listings and bypassing company policy to offer discounted rates false.
Big business
Where the Western Region does shine is in the brokerage’s escrow business, generating the lion’s share of overall escrow and title revenue companywide.
In 2023, the West brought in $11.4 million in escrow and title fee revenue, or 81 percent of the companywide total, according to Elliman’s annual report. That’s a trend also seen in 2022 and 2021.
It’s also ripe ground for impropriety by some of the brokerage’s biggest stars, former employees have claimed.
Carrillo said in her lawsuit that an escrow manager had informed her of senior management “inflating closing prices and concealing credits of agents” in an attempt “to give more kickbacks to certain agents,” who went unidentified.
James Clark, an attorney for Carrillo, did not respond to a request for comment.
Grasska’s complaint, meanwhile, offered a similar account, pointing directly to the Altmans as the beneficiaries of a scheme whereby an escrow manager “was asked to inflate a closing statement” in a bid to boost their commission.
A spokesperson for the Altman Brothers Team said the group follows all Douglas Elliman rules and regulations.
“We are proud of our track record and disappointed that our competitors would resort to making baseless claims and spreading misleading rumors,” the spokesperson said. “Our focus remains on running our business with integrity and earning the trust of our clients as we continue to grow in Southern California.”
Grasska, who sold Portfolio Escrow to Elliman in 2019, also accused his former firm and the brokerage of enticing agents to use the escrow service with mixers and offers to pay for headshots and other forms of marketing.
Federal law under the Real Estate Settlement Procedures Act states, “no person shall give and no person shall accept any fee, kickback or other thing of value” in relation to the services used in relation to a transaction. This can apply to agents, lenders, escrow officers and title companies. The idea in 1974 when RESPA was passed was to add transparency to the costs associated with the services tied to a real estate transaction.
In California, the Department of Financial Protection and Innovation licenses and regulates independent escrow firms. Escrows affiliated with real estate or title companies are licensed and regulated by the California Department of Real Estate or Department of Insurance, respectively.
Grasska alleged in his lawsuit Portfolio Escrow is being audited by the DFPI.
A spokesperson for the regulator declined comment.
Four industry sources with knowledge of the matter said Elliman agents in California were pressured to use Portfolio Escrow; two of those individuals also claimed kickbacks were offered. One said marketing dollars were offered to agents who funneled business to Portfolio Escrow, echoing Grasska’s claims in his suit. The problem, that same person said, is Portfolio’s fees were expensive and hardly competitive with alternatives on the market.
The other individual said buyer credits were withheld from closing statements, which would also be a RESPA violation.
The brokerage called the claims around the escrow business false.
Elliman’s culture has come under the spotlight with recent executive moves.
In October, longtime CEO and Chair Howard Lorber abruptly retired. It was later reported Lorber was pushed to resign amid a “sexually charged work culture,” according to the Wall Street Journal. Additional reporting by Bloomberg revealed Lorber admitted in an internal probe weeks before his departure of having “intimate relationships” with two brokers at the firm. This all came out months after TRD and other publications reported on rape and sexual assault allegations against two of Elliman’s former star brokers, Oren and Tal Alexander.
Liebowitz seized on his first public appearances as chief executive to meet and greet with local teams.
The new CEO signed off on his Western dispatch with a tone of optimism, claiming “extraordinary opportunities ahead” as he headed east to meet and greet with agents and staff in Long Island and Brooklyn.
As he espoused in an email to agents and staff in November, “Culture is everything. A friendly, winning attitude isn’t just desirable — it’s essential.”