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New York

Turmoil at Corcoran Global: CEO accused of fraud

3 lawsuits allege mismanagement, delays in commission payments

Corcoran Global Living's Michael Mahon (Corcoran, Getty)
Corcoran Global Living's Michael Mahon (Corcoran, Getty)

Several agents at Corcoran Global Living have accused CEO Michael Mahon of fraud, breach of contract and holding up hundreds of thousands of dollars in commissions amid tumult at the franchise.

The delays began in April, agents at Corcoran’s largest franchise told Inman, and join three lawsuits filed this year in detailing a fraught financial situation under Mahon’s tenure as chief executive.

In September, Jesse Rodriguez and other brokers with franchise contracts with Mahon filed a suit against the chief executive. The brokers alleged fraud and breach of contract, including falsely depicting the company’s financial situation, commingling funds for Southern and Northern California offices and diverting money to himself and his associates.

One person reached by Inman repeated claims listed in the suit that the franchise’s corporate offices appeared to fail to pay utilities and rent at some regional offices, leading the lights to be shut off.

The franchise’s chief operating officer chalked up agent pay issues to market conditions and claimed its finance team was working to resolve issues. Corcoran didn’t respond to Inman’s request for comment, pointing out its affiliate was independently operated and owned.

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Mahon himself sued Corcoran through an LLC in June, claiming the parent company provided faulty transaction reporting technology that cost the affiliate hundreds of thousands of dollars. Corcoran countersued, saying the lawsuit was a “smokescreen” to distract from fraud committed by Mahon and his companies.

The report comes after an internal senior executive told The Real Deal Corcoran was shopping the franchise less than three years after its formation and off of two years of aggressive growth. The parent company is open to executing a direct deal if an outside buyer can’t be found.

The franchise formed in February 2020 when Zephyr Real Estate, a San Francisco firm, combined with Nevada-based Oliver Luxury Real Estate. It started expanding shortly thereafter, purchasing a handful of firms in the succeeding months. Corcoran Global’s headcount jumped from 450 at inception to more than 1,000 brokers.

The affiliate, recently plagued by rumors it was on the verge of going out of business, counted 80 offices in April, up from an initial 13.

— Holden Walter-Warner

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