LOS ANGELES - Two men are facing federal fraud charges for an alleged double-booking, bait-and-switch scam that targeted online property rental platforms, primarily Airbnb, generating over $8.5 million through deceptive listings and fraudulent reservation cancelations.
The indictment, filed by a federal grand jury, accuses Goel and Raheja of fraudulently canceling more than 10,000 reservations linked to nearly 100 properties across 10 states. Faye Barnouw, a regional director with the Federal Trade Commission, described the operation as "a pretty big scam" that was "pretty well orchestrated."
The indictment accuses the defendants of operating a short-term property rental business, including properties in Los Angeles; Malibu; Marina del Rey; Denver; Chicago; Davenport, Florida; Savannah, Georgia; Bloomington, Indiana; South Bend, Indiana; Cleveland; Nashville, Tennessee; Austin, Texas; Dallas, and Milwaukee. The business operated under various names, including Abbot Pacific LLC.
According to the indictment, the duo double-booked properties on Airbnb and Vrbo, creating multiple listings for the same property and engaging in a secret bidding war. The scheme involved canceling or switching lower-paying guests to different properties at the last minute, often using false last-minute excuses like plumbing problems.
"What they're doing is seeking a bidding war between these prospective guests," said Steve McFarland a Los Angeles & Silicon Valley CEO with the Better Business Bureau. "Now, they'll take the highest bidder and then the losing bidder, if you will, they get placed into some subpar properties nearby."
The indictment alleges that the defendants made decisions about which guests to keep based partly on racial prejudices and discrimination, discriminating against potential renters they perceived to be Black. Barnouw noted in the original article, "There were some fake properties where the addresses don't even exist."
United States Attorney Martin Estrada condemned the scheme, noting its impact on thousands of consumers and families, some allegedly discriminated against due to racial bias. Donald Alway, the FBI's Assistant Director in Charge, labeled the defendants' actions as preying on unsuspecting travelers and emphasized the reprehensible nature of racial discrimination in the vacation rental industry.
In a statement to FOX 11, Airbnb said its platform is "built on trust, and bad actors have no place in our community. We supported the US Attorney’s Office and the FBI throughout their investigation to help ensure accountability, and we are thankful to them for their work."
The charges include conspiracy to commit wire fraud and 13 counts of wire fraud, with Goel facing additional charges of aggravated identity theft. If convicted, the defendants could face up to 20 years in federal prison for conspiracy and wire fraud, with a mandatory two-year consecutive sentence for aggravated identity theft.
Airbnb reported that Goel has been removed from their platform. Goel, arrested on December 27 and released on bond, is expected to be arraigned in the coming weeks. Raheja, added as a defendant in the superseding indictment, will also be arraigned in United States District Court in Los Angeles.
The Federal Trade Commission says if you’re concerned that you’ve been a victim of fraud, you can reach out to them at 1-877-FTC-HELP (382-4357), or go to ftc.gov and go to their "report fraud" portal.