Denver man indicted for federal fraud charges in $8.5 million vacation rental scam on Airbnb, Vrbo
A Denver man found himself indicted on federal fraud charges in an $8.5 million vacation rental scam on Airbnb and Vrbo that not only allegedly defrauded thousands, but also racially discriminated against guests, in 10 states over several years.
Shaunik Raheja, 34, was indicted by a federal grand jury on Thursday, alongside Miami resident Shray Goel, 35, on claims that the pair ran “a double-booking, bait-and-switch scam” through online marketplaces Airbnb and Vrbo. Deceptive vacation rental listings and phony cancellations involving more than 10,000 reservations and almost 100 properties resulted in the partners reaping more than $8.5 million in profit, according to an announcement by the Justice Department.
That money broke down as more than $7 million from Airbnb bookings and more than $1.5 million from “additional and sometimes conflicting reservations through Vrbo” across 2018 and 2019, the indictment reports.
“Fueled by greed, the defendants deceived consumers about the locations and conditions of properties, canceled reservations to double-book properties and based on racial prejudices, and lied to victims leaving them scrambling to find last-minute replacement accommodations,” said U.S. Attorney Martin Estrada in a statement. “The sheer number of victims is astonishing, as is the millions of dollars earned through the scheme that took advantage of the reputations of online rental platforms that offer a valuable service.”
According to allegations within the indictment, Goel and Raheja served as owners and operators of a short-term property rental business that went by Abbot Pacific LLC and other names, leasing locations in Denver; Chicago; Milwaukee; Cleveland; Nashville, Tenn.; Savannah, Ga.; Davenport, Fla.; two Indiana cities; two Texas cities and three California cities.
It claims that they double-booked rentals by posting several listings of a single property on different platforms, then using phony excuses like plumbing issues to cancel guests or switch them to “inferior replacement accommodations.” The alleged scammers would make money by letting the highest-bidding guest rent a certain property, then either cancel or move other guests who reserved through lower-priced listings for that location — and sometimes relied on renters’ apparent skin tone to make those decisions.
The pair and their accomplices would allegedly conceal their identities with false names or participate in identity theft to serve as hosts for properties. Sometimes, they would also use bogus street addresses, the indictment reports.
In 2015, they were banned from Vrbo for “repeated host cancellations and guest complaints,” but used bogus accounts to get around that restriction. They’d allegedly turn to these same accounts to write fictitious, good reviews about their listings and disparage truthful, bad reviews from actual renters.
Goel and Raheja would also withhold money from guests who qualified for refunds, according to the indictment.
“The defendants are charged with preying on unsuspecting travelers and robbing them of time and money, leaving them with no choice but to settle for inferior lodging at the last minute,” said Donald Alway, assistant director in charge of the Federal Bureau of Investigation’s Los Angeles field office, in a statement. “The conspiracy charge alleging that the defendants discriminated against potential renters based on their skin color is a reprehensible abuse which must not be tolerated in the United States.”
Airbnb removed accounts tied to the defendants in 2019. A spokesperson called instances of fraudulent behavior “already rare.”
Among its efforts to combat similar situations, it’s invested in AI and machine learning defenses to better catch suspicious activity and identity verification and listing verification in five countries, with badges that will begin appearing in February.
“Airbnb is built on trust, and bad actors have no place in our community,” the spokesperson added.
Raheja and Goel were charged Wednesday in the indictment, which also claims discrimination against Black renters. Last month, Goel was solely charged in an indictment, which resulted in his arrest in Florida and subsequent release on bond.
With both included on the superseding indictment, they’ll now likely attend an arraignment hearing in the U.S. District Court in Los Angeles “in the coming weeks,” the U.S. Attorney’s Office of the Central District of California reports. The pair are charged with conspiracy to commit wire fraud and 13 counts of wire fraud, which each could result in a statutory maximum penalty of 20 years in federal prison.
Goel is also charged with two counts of aggravated identity theft, which carries a two-year mandatory consecutive sentence, according to the U.S. Attorney’s Office in California.
Both the FBI and the Federal Deposit Insurance Corporation – Office of Inspector General are taking the lead on the investigation, with an assist from the Federal Housing Finance Agency – Office of Inspector General.
Airbnb and Vrbo didn’t immediately respond to a request for further comment.
A Denver man found himself indicted on federal fraud charges in an $8.5 million vacation rental scam on Airbnb and Vrbo that not only allegedly defrauded thousands, but also racially discriminated against guests, in 10 states over several years.
Shaunik Raheja, 34, was indicted by a federal grand jury on Thursday, alongside Miami resident Shray Goel, 35, on claims that the pair ran “a double-booking, bait-and-switch scam” through online marketplaces Airbnb and Vrbo. Deceptive vacation rental listings and phony cancellations involving more than 10,000 reservations and almost 100 properties resulted in the partners reaping more than $8.5 million in profit, according to an announcement by the Justice Department.
That money broke down as more than $7 million from Airbnb bookings and more than $1.5 million from “additional and sometimes conflicting reservations through Vrbo” across 2018 and 2019, the indictment reports.
“Fueled by greed, the defendants deceived consumers about the locations and conditions of properties, canceled reservations to double-book properties and based on racial prejudices, and lied to victims leaving them scrambling to find last-minute replacement accommodations,” said U.S. Attorney Martin Estrada in a statement. “The sheer number of victims is astonishing, as is the millions of dollars earned through the scheme that took advantage of the reputations of online rental platforms that offer a valuable service.”
According to allegations within the indictment, Goel and Raheja served as owners and operators of a short-term property rental business that went by Abbot Pacific LLC and other names, leasing locations in Denver; Chicago; Milwaukee; Cleveland; Nashville, Tenn.; Savannah, Ga.; Davenport, Fla.; two Indiana cities; two Texas cities and three California cities.
It claims that they double-booked rentals by posting several listings of a single property on different platforms, then using phony excuses like plumbing issues to cancel guests or switch them to “inferior replacement accommodations.” The alleged scammers would make money by letting the highest-bidding guest rent a certain property, then either cancel or move other guests who reserved through lower-priced listings for that location — and sometimes relied on renters’ apparent skin tone to make those decisions.
The pair and their accomplices would allegedly conceal their identities with false names or participate in identity theft to serve as hosts for properties. Sometimes, they would also use bogus street addresses, the indictment reports.
In 2015, they were banned from Vrbo for “repeated host cancellations and guest complaints,” but used bogus accounts to get around that restriction. They’d allegedly turn to these same accounts to write fictitious, good reviews about their listings and disparage truthful, bad reviews from actual renters.
Goel and Raheja would also withhold money from guests who qualified for refunds, according to the indictment.
“The defendants are charged with preying on unsuspecting travelers and robbing them of time and money, leaving them with no choice but to settle for inferior lodging at the last minute,” said Donald Alway, assistant director in charge of the Federal Bureau of Investigation’s Los Angeles field office, in a statement. “The conspiracy charge alleging that the defendants discriminated against potential renters based on their skin color is a reprehensible abuse which must not be tolerated in the United States.”
Airbnb removed accounts tied to the defendants in 2019. A spokesperson called instances of fraudulent behavior “already rare.”
Among its efforts to combat similar situations, it’s invested in AI and machine learning defenses to better catch suspicious activity and identity verification and listing verification in five countries, with badges that will begin appearing in February.
“Airbnb is built on trust, and bad actors have no place in our community,” the spokesperson added.
Raheja and Goel were charged Wednesday in the indictment, which also claims discrimination against Black renters. Last month, Goel was solely charged in an indictment, which resulted in his arrest in Florida and subsequent release on bond.
With both included on the superseding indictment, they’ll now likely attend an arraignment hearing in the U.S. District Court in Los Angeles “in the coming weeks,” the U.S. Attorney’s Office of the Central District of California reports. The pair are charged with conspiracy to commit wire fraud and 13 counts of wire fraud, which each could result in a statutory maximum penalty of 20 years in federal prison.
Goel is also charged with two counts of aggravated identity theft, which carries a two-year mandatory consecutive sentence, according to the U.S. Attorney’s Office in California.
Both the FBI and the Federal Deposit Insurance Corporation – Office of Inspector General are taking the lead on the investigation, with an assist from the Federal Housing Finance Agency – Office of Inspector General.
Airbnb and Vrbo didn’t immediately respond to a request for further comment.
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