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

Shray Goel, 35, of Miami, and Shaunik Raheja, 34, of Denver, are accused of a “double-booking, bait-and-switch scam” connected to more than 10,000 reservations for properties across 10 states, according to a statement from the U.S. 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. Goel is also charged with two counts of aggravated identity theft, prosecutors said.

Goel, Raheja and their employees, were managing about 100 properties throughout the country by 2019, prosecutors said. They collected about $7 million in payouts via about 10,000 reservations on Airbnb, and about $1.5 million in reservations through Vrbo, prosecutors said.

The business used multiple names, including Abbot Pacific LLC, prosecutors said.

The defendants would double-book properties through numerous listings of the same property, prosecutors said.

They then “invented bogus last-minute excuses — often claiming plumbing problems — to cancel overbooked guests or trick them into moving to inferior replacement accommodations,” the U.S. Attorney’s Office statement said.

“Members of the conspiracy profited from the scheme 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, and then cancelled or switched the lower-paying guests to a different property in the area,” it said.

The defendants would decide who to rent to based in part on racial prejudice and discrimination, avoiding “renting to guests they perceived to be Black,” prosecutors said.

Goel was arrested Dec. 27 in Florida, prosecutors said. Raheja has not been arrested, according to a spokesperson for prosecutors in the Central District of California.

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

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

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

Attorney Michael Freedman, who is representing Goel, said in a statement Thursday his client “fully denies these allegations and looks forward to defending against them in court.”

An attorney representing Raheja could not be reached for comment.

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

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

Vrbo could not immediately reached for comment Thursday.

In addition to potential renters, prosecutors said Airbnb and Vrbo were also victimized and defrauded.

Goel and Raheja used fake host names and other people’s identities to list properties, prosecutors said.

They also used fake host accounts to hide their own identities, to double-book properties, and to post fake positive reviews. The pair were banned from Vrbo in 2015 “because of repeated host cancellations and guest complaints,” prosecutors said.

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

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