Tenants face 20 years in prison for fraud and discrimination.
In the United States, two men are accused of defrauding more than $8.5 million through the rental service Airbnb and other platforms. According to the indictment, 35-year-old Shrai Goel of Miami and 34-year-old Shaunik Raheya of Denver operated a short-term rental real estate business and used it to defraud customers.
According to the US Department of Justice, the fraudsters business operated under different names, one of them being Abbot Pacific LLC. By 2019, the criminals managed almost 100 properties in 10 US states and made money on 10,000 bookings.
Scammers have booked properties twice by posting multiple ads for the same property on Airbnb and Vrbo, and then at the last minute come up with made-up excuses (often citing plumbing problems) to cancel a guest's reservation or trick them into moving to a lower-quality accommodation.
The conspirators profited from their scheme by waging a secret war over real estate. They placed several ads for the same property at different prices per night, so that the user who offers the highest price can rent a property in the area. Reservations for other guests with lower fees have been transferred to another hotel in the area or cancelled.
This scheme allowed fraudsters to maintain the maximum capacity of real estate objects, since popular ads forced guests to book, and then at the last minute their excess was sent to other, less popular objects.
The accusation of racial discrimination is particularly troubling. According to the prosecution, Goel and Raheya made booking decisions based on their racial prejudices, in particular, trying to avoid black tenants, depriving them of the opportunity to use their reservations and causing them material damage when canceling their reservations.
U.S. attorney Martin Estrada condemned the defendants actions, emphasizing that their actions led to deception of consumers and the use of the reputation of respected online rental platforms. The Los Angeles FBI added that the defendants left travelers with no choice, forcing them at the last moment to look for other, worse-quality housing.
The defendants used fake host names and addresses, and manipulated user reviews to hide negative comments and attract new customers. According to the investigation, in 2018 and 2019, they received more than $7 million. from bookings via Airbnb and an additional $1.5 million via Vrbo.
Shraj Goel was arrested in Florida on December 27 and released on bail the following day. Shaunik Raheya was also added to the indictment. Both will appear in Federal District Court in Los Angeles in the coming weeks. They face up to 20 years in prison for each of the 13 fraud charges. Goel is additionally charged with two counts of aggravated identity theft, and faces 2 years in prison for each count.
In the United States, two men are accused of defrauding more than $8.5 million through the rental service Airbnb and other platforms. According to the indictment, 35-year-old Shrai Goel of Miami and 34-year-old Shaunik Raheya of Denver operated a short-term rental real estate business and used it to defraud customers.
According to the US Department of Justice, the fraudsters business operated under different names, one of them being Abbot Pacific LLC. By 2019, the criminals managed almost 100 properties in 10 US states and made money on 10,000 bookings.
Scammers have booked properties twice by posting multiple ads for the same property on Airbnb and Vrbo, and then at the last minute come up with made-up excuses (often citing plumbing problems) to cancel a guest's reservation or trick them into moving to a lower-quality accommodation.
The conspirators profited from their scheme by waging a secret war over real estate. They placed several ads for the same property at different prices per night, so that the user who offers the highest price can rent a property in the area. Reservations for other guests with lower fees have been transferred to another hotel in the area or cancelled.
This scheme allowed fraudsters to maintain the maximum capacity of real estate objects, since popular ads forced guests to book, and then at the last minute their excess was sent to other, less popular objects.
The accusation of racial discrimination is particularly troubling. According to the prosecution, Goel and Raheya made booking decisions based on their racial prejudices, in particular, trying to avoid black tenants, depriving them of the opportunity to use their reservations and causing them material damage when canceling their reservations.
U.S. attorney Martin Estrada condemned the defendants actions, emphasizing that their actions led to deception of consumers and the use of the reputation of respected online rental platforms. The Los Angeles FBI added that the defendants left travelers with no choice, forcing them at the last moment to look for other, worse-quality housing.
The defendants used fake host names and addresses, and manipulated user reviews to hide negative comments and attract new customers. According to the investigation, in 2018 and 2019, they received more than $7 million. from bookings via Airbnb and an additional $1.5 million via Vrbo.
Shraj Goel was arrested in Florida on December 27 and released on bail the following day. Shaunik Raheya was also added to the indictment. Both will appear in Federal District Court in Los Angeles in the coming weeks. They face up to 20 years in prison for each of the 13 fraud charges. Goel is additionally charged with two counts of aggravated identity theft, and faces 2 years in prison for each count.
