Two cousins have pleaded guilty to federal crimes related to a nationwide rental scheme that raked in up to $8.5 million and depended on misleading listings, double bookings and last-minute cancellations, according to federal prosecutors.
According to a federal superseding indictment, Shrey Goyal, 37, of Calabasas, and his cousin, Shaunique Raheja, 36, of Denver, the two men primarily targeted guests they believed to be black to cancel rental accommodations, though they pleaded not guilty to that charge. The short-term rental strategy was launched in 2013 and consisted of an online business to list properties on digital platforms, which reportedly included Vrbo and Airbnb.
“Airbnb is built on trust, and there is no room in our community for bad actors. We supported the U.S. Attorney’s Office and the FBI in their thorough investigation to hold those responsible accountable, and we are grateful for their work. We have taken several steps to strengthen our security to help make rare issues like this even rarer,” an Airbnb spokesperson said.
Vrbo did not immediately respond to a request for comment.
According to prosecutors, the business created by Goyal and Raheja operated under various names, including Abbott Pacific LLC and Jet Set Work LLC. Properties included listings in Southern California and cities including Chicago, Dallas, Denver and Nashville.
According to the U.S. Attorney’s Office for the Central District of California, Goyal pleaded guilty to wire fraud and Rahage pleaded guilty to obstruction of justice.
According to prosecutors, from October 2017 to November 2019, the defendants used fake host names and the identities of other people to list properties. In some cases they listed properties using false or nonexistent addresses and posted fabricated reviews to make the listings appear more legitimate.
According to the indictment, the defendants allegedly used a mix of properties that they owned and others that they leased and listed on platforms such as Airbnb and Vrbo.
According to prosecutors, the operation focused on “double-booking, bait-and-switch” tactics.
According to the plea agreements, by listing the same property multiple times with different prices on multiple platforms, they were able to choose the most profitable reservations while canceling others. Guests whose reservations were canceled were given false explanations, such as plumbing or maintenance problems, or were redirected to alternative rental locations.
After guest complaints and cancellations prompted a rental platform to ban them, the defendants used fake accounts to maintain their operations, according to their plea agreements. They also took measures to mitigate negative feedback, such as reposting property listings under the new identity.
According to the plea agreement, Raheja admitted to making false statements to federal agents in 2023, including denying that the overbooking practices were intentional.
In the indictment, prosecutors alleged that the scheme was massive, involving more than 10,000 reservations and generating more than $8.5 million in revenue.
The indictment also alleged that the defendants engaged in discriminatory practices based on racial bias when deciding which reservations to honor and cancel. Specifically, the indictment alleged that guests deemed black were disproportionately targeted for cancellations.
Both defendants pleaded not guilty to the aggravated battery or discrimination charges leveled in the indictment.
According to the plea agreements, Goyal faces a maximum sentence of 20 years in federal prison, while Raheja faces up to 10 years.
US District Judge Welsey L. Su will sentence Goyal on August 14 and Raheja on September 11.
