Two cousins have admitted to federal crimes tied to a nationwide rental scheme that netted up to $8.5 million and relied on deceptive listings, double bookings, and last-minute cancellations, according to federal prosecutors.
The two men, Shray Goel, 37, of Calabasas and his cousin, Shaunik Raheja, 36, of Denver, primarily targeted rental guests perceived to be Black for cancellations, according to the federal superseding indictment, although they did not plead guilty to that allegation. The short-term rental strategy was launched in 2013 and involved an online business to list properties on digital platforms, which reportedly included Vrbo and Airbnb.
“Airbnb is built on trust, and bad actors have no place in our community. We supported the US Attorney’s Office and the FBI throughout their investigation to help ensure those responsible are held accountable, and we are thankful for their work. We have taken multiple steps to strengthen our defenses to help make rare issues like this even rarer,” an Airbnb spokesperson said.
Vrbo did not immediately respond to a request for comment.
The business created by Goel and Raheja operated under various names, including Abbot Pacific LLC and Jet Set Work LLC, according to prosecutors. Properties included listings across Southern California and cities including Chicago, Dallas, Denver and Nashville.
Goel pleaded guilty to wire fraud and Rahej pleaded guilty to obstruction of justice, according to the U.S. Attorney’s Office for the Central District of California.
From October 2017 to November 2019 the defendants used fake host names and other people’s identities to list properties, according to prosecutors. In some cases they listed properties using false or nonexistent addresses and posted fabricated reviews to make listings appear more legitimate.
The defendants allegedly used a mix of properties they owned and others they leased and listed on platforms such as Airbnb and Vrbo, according to the indictment.
The operation centered on a “double-booking, bait-and-switch” strategy, according to prosecutors.
By listing the same property multiple times with varying prices across multiple platforms, they were able to choose the most profitable reservation while canceling others, according to the plea agreements. Guests whose reservations were canceled were given false explanations such as plumbing or maintenance problems, or were sent to alternate rental locations.
After guest complaints and cancellations prompted one rental platform to ban them, the defendants used fake accounts to maintain their operations, according to their plea agreements. They also took measures to minimize negative feedback, such as re-posting property listings under new identities.
Raheja admitted to making false statements to federal agents in 2023, including denying that the overbooking practices were intentional, according to the plea agreement.
In the indictment, prosecutors alleged the scheme was large in scale, involving more than 10,000 reservations and generating more than $8.5 million in revenue.
The indictment also alleged that the defendants engaged in discriminatory practices based on racial bias when deciding what reservations to honor and cancel. Specifically the indictment alleged that guests perceived to be Black were disproportionately targeted for cancellation.
Both defendants did not plead guilty to the large in scale or discriminatory allegations made in the indictment.
Goel faces a maximum sentence of 20 years in federal prison, while Raheja faces up to 10 years, according to the plea agreements.
U.S. District Judge Welsey L. Hsu is scheduled to sentence Goel on August 14 and Raheja on September 11.
The post Two cousins admit to a double-booking rental scam to steal $8.5 million and disrupt travel nationwide appeared first on Los Angeles Times.
