Denver man indicted in alleged $8.5M short-term rental property scam – FOX 31 Denver

4 minutes, 30 seconds Read

DENVER (KDVR) — A California federal grand jury has indicted two men, including one from Denver, in a superseding indictment accusing them of fraud connected to over 10,000 reservations linked to nearly 100 rental properties across 10 states.

Shaunik Raheja, 34, of Denver, and Shray Goel, 35, of Miami were indicted Thursday on federal fraud charges that allege a “double-booking, bait-and-switch scam run through online property rental platforms,” primarily Airbnb, that brought in more than $8.5 million through “misleading listings and fraudulently canceling reservations, which included discrimination against Black people,” according to the Justice Department’s announcement.

Goel was initially indicted and charged on Dec. 13, 2023, and arrested in Florida on Dec. 27, 2023. He was released on bond on Dec. 28.

Raheja was added as a defendant in the superseding indictment that followed the Dec. 13 indictment. Both defendants are scheduled to be arraigned in U.S. District Court in Los Angeles in the coming weeks.

The superseding indictment charges Goel and Raheja with conspiracy to commit wire fraud and 13 counts of wire fraud. Goel also faces two counts of aggravated identity theft.

The FBI and FDIC-OIG are investigating this matter. The Federal Housing Finance Agency – Office of Inspector General is assisting in the investigation, and Airbnb and Vrbo are cooperating with the investigation.

Goel, Raheja and others who worked with them allegedly owned and leased properties throughout the U.S. for the rental business, including properties in Denver; Los Angeles; Malibu, California; Marina Del Rey, California; Chicago; Davenport, Florida; Savannah, Georgia; Bloomington, Indiana; South Bend, Indiana; Cleveland; Nashville, Tennessee; Austin, Texas; Dallas and Milwaukee.

By 2019, according to court documents, they were managing nearly 100 properties across the United States.

Double-booking properties for ‘bidding war’

In their alleged scheme, Goel and Raheja double-booked properties through multiple listings of the same property, then invented fake, last-minute excuses, such as plumbing problems, to cancel overbooked guests or trick them into agreeing to “inferior” replacement accommodations.

Members of the scheme appear to have benefitted financially by running a secret bidding war for the properties.

This means they allegedly posted multiple listings for the same property at different prices for the same night and then allowed the “highest bidder” to rent the particular property while canceling or switching lower-paying guests to different properties in the area.

According to the U.S. Attorney’s Office of the Central District of California, Goel and Raheja were able to keep all their properties in any given area at maximum capacity using popular listings “as bait to trick guests into booking those listings, and then steering overbooked guests at the last minute to less popular and open listings.”

“Goel and Raheja made decisions about which guests to keep and which to cancel based in part on their racial prejudices and discrimination,” the superseding indictment states.

They then allegedly tried to avoid renting to guests they perceived to be Black and “in this way depriv[ed] these guests of their property interest in the reservations and otherwise caus[ed] these guests to suffer monetary losses when their reservations were canceled,” according to the court document.

“This indictment charges defendants for their alleged roles in a scheme to defraud Airbnb, Vrbo, and guests renting properties through those platforms,” Special Agent in Charge Ryan Korner of the Federal Deposit Insurance Corporation said in a release. “FDIC-OIG remains steadfastly committed to protecting our nation and innocent victims by identifying and bringing to justice individuals who orchestrate these types of fraudulent schemes.”

Documents allege false accounts, reviews

The court documents also allege that the schemers used fake host names and other people’s identities in some instances to list properties. They concealed their identities, double-booked properties, and posted fake positive reviews of their properties, the indictment alleges.

Additionally, they allegedly continued to use Vrbo with fake host accounts after being banned from the platform in 2015 because of repeated host cancellations and guest complaints.

In the announcement of the federal superseding indictment, the U.S. Attorney’s Office alleges that Goel and Raheja took steps to stop negative reviews from affecting their business by discrediting the reviews and trying to hide them from prospective future guests.

Additionally, the indictment states they would post “bogus negative reviews about the guests who had panned their listings or called out the fraudulent and deceptive listing practices, and they would remove negatively reviewed listings and then re-list the properties using new listing identifiers, thereby purging the bad reviews from the properties.”

“In 2018 and 2019, in the course of the scheme and in furtherance of it, defendants Goel and Raheja and others working with them and at their direction booked more than 10,000 reservations through Airbnb, receiving more than $7 million in payouts on those reservations; they booked additional and sometimes conflicting reservations through Vrbo and received more than $1.5 million in additional payouts from those reservations,” according to the indictment.

The indictment also says that Goel and Raheja misrepresented the situation to trick guests into booking properties they would not have otherwise booked and to keep payments from guests entitled to refunds.

“The last-minute nature of the cancellations also caused guests and the rental platforms to suffer losses when guests were forced to find alternative lodging at the last minute,” the indictment announcement said.

This post was originally published on this site

Similar Posts