Nationwide Airbnb, Vrbo scam; Milwaukee among cities impacted, DOJ says
(Photo Illustration by Mateusz Slodkowski/SOPA Images/LightRocket via Getty Images)
LOS ANGELES - Two men are federally charged in an alleged scam run through online property rental platforms – primarily Airbnb – that played out in Milwaukee and a dozen other cities nationwide, the U.S. Department of Justice announced Thursday.
The nationwide double-booking, bait-and-switch scam brought in more than $8.5 million through misleading listings and fraudulently canceling reservations. The scam also included discrimination against Black people, according to the DOJ.
The DOJ said 35-year-old Shray Goel of Miami and 34-year-old Shaunik Raheja of Denver were charged in a superseding indictment that accuses them of fraud in connection with more than 10,000 reservations linked to nearly 100 properties across 10 states. It alleges they owned and operated a short-term property rental business that they used to defraud Airbnb, Vrbo and guests renting properties through those platforms.
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Goel, Raheja and others who worked with them are alleged to have owned and leased properties throughout the U.S. for the rental business, the DOJ said. That included properties in:
- Milwaukee
- Chicago
- Los Angeles
- Malibu, California
- Marina Del Rey, California
- Davenport, Florida
- Savannah, Georgia
- Bloomington, Indiana
- South Bend, Indiana
- Cleveland
- Nashville, Tennessee
- Austin, Texas
- Dallas
To carry out the fraudulent scheme, the DOJ said Goel and Raheja allegedly double-booked properties through multiple listings of the same property on Airbnb and Vrbo, and then invented bogus last-minute excuses – often claiming plumbing problems – to cancel overbooked guests or trick them into moving to inferior replacement accommodations.
According to the superseding indictment, members of the conspiracy profited from the scheme by running a secret bidding war for the properties – meaning they posted multiple listings for the same property at different prices for the same night, allowed the highest bidder to rent a particular property, and then canceled or switched the lower-paying guests to a different property in the area.
The superseding indictment further alleges that "Goel and Raheja made decisions about which guests to keep and which to cancel based in part on their racial prejudices and discrimination." The defendants, according to the indictment, tried to avoid renting to guests they perceived to be Black.
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The superseding indictment charges Goel and Raheja with conspiracy to commit wire fraud and 13 counts of wire fraud. Goel is additionally charged with two counts of aggravated identity theft. The conspiracy and wire fraud charges each carry a statutory maximum penalty of 20 years in federal prison. There is a two-year mandatory consecutive sentence for the aggravated identity theft counts.
Both Airbnb and Vrbo are cooperating with the government in this investigation, the DOJ said.
Additional details of the alleged scam are available on the DOJ's website.