Real Housewives star Kyle Richards' ex Mauricio Umansky sued for 'greedy' $3.5m Covid loans 'he didn't need'

Real-estate agent Umansky, aged 54, who was married to 55-year-old reality star Richards for 27 years, had filed for the Payroll Protection Program (PPP) and the CARES Act loan during the pandemic. But, it’s now been found that he was being “greedy” in asking for $3.5million (around £2.6million), which he didn’t actually need.

The purpose of the government loans was to provide businesses in need with financial help as the country battled against coronavirus, so that employees could be kept in their jobs.

Mauricio and his business partner William 'Billy' Rose were approved for a loan to the full amount of $3,521,153 (around £2,681,762) for their luxury real estate company called The Agency. In July 2023, however, Realtor LLC filed a violations complaint over The Agency's alleged federal false claims act.

American publication In Touch Weekly has seen the court documents, which were filed last summer and then recently unsealed.  The documents state that The Agency went through two rounds of applications for the loans.

During round one, the luxury real estate agency requested $2.3 million (around £1.7million), which was approved. For round two, the brand applied for a loan of $1.1 million (around £835,522), which was also approved. 

The documents stated: “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 lawsuit then stated: “The Agency’s business grew massively during the Covid-19 pandemic. This is a case about greed during a national health emergency.”

The lawsuit explained that in 2019, The Agency had $6billion (around £4,569,687,600) in sales volume, and in 2020, that increased to $6.5 billion (around 4,950,495,049). It went on to state that the company “ballooned to $11.2 billion (around £8,530,083,520) in 2021.”

The lawsuit continued: “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 (£76,162), 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 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 lawsuit continued: '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 $1.92million (around £1.5million). 

'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.”

Realtor demanded that the court forces each defendant to pay “three times the damages that the United States has sustained because of defendants' actions, plus a civil penalty of not less than $12,537 (around £9,548), and not more than $25,076 (around £19,098) for each, and every false claim, as are required by law”.

Maurico and The Agency have denied the claims. 

A representative for The Agency told In Touch Weekly: “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.”

Kyle and Mauricio split during the same month that the lawsuit was brought on, during summer 2023.