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Airbnb, Vrbo scam duo made $8.5M in double bookings, court alleges

Two men face fraud charges after allegedly double-booking nearly 100 properties in a scheme that made them more than $8.5 mililon.
Airbnb, Vrbo scam duo made $8.5M in double bookings, court alleges
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Two men have been indicted for running a Vrbo and Airbnb double-booking scheme that brought in more than $8.5 million from hopeful renters in 10 different states, federal prosecutors said Thursday.

The masterminds behind the scam, Shray Goel and Shaunik Raheja, are accused of using the short-term rental business they owned and operated under various names to carry out the "double-booking, bait-and-switch scam," which affected more than 10,000 reservations.

This scam, the indictment alleges, took place from Jan. 2018 to Nov. 2019 and involved nearly 100 properties their rental business' team managed across the U.S., from Los Angeles and Chicago to Nashville and Dallas. 

During that time, the team allegedly used fake host names and even other people's identities to list the properties multiple times on both Airbnb and Vrbo, allowing for each to be overbooked even after complaints and cancellations led some of their fake accounts to be banned. 

To choose which renters got to stay in a multiple booking, the indictment alleges the same property would be posted at different prices, and the team would allow the highest bidder to keep the reservation if it were overbooked. They would then last-minute cancel the lower-paying guest using "bogus" excuses or move them to "inferior replacement accommodation," which the indictment alleges often were their less popular listings.

SEE MORE: Airbnb 'tenant from hell' vacates after living rent-free for 575 days

Further, the indictment also accuses Goel and Raheja of using race as a factor in choosing who got to stay at the double-booked property, often avoiding "renting to guests they perceived to be Black," it states.

Guests who complained about Goel and Raheja's rental dealings or canceled their reservations "under false pretenses" — including the promise of a full refund — were denied the funds, according to Goel's arrest warrant. It alleges Goel was able to avoid paying the fees after he gave the rental platforms false information about whether a guest actually stayed.

Other renters who posted negative reviews or complained to the rental companies would prompt Goel and Raheja's team to remove and relist properties to avoid action by Airbnb and Vrbo.

In the end, authorities allege they made more than $7 million from Airbnb payouts and more than $1.5 million from Vrbo payouts. Both rental companies are now cooperating with federal investigators in the case, the Department of Justice said. 

Goel and Raheja both face charges of conspiracy to commit wire fraud and 13 counts of wire fraud, each carrying a maximum penalty of 20 years in federal prison. Goel also faces two counts of aggravated identity theft charges, which carries a two-year mandatory consecutive sentence.

Both men are expected to be arraigned in Los Angeles in the coming weeks.


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