Details of the Accusation
NBC reports that Shray Goel, a 35-year-old resident of Miami, and Shaunik Raheja, 34, from Denver, are accused of running a sophisticated fraud scheme.
Source: Naomi Hébert/Unsplash
According to a statement from the U.S. Attorney’s Office for the Central District of California, the accused reportedly engaged in what is described as a “double-booking, bait-and-switch scam” that involved over 10,000 reservations across 10 states in the US.
Charges and Allegations
Prosecutors revealed both Goel and Raheja face charges of conspiracy to commit wire fraud and 13 counts of wire fraud. Additionally, Goel is charged with two counts of aggravated identity theft.
Source: Tom Rumble/Unsplash
According to prosecutors, their operation was large-scale, with the two men and their employees managing around 100 properties across the country by 2019.
Financial Aspects of the Scheme
According to the statement from the U.S. Attorney’s Office for the Central District of California, the scam brought in about $7 million from roughly 10,000 Airbnb reservations and an additional $1.5 million through Vrbo reservations.
Source: cottonrbro studio/Pexels
The business used multiple names, one of which was Abbot Pacific LLC, according to prosecutors.
The Strategy of the Scam
According to the U.S. Attorney’s Office, Goel and Raheja executed their scam by creating multiple listings for the same property, leading to double bookings.
Source: Zac Gudakov/Unsplash
They would then invent excuses, often citing plumbing issues, to either cancel overbooked guests or encourage them to accept lower-quality replacement accommodations.
Allegations of Discrimination and Bidding Wars
The statement from the U.S. Attorney’s Office for the Central District of California details another aspect of the case that involves allegations of racial discrimination. According to the superseding indictment, the defendants decided whom to rent to based in part on racial prejudice, specifically avoiding “renting to guests they perceived to be Black.”
Source: cottonbro studio/Pexels
Moreover, the scam also involved a secret bidding war in which the defendants posted multiple listings for the same property at different prices, allowing the highest bidder to rent a property while canceling lower-paying guests.
Manipulation of the Feedback System
The statement from the U.S. Attorney’s Office for the Central District of California also alleges that in some cases, Goel, Raheja, and their employees used fake addresses to create listings. These addresses were sometimes nonexistent or unaffiliated with their scheme.
Source: Frames For Your Heart/Unsplash
Additionally, the pair made efforts to combat negative reviews by falsely discrediting guests. The superseding indictment states that the pair would post fake negative reviews about guests who had attempted to call out the scam. The duo would then remove any listings with negative feedback and re-list the properties under new identifiers, effectively erasing any bad feedback to maintain their deceptive operation.
Legal Proceedings and Arrests
NBC reports that Shray Goel was arrested on Dec. 27 in Florida, according to a spokesperson for prosecutors in the Central District of California. However, Shaunik Raheja has not yet been apprehended.
Source: Matt Popovich/Unsplash
Both defendants are expected to face arraignment in federal court in Los Angeles, marking the next step in this ongoing legal case.
Prosecutor's Statement on the Case
U.S. Attorney Martin Estrada commented on the case, emphasizing the gravity of the situation. “This deplorable scheme victimized thousands of consumers and families across the country, some of whom allegedly were discriminated against because of racial bias,” Estrada said.
Source: Paul Kapischka/Unsplash
Estrada also highlighted the distress caused to people who were left scrambling for accommodations due to the alleged actions of the defendants.
Defense's Stance on the Allegations
In response to these charges, Michael Freedman, the attorney representing Goel, issued a statement: “My client fully denies these allegations and looks forward to defending against them in court.”
Source: EKATERINA BOLOVTSOVA/Pexels
Despite this denial, Special Agent in Charge Ryan Korner of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG) said in a statement: “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.”
Airbnb's Response to the Incident
Following the revelation of these allegations, an Airbnb spokesperson told People, “Airbnb is built on trust, and bad actors have no place in our community.”
Source: Filios Sazeides/Unsplash
The spokesperson also highlighted the steps Airbnb is taking to prevent such deceptive behavior, saying, “We have taken multiple steps to strengthen our defenses against deceptive behavior, including measures like identity and listing verification which we believe will help further deter already rare instances of this type of activity.”
The Scope of the Case
The charges against Goel and Raheja, which carry a maximum of 20 years in federal prison for conspiracy and wire fraud, demonstrate the severity of the allegations.
Source: Oleksandr P/Pexels
The outcome of this case could have far-reaching consequences, not only for the accused but also for the many families and individuals affected by the alleged scam. The legal process continues to unfold, with the arraignment of the defendants expected in the coming weeks.