An organization referred to as Aika says it paid $10 million in kickbacks to the SERHANT. president whereas he was nonetheless at Keller Williams. However Group contends the story is a part of Aika’s effort to get out of paying its payments.
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A authorized battle between corporations that when labored on a Keller Williams tech platform boiled over this month, with one of many companies accusing business veteran Josh Group of pocketing tens of millions in unlawful “kickbacks” whereas serving because the brokerage’s chief innovation provide — costs his legal professionals deny in court docket filings.
The authorized feud started earlier this yr when an organization referred to as East Media Consulting (EMC) sued software program agency Aika. The swimsuit states the 2 companies agreed that EMC would refer purchasers to Aika, and that each corporations would subsequently share earnings from the ensuing enterprise. EMC sued in February claiming Aika diminished, then ultimately minimize off, the agreed-upon funds.
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The swimsuit flew underneath the radar till final month, when a counter declare Aika filed on Sept. 4 started circulating amongst actual property leaders. A number of Inman staffers independently acquired the counter declare in mid-September from a tipster.
Josh Group
The counter declare states that after becoming a member of Keller Williams in 2015, Josh Group was tasked with constructing a platform for the franchisor. He subsequently shaped EMC, whereas a former colleague from a earlier job shaped Aika.
Aika then obtained a contract to construct software program for Keller Williams, in response to the counter declare, however funneled a part of the cash it acquired again to Group through EMC. The counter declare goes on to argue that Aika was a respectable firm however states that Group “added zero value to this product” and that his function within the course of was merely to “protect” Aika’s contract with Keller Williams.
The counter declare states Keller Williams allegedly paid Aika greater than $38 million between 2015 and 2023. Aika says within the counter declare that greater than $10 million of that cash flowed again to Group within the type of “kickbacks.”
The last word aim of the counter declare is to have the court docket declare that the profit-sharing settlement between Aika and EMC was unlawful, which means the previous firm wouldn’t be on the hook to pay the latter.
Serving as president of Ryan Serhant’s eponymously named brokerage since earlier this yr, Group provided a special model of occasions. Final week, his representatives filed a movement to dismiss Aika’s request.
The movement argues that “rather than litigate the merits, Aika engaged in a gross abuse of the court system to bully a non-party into causing East Media to release meritorious claims against Aika.” The movement additionally characterizes Aika’s model of occasions as “false stories” meant to “create leverage.” And the movement claims amongst different issues that Aika “admitted its own allegations are false in response to discovery yet persists in sustaining them in its filings.”
That final remark is a reference to discovery within the case. Based on paperwork reviewed by Inman, throughout discovery Aika was requested if it admits that it “paid illegal kickbacks.” Aika’s response to the inquiry was “deny,” the paperwork present. Group’s movement to dismiss is referring to that change.
The movement to dismiss additionally claims that an lawyer representing Aika withdrew for “ethical reasons” after improperly “threatening criminal prosecution.” Inman reviewed that lawyer’s movement to withdraw from the case. It states that he stepped away after “professional considerations require termination of the representation, as certain ethical reasons including potential conflicts make further representation unfeasible.”
Inman reached out to that lawyer in September, however a consultant mentioned he was unable to remark as a result of “the attorney and client relationship would specifically prohibit any disclosure of sensitive information.”
In a press release to Inman this week, Group’s lawyer mentioned that “it’s unfortunate that a defendant can make unfounded allegations without evidence and then immediately retract them in court, yet still attract attention from media sources.”
“The fact that Defendant’s own attorney withdrew for ethical reasons speaks volumes,” the assertion provides. “We are confident in the legal process, and my response filed in Court speaks for itself.”
Keller Williams — which isn’t named as a celebration within the swimsuit — declined to touch upon the case.
Inman additionally reached out to Aika’s legal professionals. They declined to remark in mid-September, as an alternative suggesting that Inman study publicly filed papers. Inman then requested if they might level to publicly filed papers that “shed light on the relationship between the companies, or that document the movement of the money in question?” They responded that they might not.
Inman reached out once more on Oct. 1, at which era they reiterated their earlier response.
The case because it at the moment stands, then, consists of competing requests. Aika needs the court docket to say it doesn’t should pay EMC as a result of the settlement was unlawful. However Group’s legal professionals are asking the court docket to throw out that request — and in addition to take away Group himself from the proceedings. Initially, EMC was additionally asking for entry to Aika’s monetary books and for the cash it says it’s owed.
Which argument the court docket finds extra persuasive stays to be seen, and the subsequent listening to date within the case has not but been set.
Group labored at Keller Williams from 2015 to 2021. He joined the corporate as chief innovation officer and was promoted to president in 2019. He returned to actual property as president of SERHANT. in January.
Learn the counter declare right here (hit refresh if the doc doesn’t seem)
E-mail Jim Dalrymple II
