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This story was updated after publishing with an updated comment from Douglas Elliman and comments from Matt and Heather Altman.
Amidst leadership upheaval on the East Coast, Douglas Elliman’s Western Region is also under fire for alleged kickbacks and preferential treatment toward the Altman Brothers Team in two LA Superior Court lawsuits filed in October.
The lawsuits have surfaced as all eyes have been on Elliman after former CEO Howard Lorber’s abrupt retirement last week, which was followed up by the unexpected termination of brokerage President and CEO Scott Durkin.
Now Stephen Kotler who leads Elliman’s Western brokerage operations is also being placed under scrutiny in a pair of legal actions, The Real Deal reported on Thursday.
In a lawsuit filed by former Newport Beach office Executive Manager of Sales Christina Carrillo, the former manager, who resigned earlier in October, alleged that credits had not been reported on closing statements in order to inflate the commissions of certain agents. Carrillo also calls out the Altman Brothers Team, alleging that the team acquired clients from other agents’ and brokers’ active listings.
Josh Altman, Matt Altman and Heather Altman have not been named as defendants in either lawsuit.
Carrillo further alleged that when she brought up these issues to Kotler, he disregarded them. She is also suing Kotler for sexual harassment and retaliation.
“Enough Christi. I have made millions from the Altman Brothers, so shut up,” the lawsuit alleges that Kotler told Carrillo. “If other agents and brokers get fucked over, I don’t care, so be it.”
Douglas Elliman asserted that it had never received sexual harassment complaints from Carrillo.
“Douglas Elliman never received any complaints of sexual harassment or related misconduct involving Christina Carrillo, nor was management aware of any such claims,” a representative said in a statement emailed to Inman.
“Had any such complaints been received, those complaints would have been thoroughly investigated consistent with our policies and procedures, as has been the case with complaints made from time to time against others at the Company over the years. Douglas Elliman is committed to fostering a workplace environment that is safe, comfortable and free of sexual harassment.”
A second lawsuit filed by plaintiff Bill Grasska, who was previously president of Douglas Elliman’s Portfolio Escrow, makes similar allegations regarding altered closing statements.
The suit, which is against Douglas Elliman’s California brokerage and its financial subsidiaries, Kotler, escrow officer Melinda Topete, Western Region COO William Begert and escrow officer Renee Mills, alleges that the company asked managers at Portfolio Escrow to “inflate a closing statement to allow the Altmans to earn more commissions.”
Grasska launched Portfolio Escrow in 2009 and sold it to Douglas Elliman in 2019. He is suing for retaliation, breach of contract and defamation, as well as other allegations. The lawsuit states that Portfolio Escrow is also currently under audit by the California Department of Financial Protection and Innovation. Grasska claimed that Elliman agents were incentivized to use Portfolio Escrow in their transactions through higher commissions and marketing spend increases, without disclosing those incentives to consumers.
Carrillo declined to comment to Inman. Grasska did not immediately respond to Inman’s request for comment.
Douglas Elliman also filed its own lawsuit against Grasska last week, alleging that the former Portfolio Escrow president was under investigation for kickbacks. The firm also claimed that Grasska had charged “expensive meals and lavish hotel stays” on a company credit card and created a 1031 exchange called Sienna Financial that violated his non-compete agreement with Douglas Elliman. The company said once it was discovered that Grasska had created the 1031 exchange, he was “immediately placed on leave pending further investigation for this and other misconduct.”
A representative from Douglas Elliman said that Grasska’s lawsuit was an attempt to distract from “his own egregious misconduct.”
“In Douglas Elliman’s complaint against him, we clearly set forth our claims that Grasska engaged in fraud, embezzlement of company funds, and related misconduct. Moreover, the broker referenced in our complaint as being involved in Grasska’s fraudulent scheme involving kickbacks is not the Altman Brothers or anyone on their team, and has never been affiliated with Douglas Elliman.”
That broker was described in Douglas Elliman’s lawsuit as a “high-profile Los Angeles real estate broker that is now a star of a reality television show.”
Matt and Heather Altman told Inman in a statement sent via text that they are often targets in these kinds of legal actions as high-profile brokers.
“This happens often as we are both at the top of the real estate game and on TV,” the statement said. “People like Bill and Christi use our name and throw it around to catch attention to themselves and their lawsuit that we are not even involved in. We are used to it. Unfortunately, outlets like The Real Deal use our names as clickbait. It’s already been proven. We have nothing to do with any of this and it’s just desperate people looking for attention. The Altman Brothers are not named in either lawsuit.”
The brokerage also alleged that it had discovered that Grasska created fake invoices for services never provided at Portfolio Escrow with the help of a company accountant as a workaround from paying off penalties from the IRS he had incurred by “carelessly” running his own personal transaction through Portfolio.
“This scheme was designed to illegally obtain money belonging to Portfolio to pay off penalties assessed by the IRS,” Douglas Elliman’s complaint alleges. The brokerage also alleges that Grasska worked with a “real estate broker that is now a star of a reality television show” to give the broker kickbacks in return for business. Douglas Elliman is alleging that Grasska is guilty of breach of contract, civil embezzlement, fraud and negligence.
In the last few weeks, long-time company CEO Howard Lorber and brokerage president and CEO Scott Durkin both left Douglas Elliman. Lorber’s departure was framed as a retirement, while Durkin’s termination came to light through one of the company’s SEC filings.
However, The Wall Street Journal reported that Lorber had been pressured to leave amidst a larger investigation into the company’s workplace culture, largely spurred by high-profile sexual assault allegations against two former long-time top agents, Tal and Oren Alexander.
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