Airbnb: a fraud detected at more than $ 20 million in NYC

Who I am
Carlos Laforet Coll
Author and references

More than 100 sublet apartments

For years, New York City Hall (and other major cities around the world) has waged a fight: it fight against illegal tourist rentals, mainly on the Airbnb site. New York City Hall announced recently that it has filed a complaint against Metropolitan Property Group (MPG), a company specializing in tourist rentals, deemed illegal by the city hall.

Metropolitan Property Group acted in the following way: it filed rental files with apartment owners without explaining that it was going to transforming properties into tourist sublets. Once the property was "in the hands", the company rented it out on Airbnb at a higher rent. A landlord in East Harlem filed a complaint against MPG after realizing that the apartment he was renting $ 3 per month was sublet to $ 225 per night. The monthly rent was thus covered within two weeks.

According to the New York Times, the fraud is significant: between 2015 and 2018, the company would have won over $ 20 million with its tourist sublets. Over 130 apartments have been rented in Manhattan. These, spread over 35 buildings, have been let to more than 76 people.

A system that circumvents New York laws

A complete building located in the East Harlem neighborhood was transformed into a clandestine hotel by fraudsters. They have also set up a system to deflect the laws of New York and the regulation of the Airbnb site, which did not detect the fraud.

To bypass the checks, MPG has created false identities and email addresses to open multiple Airbnb accounts. The company also gave incomplete or slightly false addresses.

In New York, renting an entire apartment for less than 30 days is prohibited, unless the owner is present at the same time as the tenant. Therefore, the New York City Hall has decided to file a complaint against the company MPG and claims it, as well as the five people accused, more than 20 million dollars.

The organizer of this system is Max Beckman, a former real estate agent. As he explained to the New York Times, he does not believe he has done anything illegal. It was the first rental of a bedroom in 2012 that made it want to expand its “real estate offer”. In 2015, he even gave up his position to devote himself fully to his rental business on Airbnb.

Better transparency requested from Airbnb

Faced with this fraud, the New York authorities put pressure on rental sites between individuals. Better transparency from Airbnb is also called for, as reported by New York Mayor Bill de Blasio.

If you are looking for accommodation solutions in New York, take a look at our dedicated articles:

  • New York apartment rentals.
  • Top 8 lofts in New York.
  • Where to sleep in New York according to your budget (cheap accommodation, luxury New York hotels, palaces…).
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