Bait-And-Switch Scheme on Popular Rental Platforms Revealed
By Dolores Quintana
Two men have been indicted on federal fraud charges, accused of running a double-booking, bait-and-switch scam through popular online property rental platforms, primarily Airbnb. The Justice Department revealed today that the scam, which involved misleading listings and fraudulently canceling reservations, brought in more than $8.5 million, including instances of discrimination against Black individuals.
Shray Goel, 35, of Miami, and Shaunik Raheja, 34, of Denver, face charges related to fraud in connection with over 10,000 reservations tied to nearly 100 properties across 10 states. The superseding indictment accuses them of owning and operating a short-term property rental business, defrauding Airbnb, Vrbo, and guests renting properties through these platforms.
Goel, initially charged on December 13, was arrested in Florida on December 27 and released on bond the next day. Raheja was added as a defendant in the superseding indictment, and both are expected to be arraigned in the United States District Court in Los Angeles in the coming weeks.
The indictment alleges that the defendants used various names, including Abbot Pacific LLC, to carry out the fraudulent scheme. They owned and leased properties across the United States, managing nearly 100 properties by 2019.
To execute the scheme, Goel and Raheja allegedly double-booked properties through multiple listings on Airbnb and Vrbo, creating last-minute excuses, such as plumbing problems, to cancel overbooked guests or deceive them into moving to inferior accommodations. The indictment also claims they profited from a secret bidding war for properties, posting multiple listings at different prices and canceling or switching lower-paying guests to different properties.
The superseding indictment further alleges racial prejudices and discrimination in deciding which guests to keep or cancel. The defendants purportedly avoided renting to guests they perceived as Black.
“This deplorable scheme victimized thousands of consumers and families across the country, some of whom allegedly were discriminated against because of racial bias,” said United States Attorney Martin Estrada.
The defendants face charges of conspiracy to commit wire fraud, wire fraud, and aggravated identity theft. Each wire fraud charge carries a maximum penalty of 20 years in federal prison, with an additional two-year mandatory sentence for the aggravated identity theft counts.
The FBI and FDIC-OIG are leading the investigation, with assistance from the Federal Housing Finance Agency – Office of Inspector General. Airbnb and Vrbo are cooperating with the government in the ongoing investigation.
