LOS ANGELES — Two men, including one who has lived in Denver, are facing charges for allegedly defrauding thousands of people nationwide by running a scam through Airbnb, Vrbo and other online property rental platforms, according to federal prosecutors.
Shray Goel, 35, of Miami, and Shaunik Raheja, 34, who prosecutors said lived in several places including Denver, were indicted by a federal grand jury in Los Angeles. Prosecutors said their scheme brought in more than $8.5 million through misleading listings and fraudulently canceled reservations, which included discrimination against Black people.
The fraud was connected to more than 10,000 reservations linked to nearly 100 properties across 10 states, prosecutors said. The alleged scheme started around October 2017 and continued through at least November 2019, according to the indictment.
The indictment alleges Goel and Raheja owned and operated a short-term property rental business that included properties in Los Angeles; Malibu, California; Marina Del Rey, California; Denver; Chicago; Davenport, Florida; Savannah, Georgia; Bloomington, Indiana; South Bend, Indiana; Cleveland; Nashville, Tennessee; Austin, Texas; Dallas and Milwaukee.
Two Denver properties — one in the Highland neighborhood and one in Five Points — are mentioned in the indictment. Online property records show Raheja was a previous owner of both properties.
Prosecutors allege Goel and Raheja double-booked properties by putting multiple listings of the same property on Airbnb and Vrbo, then inventing last-minute excuses to cancel overbooked guests or trick them into moving to inferior accommodations.
According to the indictment, members of the conspiracy profited by running a secret bidding war for the properties. Prosecutors say they posted multiple listings for the same property at different prices for the same night, allowed the highest bidder to rent it, and then canceled the reservations of the lower-paying guests or switched them to a different property.
The indictment also alleges that “Goel and Raheja made decisions about which guests to keep and which to cancel based in part on their racial prejudices and discrimination.” The suspects, according to prosecutors, tried to avoid renting to guests they perceived to be Black.
"The indictment makes clear we had a conspiracy to commit fraud, and one of the means by which that conspiracy was accomplished was by discrimination against renters who these individuals thought were Black," said U.S. Attorney Martin Estrada.
"We will not, as a Department of Justice, tolerate that sort of racial discrimination."
In statements from their attorneys, the suspects denied the allegations.
"My client disputes the government’s indictment and categorically denies the government’s false and inflammatory claims of racism," Raheja's attorney wrote. "We look forward to clearing his name in court.”
"Mr. Goel fully denies these allegations and looks forward to defending against them in court," Goel's attorney wrote.
According to the indictment, Goel, Raheja and their co-schemers used fake host names and other people’s identities to list properties. The indictment says they used the fake accounts to continue to list properties after they were banned from Vrbo in 2015 because of repeated host cancellations and guest complaints.
In some cases, according to the indictment, Goel, Raheja and their accomplices listed fake addresses, including addresses that did not have any rental housing, were unaffiliated with the schemers, or did not exist at all.
"Goel and Raheja used these and other lies and misrepresentations to trick guests into booking properties they would not have otherwise booked and to keep payments from guests entitled to refunds," prosecutors said in a news release. "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 fake addresses also allowed them to evade local rules and regulations governing short-term rentals, the indictment says.
Prosecutors said Goel and Raheja tried to prevent negative reviews from affecting their business by falsely discrediting the reviews and trying to hide them from prospective guests.
According to the indictment, the suspects are accused of submitting a false negative review against a guest of a property in Los Angeles after the guest left a review that said in part:
“DO NOT BOOK. . . . The most major issue was when EIGHT random men showed up on our last night there with the access codes to the gates, claiming they had ALSO booked the house for the night. Turns out there are MULTIPLE LISTINGS for this house on Airbnb, run by different hosts who are booking the place for multiple groups at a time. . . . Needless to say, it didn’t feel super safe after this happened.”
According to the indictment, a guest at the same property wrote a review that said in part:
“A unit we rented was posted twice by two different hosts with overlapping dates. When we arrived to the unit others were occupying the space we had a reservation for. . . Long story short, our party of 8 had to find another place to stay with less than two hours notice.”
Goel and Raheja are each charged with conspiracy to commit wire fraud and 13 counts of wire fraud. Goel is also charged with two counts of aggravated identity theft, prosecutors said.
Prosecutors said Airbnb and Vrbo are cooperating with the investigation.
The city of Denver requires short-term-rental properties to be licensed, among other rules. According to the city's Department of Excise and Licenses, there have been active licenses on both of those properties in recent years and no record of any disciplinary action. However, those licenses were filed under different names, not the defendants'.
While the indictment indicates the defendants worked with additional property owners, it's unclear if there are additional people involved in fraud or whether others were aware of the alleged crimes. On Thursday, a spokesperson for the Department of Justice said nobody else has been charged in the indictment, and offered no comment about any additional charges.
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