The pair were charged in an alleged Airbnb and Vrbo property rental scam that netted $8.5 million

Two men accused of raising more than $8.5 million in a scam on vacation rental sites Airbnb and Vrbo have been indicted on fraud charges, federal prosecutors announced Thursday.

Sharai Goel, 35, of Miami, and Shonik Raheja, 34, of Denver, are accused of perpetrating a “bait-and-switch double-booking scam” linked to more than 10,000 real estate bookings in 10 states, according to the British newspaper “Daily Mail”. statement From the US Attorney's Office for the Central District of California.

Goel and Raheja were charged in a superseding indictment Wednesday with conspiracy to commit wire fraud and 13 counts of wire fraud. Joel is also charged with two counts of identity theft, prosecutors said.

Prosecutors said Goel, Raheja and their employees were managing about 100 properties across the country by 2019. Prosecutors said they collected about $7 million in payments through about 10,000 bookings on Airbnb, and about $1.5 million from bookings through Vrbo.

Prosecutors said the company used multiple names, including Abbot Pacific LLC.

Prosecutors said the defendants double-booked the properties through multiple listings for the same property.

They then “made up bogus last-minute excuses — often claiming plumbing problems — to cancel the overbooked guests or trick them into moving to lower-quality alternative accommodations,” the U.S. Attorney's Office statement said.

“Members of the conspiracy took advantage of the scheme by running a secret bidding war for 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, and then canceled or moved low-paying guests to the property,” she said. A different property in the area.”

Prosecutors said the defendants would decide who to rent to based on racial bias and discrimination, while avoiding “renting to guests who they believed were black.”

Prosecutors said Joel was arrested on December 27 in Florida. Raheja has not been arrested, according to a spokesman for the Public Prosecution Office in the Central District of California.

Prosecutors said the defendants are expected to be arraigned in federal court in Los Angeles in the coming weeks.

US Attorney for the Central District of California Martin Estrada said the defendants were “fueled by greed.”

“This deplorable scheme has claimed the lives of thousands of consumers and families across the country, some of whom were allegedly discriminated against due to racial bias,” Estrada said in the statement, adding that their alleged actions left people “scrambling to find last-minute alternative accommodations.” “

Attorney Michael Friedman, who represents Joel, said in a statement Thursday that his client “fully denies these accusations and looks forward to defending against them in court.”

A lawyer representing Raheja could not be reached for comment.

An Airbnb spokesperson said in a statement that the company is “built on trust, and there is no place for bad actors in our community.”

“We have taken multiple steps to strengthen our defenses against deceptive behavior, including measures such as identity and list verification which we believe will help deter already rare instances of this type of activity,” the spokesperson said.

Vrbo could not immediately be reached for comment Thursday.

In addition to potential renters, prosecutors said Airbnb and Vrbo also fell victim to fraud and scams.

Prosecutors said Goel and Raheja used fake host names and other people's identities to list properties.

They also used fake host accounts to hide their own identities, double-book properties, and post fake positive reviews. The couple was banned from Vrbo in 2015 “due to frequent host cancellations and guest complaints,” prosecutors said.

The conspiracy and wire fraud charges carry a maximum penalty of 20 years in federal prison, prosecutors said.