Two cousins are expected to plead guilty Tuesday in downtown Los Angeles to federal charges alleging they ripped off unsuspecting travelers in a $1.5 million short-term rental scam involving Southern California properties used to defraud customers of Airbnb and similar platforms.
Shray Goel, 37, of Miami, and Shaunik Raheja, 36, of Denver, allegedly ran the double-booking, bait-and-switch scheme, which prosecutors say included discrimination against Black people.
Goel, Raheja and others who worked with them are alleged to have owned and leased nearly 100 properties throughout the United States, including properties in Malibu, Venice Beach, Marina del Rey and San Diego.
To carry out the scheme, the defendants double-booked properties through multiple listings of the same home on Airbnb and Vrbo, and then invented bogus last-minute excuses — often claiming plumbing problems — to cancel overbooked guests or trick them into moving to inferior replacement accommodations, according to the U.S. Department of Justice.
Goel has agreed to plead guilty Tuesday to one count of wire fraud in a so-called “package deal” with cousin and business partner Raheja, who is expected to enter a plea to a charge of obstruction of justice for allegedly lying to investigators.
According to the January 2024 indictment filed in Los Angeles federal court, members of the conspiracy profited by running a secret bidding war for the properties — meaning they posted multiple listings for the same property at different prices for the same night, allowed the highest bidder to rent a particular property, then canceled or switched the lower-paying guests to a different property in the area.
The scheme also allegedly allowed Goel, Raheja and accomplices to keep all of their properties in any given area at maximum capacity by using popular listings as bait to trick guests into booking those listings, then steering overbooked guests at the last minute to less popular and open listings in the same area, court papers show.
“Goel and Raheja made decisions about which guests to keep and which to cancel based in part on their racial prejudices and discrimination,” the superseding indictment alleges.
The defendants, according to the DOJ, tried to avoid renting to guests they perceived to be Black and in this way deprived them of their reservations and otherwise caused these guests to suffer monetary losses when their reservations were canceled, according to the indictment.
Prosecutors allege the defendants deceived consumers about the locations and conditions of properties, canceled reservations to double-book properties, and lied to victims leaving them scrambling to find last-minute replacement accommodations.
The DOJ said Goel, Raheja and others used fake host names and, in certain instances, other people’s identities to list properties. They allegedly used the fake host accounts to conceal their own identities, to double-book properties, and to post fabricated positive reviews of their properties. They were also allegedly using the fake host accounts to continue to list properties after they had been banned from Vrbo in 2015 because of repeated host cancellations and guest complaints.
To further the alleged fraud, the cousins allegedly took steps to prevent negative reviews from affecting their business by falsely discrediting such reviews and otherwise trying to hide them from prospective future guests. According to the updated indictment, the defendants posted bogus negative reviews about the guests who had panned their listings or called out the fraudulent and deceptive listing practices, and would remove negatively reviewed listings and then re-list the properties using new listing identifiers, thereby purging the bad reviews from the properties.
The wire fraud charge carries a possible sentence of up to 20 years in federal prison. The obstruction of justice count lodged against Raheja carries a possible sentence of up to 10 years.
Prosecutors said both Airbnb and Vrbo are cooperating with the government in the investigation.