Why RICO Suddenly Sounds Familiar

Zillow Class - Action Lawsuit / Atwood Group Real Estate

If you’re anything like me, the word RICO probably conjures up images of Tony Soprano venting to Dr. Melfi because he “isn’t getting any satisfaction” at work. Yes, that scene – where he clarifies to his therapist that RICO is a statute, not a cousin – is from the very first episode of The Sopranos. But RICO isn’t just TV fodder. It’s the Racketeer Influenced and Corrupt Organizations Act, a federal law passed in 1970 to eradicate organized crime; it makes it illegal to participate in a business’s affairs through a pattern of racketeering. RICO imposes serious criminal penalties and lets victims sue for treble damages.

Over the decades, this law – once called the government’s “ultimate hit man” against the Mafia – has been stretched far beyond mob families. Courts have applied it to everything from motorcycle clubs to corporate fraud, and its broad language allows plaintiffs to tie separate acts into an alleged pattern.

And as you’ll see, that’s exactly what some homebuyers and agents are now attempting in a case against one of the biggest names in online real estate.

What’s Happening With Zillow?

So what does a 1970s anti‑mob law have to do with a modern real‑estate website? Here’s the scoop: On Sept 19, 2025 a homebuyer named Alucard Taylor filed a class‑action lawsuit in the U.S. District Court for the Western District of Washington. He claims Zillow and several real‑estate brokers ran a deceptive scheme that steered buyers toward Zillow Home Loans. When the case – known as Taylor v. Zillow, Inc. – was amended on Nov 19, 2025, it added more defendants and, importantly, RICO claims.

Key allegations

Steering and hidden fees: Plaintiffs allege that when prospective buyers click “Contact Agent” or “Request Tour” on a Zillow listing, they are funneled to a Zillow Flex agent rather than to the property’s listing agent. Those consumers are then asked to sign a touring agreement that claims the agent’s services are free, but the complaint says Zillow collects about 40 % of the buyer’s agent commission as a referral fee. Plaintiffs claim the fee is hidden from buyers and sellers .

Pressure to use Zillow Home Loans: Witnesses told investigators that Flex agents must meet quotas for referring clients to Zillow Home Loans. Agents who fail to hit these targets risk losing access to leads. Zillow Managers allegedly travel to brokerage offices to deliver instructions verbally to avoid creating a paper trail.

Monitoring communications: The complaint alleges that Zillow requires agents to use its customer‑relationship management system “Follow‑Up Boss,” which allows the company to monitor calls and messages and flag agents who recommend other lenders .

Inexperienced agents promoted as top performers: Plaintiffs say some agents with little or no sales history are labeled “Top Agent” simply because they participate in the Flex program, misleading buyers .

Higher costs for consumers: By steering buyers to its own agents and loan officers and hiding referral fees, the plaintiffs argue Zillow inflates commissions and pushes borrowers into higher‑rate loans. Some homebuyers claim they paid more for their homes because they were unable to negotiate directly with the listing agent.

The complaint paints a picture of an enterprise designed to “monetize every step of the home‑buying process". Attorneys from Hagens Berman—who previously secured over $1 billion in settlements in real‑estate antitrust cases—are leading the case and say the alleged conduct violates both RICO and the Real Estate Settlement Procedures Act (RESPA). The amended filing includes plaintiffs from multiple states and names additional brokerage defendants. Plaintiffs seek damages up to $25,000 per class member and ask the court to treble the damages under RICO.

What is Zillow saying?

As of this writing, Zillow has not publicly responded to the amended RICO allegations. News outlets note that the company did not answer requests for comment, while industry analyses emphasize that the lawsuit’s allegations remain unproven. Under U.S. law, a complaint states allegations—not facts—and defendants will have an opportunity to respond and challenge the claims.

Comparing Real Estate to The Sopranos

I couldn’t help but chuckle at how surreal this all sounds. RICO in a housing lawsuit? It feels like HBO wrote the script. In The Sopranos, Tony and his crew constantly worry about the feds using RICO to bring down their family. There’s even an episode where the FBI bugs the Sopranos’ basement lamp to collect evidence. RICO was crafted to connect disparate criminal acts into a single case, so seeing it show up in a class action against a Fortune 500 company shows just how far its reach now extends .

Of course, the comparison only goes so far. Unlike Tony and his crew, Zillow isn’t facing criminal charges.This is a civil lawsuit. The plaintiffs must show that Zillow and its partners formed an “enterprise” and engaged in a “pattern of racketeering activity” that caused them harm . That’s a steep hill to climb: courts require detailed proof of ongoing criminal conduct for civil RICO claims .

Why This Matters

Even if the RICO claims ultimately fail, the amended lawsuit raises significant questions about transparency and fiduciary duties in online real‑estate transactions. Industry commentators note that buyers should always know who their agent represents, what incentives exist, and whether a lender recommendation is truly in the buyer’s best interest. Agents who rely on Zillow leads may need to examine how their obligations to clients align with contractual requirements set by lead‑generation platforms.

Moreover, the case sits against a backdrop of broader scrutiny of the U.S. real‑estate industry. The National Association of Realtors (NAR) recently settled separate lawsuits over broker commissions, leading to changes in how buyers’ and sellers’ agents are paid. The Taylor lawsuit—particularly its RICO component—extends that legal spotlight to referral‑fee structures and mortgage steering.

Takeaways

RICO is no longer just for mobsters. The statute, originally designed to bring down organized crime, now appears in civil litigation against companies like Zillow.

Allegations are not facts. The amended complaint against Zillow lays out serious accusations, but they remain unproven. Zillow and its co‑defendants will have a chance to respond and contest the claims.

Transparency matters. Homebuyers should ask who their agent represents, how referral fees work, and whether they are being steered toward particular services.

Fiduciary duties are paramount. Agents must put clients’ interests first, regardless of incentives from lead‑generation platforms.

I’ll be watching Taylor v. Zillow as it winds its way through the courts—it could take years. In the meantime, the fact that RICO shows up in a housing lawsuit reminds us that tools once reserved for fictional mob bosses can have very real implications for tech giants—and for the homebuyers who depend on them.

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Debbie Atwood- Realtor/Broker

Realty One Group

📞 425-750-4970

✉️ [email protected]

🌐 www.atwoodgrouprealestate.com

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